Weekly Stock Pick & Favorite Reads

The stock to watch in the 47th week of the year is Apple (AAPL). You could say that Apple has been the hot stock for the last couple of years, but the recent decline in Apple’s stock price has me keeping my eye on it this week.

Since hitting an intraday high of $705.07 on September 21, Apple has lost roughly 25% of its market value in just under two months. Still the most valuable company in the world, the market value has fallen from above $700 billion to $496 billion.

Apple Stock Chart

There have been some setbacks concerning the supply of the iPhone 5 and the iPads, but nothing to cause the stock to lose so much of its value. Samsung also released the Galaxy S3, which has been widely praised by the tech community and consumers; however, Apple fans are as loyal as ever. The company is still making a ridiculous amount of money and the P/E ratio sits at an incredibly valuable 11.85.

On Friday, the stock hit a low of $505.75 then closed near $530. The $530 price also happens to be a support point. Has Apple the bottom? We’ll see how it performs this week and that’s why it’s my stock to watch in week 47.

Recommended Reads

Once you’re done analyzing Apple’s technicals and fundamentals, be sure to check out my favorite reads of the week:

Other Mentions and Links

Thank you John @ Fearless Men for mentioning The Fiscal Cliff Infographic in the The Fearless Men’s Weekly Round-Up.

DISCLAIMER:  Each week I will feature one publicly traded stock that I feel people should keep an eye on. I’m not suggesting that people should purchase this stock for their investment portfolios – I’m simply saying that for whatever reason the stock has caught my attention. I will give you the basics and you must determine whether or not the investment is suitable for your objectives.

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Comments

  1. Hey JW, thanks so much for the mention.

    Apple is always a hard stock to pinpoint because of the insane loyalty of their consumers.

    • That’s very true Khaleef. They loyalty is almost dangerous from an investor’s perspective. Usually, once a company becomes dominating and successful, people start to turn, opting for the “underdog”.

      In the case of Apple though, this has not occurred at all. Does that mean that people will start making other choices at some point?

  2. you called it! AAPL up over 7% today. So much for it sliding under $500… well until tomorrow at least.

  3. I felt strongly that Apple was oversold; although, I didn’t see it moving so much in day. It traded 7 million shares over it’s average – that’s what tons of buying power will do.

    Like you said FI Fighter, we’ll see what tomorrow brings.

  4. i think some folks may be worried that the ipad mini may not sell as well as expected.. its price point/feature set may have been setup at a point where apple may have its first disappointment in a really long time..

    of course.. i could easily be completely wrong.

  5. I’ve said the same thing about Apple many times, but people keep waiting in line for hours to buy whatever they come out with. Combine that incredible demand with one of the best margins in the industry and you have the recipe for a solid investment.

  6. Looks like that was a great call!

  7. Great call on the Apple….I actually purchased it around $541….now it’s about $589 I think…the question becomes “how long do I hold it?”
    Do I think it will shoot back up to $700? Probably not anytime soon. But I also think the drop understandable but uncalled for.
    I think too many people sold their shares to lock in lower taxes on their capital gains (which caused the falling price) rather than any significant changes in the company.
    Long-term, I’m interested to see how innovative they are…I’m not sure how excited consumers will be for iPhone 28

  8. It is easy to agree with the idea that Apple is easily avoided due to the trendiness of its products and the insane loyalty of customers. An investor attempting to avoid emotional investment might try to steer clear in this situation but looking at the fundamentals this is still an incredibly attractive stock. Debt is attractive and the P/E ratio suggest it is very cheap!

    A lot of the selling going on right now is a result of people cashing in on a stock they made a lot of money on. Take the money and run is the idea going into 2013. I still think it has some room to go down off of volume selling and a lot of savvy buyers will be getting in on the downtrend.

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