Headline Feeds
Like a lot of other tech companies, Apple (Nasdaq: AAPL) has seen its stock fall a long way over the past 12 months. In early 2008, the company's stock price was flirting around the US$200-per-share mark before taking a big hit in February and climbing back up to the $190s or so in May. Now, Apple is trading around $90, and, it's still yo-yoing up and down.
The latest hit came courtesy of an NPD Group tech industry retail sales report that found that U.S. retail Mac sales dropped 6 percent in January 2009 compared to sales in January 2008. Windows PCs, however, went up 13 percent in unit sales, but revenue was stagnant as consumers snagged cheaper PCs than in years past.
Either way, the report was widely covered by the online press, and it seems to have triggered somewhat of a selloff of Apple stock -- at least, a 4 percent or so decline. Dell (Nasdaq: DELL) and HP (NYSE: HPQ), it should be noted, saw similar (and slightly larger) percentage declines in stock price, which raises some questions. Is Apple in this case being bought and sold on tiny nuggets of information, or is the company's stock activity being pushed around by larger market forces? After all, aren't we in the middle of a very stormy recession?
Reacting to the News - or Overreacting?
Following the NPD news, Needham & Co. analyst Charlie Wolf reportedly told his clients in a research note that Apple remained a strong buy, despite the single month of sales data -- which didn't factor in international sales, which will account for 45 percent of worldwide sales for the March quarter.
Basically, his words of wisdom were widely reported as a cautionary statement about overreacting to a tiny bit of news.
Of course, Apple's desktop line is in sore need of updates -- the all-in-one iMac, Mac Pro and Mac mini are all about due or past due for new, more competitive processors, if not a few other design tweaks. The older desktop lineup could account for some discrepancies in Mac demand, but sales of MacBooks still far outpace desktop units.
So really, what's going on these days?
The Perfect Storm?
It's hard right now to separate what's going on in the economy and in the stock markets -- that crash we're still in the middle of -- and the price performance of an individual stock, Frank Cioffi, editor and publisher of Apple Investor News, told MacNewsWorld. "It's really hard to separate the two."
Right now, Cioffi said, the stock market as a whole is broken, and all stocks are down significantly, not just the financial segment.
"What happened last fall -- hedge funds and mutual funds had to raise cash because the financials were crashing. So to raise money, what do you do when the value of some of your stocks is crashing? You sell the good stocks to raise cash -- and that's what happened to Apple last fall, and it's still in the wake of that. ... My assessment is that part of what's going on is the market, and it's dragging Apple down," Cioffi explained.
"I think Charlie Wolf was probably right -- there was an overreaction to the NPD Group report. If Mac sales are only down 6 percent from January of this year compared to January of last year, that's pretty damn good. Think about it: If you were a company, would you like to have retained 94 percent of your sales year-over-year over this last year?" he said.
"I find this situation a lot with Apple -- a bit of news comes out that's a little negative, and the stock takes a hit. But when you think about it for a day or two, you realize, wait a minute -- 6 percent down in sales? That's pretty good," Cioffi said.
"But Apple is always going to get whiplashed -- Apple was a volatile stock even before the market downturn," he added.
