Has the "curse of the Dow" finally caught up with Apple?
Shares of the iPhone maker have been in a rut since posting disappointing quarterly results in late June, falling to a six-month low of $113.25 on Tuesday.
The recent declines have wiped out nearly $100 billion of Apple's market value - about as much as fellow Dow components Boeing and McDonald's are worth in total. For CEO Tim Cook, it means his stake of more than 111 million shares is now worth about $12.76 billion, compared with nearly $15 billion at the peak in late April.
The dropoff represents a notable bout of weakness for a stock basically impervious to pain for the better part of two years.
Strategists pinned the sell-off on the steady run in the shares, as the stock has gained more than 137 percent since hitting a low in April of 2013. In addition, more than 5,700 different funds already own the shares, according to Morningstar data. With Tuesday's declines, the shares have dropped 13 percent over the last 11 trading days.
"When you get a stock that is over-owned it’s difficult to find that incremental buyer," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "It’s having its own momentum meltdown."
The declines have left the company's shares below their 200-day moving average, a measure of the long-term trend in the stock. Shares closed at $114.64 on Tuesday.
The last time it closed below the 200-day moving average, in November 2012, the stock was in the midst of a swoon that lasted several more months, finally bottoming out in June 2013.
This week's drop below the moving average exacerbated selling sentiment.
"For a lot of technical traders that was a sell sign," said Channing Smith, managing director at Capital Advisors Inc in Tulsa, Oklahoma. A Capital Advisors growth fund owns shares of Apple but reduced its holdings last year.
"The Apple ecosystem has never been stronger but we are in a very mature cycle. We think Apple will be a good stock, not a great stock going forward," Channing said.
Apple options were busy on Tuesday with about 2.13 million contracts traded, its third-most active day this year, as investors anticipate more volatility in the stock.
Analysts at Bespoke Investment Group of Harrison, New York, note that generally, when Apple slips below its 200-day moving average, it tends to weaken a bit further, at least for a week, though returns down the road are generally stronger.
Until recently, the company, which was added to the Dow Jones industrial average <.DJI> in mid-March, had escaped the index's so-called curse, which causes companies' shares to rally in the months leading up to their addition, but underperform in the months that follow.
The disappointing fourth-quarter revenue forecast and iPhone sales that missed some targets, have hit its shares hard and it is now down 10 percent since the shares were added to the Dow.
The pummelling the stock has taken reflects investors' heightened expectations heading into earnings reports. It also points to the realization that the much-hyped Apple watch may not be as big a catalyst for the stock as some hope, though fretting over the newest Apple product is also common among investors.
Investors and analysts will be hard-pressed to put their finger on factors that could move the needle at the massive company, Douglas Kass, president of hedge fund Seabreeze Partners Management Inc, said in a note.
"At the very least, sales and profit comparisons will likely grow increasingly difficult for Apple, both absolutely and relative to analysts' expectations," said Kass, who had briefly shorted the stock as it fell, and covered that position, in addition to selling bearish put options he was holding, as the shares fell.
Reuters
Wed Aug 05 2015
Apple options were busy on Tuesday with about 2.13 million contracts traded, its third-most active day this year, as investors anticipate more volatility in the stock.
MAIWP peruntuk RM30.6 juta untuk skim BKB di Labuan
MAIWP Labuan telah memperuntukkan RM30.6 juta untuk Skim Bantuan Kewangan Bulanan (BKB) yang memberi manfaat kepada 5,406 ketua keluarga.
Fokus Minggu Depan: PRK KKB, sentimen semasa pengundi…
Ikuti kupasan Pengurus Kanan Penyelidikan Institut Darul Ehsan (IDE), Khairul Arifin, dan wartawan Astro AWANI, Firdaus Azil mengenai tinjauan semasa Pilihan Raya Kecil (PRK) Kuala Kubu Baharu.
Banjir pulih, PPS Kota Tinggi ditutup
Pusat Pemindahan Sementara (PPS) Sekolah Kebangsaan Bukit Lintang yang dibuka untuk kemudahan mangsa banjir di persekitarannya semalam telah ditutup pada pukul 2.30 petang tadi.
Faisal Halim cedera disimbah cecair dipercayai asid
Terdapat kecederaan dilihat di bahagian muka, kepala dan bahagian belakang pemain tersebut.
Polis tahan dua lelaki, sita kenderaan papar gambar Agong pada kempen PRK KKB
Kedua-dua lelaki itu ditahan di sekitar Ulu Yam Lama, selepas polis menerima laporan mengenainya pada pukul 6.18 petang semalam.
Syarikat pengeluar minyak wangi, Yaya Empire bertaraf global
Syarikat pengeluar perfume, Yaya Empire antara salah sebuah syarikat tempatan yang berjaya menempa nama dalam industri haruman bertaraf global selepas meneroka pasaran luar Malaysia.
PN belum tentukan lagi jumlah kerusi akan ditandingi pada PRN Sabah nanti
Muhyiddin berkata PN dan Bersatu akan sertai PRN Sabah ke-17, namun soal bilangan kerusi bakal ditandingi belum lagi dibuat.
Subsidi bersasar: Jangan buat spekulasi, tunggu pengumuman rasmi kerajaan
Fuziah berkata, setakat ini tiada pengumuman dibuat, sekali gus menyangkal laporan media luar kononnya kerajaan telah membuat keputusan.
Piala Thomas: Rexy mahu perseorangan negara lebih mantap di Horsens
Dalam tempoh dua tahun lagi, skuad lelaki akan lebih seimbang memandangkan kem beregu negara lebih stabil berbanding perseorangan negara.
Polis serah siasatan pesawat terhempas di Sungkai kepada CAAM
Setakat ini pihak Biro Siasatan Kemalangan Udara (BSKU) di bawah Kementerian Pengangkutan masih melakukan siasatan di lokasi kejadian.
Google bayar Apple hingga AS$20 bilion pada 2022, kekal enjin carian utama Safari
Google sedia bekerjasama dengan Apple untuk menjadi enjin carian utama dan pembayaran dilihat meningkat dari tahun ke tahun.
Apple dijangka tambah ciri AI pada Safari melalui iOS 18
Ciri kecerdasan buatan pada Safari kelak akan memudahkan beberapa proses pelayaran.
Apple Pencil baharu hadir dengan sistem haptik
Apabila digunakan pada skrin iPad, pengguna boleh merasakan tindak balas haptik seakan menggunakan pensel sebenar.
iPad Pro mungkin dijana dengan cip Apple M4 terbaharu, fokus ciri AI
Cip Apple M4 dijangka memfokuskan kepada keupayaan enjin neural yang disertakan bersama dengannya membolehkan ia menawarkan ciri AI yang lebih baik.
Apple perkenal HomePod, HomePod Mini di Malaysia, harga bermula RM529
Kedua-duanya akan mula dijual 10 Mei 2024 untuk pasaran tempatan.
Apple dalam perbincangan guna teknologi OpenAI dalam iOS 18 - Laporan
iOS 18 akan membawakan perubahan paling besar untuk sistem operasi iPhone tahun ini dan integrasi sistem AI akan akhirnya didedahkan.
'Made in Malaysia' - Apple punyai 19 kilang pembekal di negara ini
Malaysia merupakan salah satu negara yang mempunyai beberapa kilang pembekal yang menawarkan komponen kepada Apple.
Syarikat induk Google kini kembali bernilai lebih AS$2 trilion
ALPHABET, syarikat induk disebalik Google kini sekali lagi berjaya mencapai nilai pasaran semasa melangkaui AS$2 trilion.
TSMC akan hasilkan cip 1.6nm menjelang 2026
Menurut TSMC, teknologi 1.6mm akan memberikan peningkatan prestasi sehingga 8-10% untuk voltan yang sama serta pengurangan penggunaan kuasa antara 15-20% pada kelajuan yang sama.
Apple dilapor kurangkan pengeluaran Vision Pro susulan permintaan rendah
Walaupun jualan pada awalnya amat memberangsangkan, momentum tidak berterusan kerana unit awal hanya dibeli oleh peminat paling tegar Apple.