The widely-read, stock-focused newspaper likes Apple (NASDAQ:
an article published Saturday
, Barron's says "no matter how you look at it, Apple's shares are
A Barron's endorsement frequently leads to a strong move in
shares. Most recently, shares of Tronox (NYSE:
saw a powerful rally post-Barron's mention
, popping over nine percent in a single session.
However, unlike Tronox, Apple is a mega-cap company with a
widespread following. Still, shares saw a slight pop, trading up
over two percent early Monday, outperforming the S&P 500 which
was essentially flat on the session.
Barron's likens Apple's recent performance to 2008, when shares
dropped roughly 40 percent before rebounding. Then CEO, Steve Jobs
remarked that he had "never been able to figure out Wall
The publication lays the blame for Apple's recent 20 percent
drop on tax-related selling. Despite the decline, Apple's shares
are still up almost 30 percent year-to-date.
Many investors might have been sitting on massive paper profits.
With taxes on investments likely to increase in 2013, it may have
been prudent for investors to sell some of their position so as to
lock-in the current, lower tax rate.
Barron's also suggests that some of the "fast money" has bailed
on the stock, helping to accelerate the decline. But this money
could return, when the company reports continued record
The argument of tax-based selling and Wall Street overreaction
seems attractive given that most of the selling seen in Apple came
in the fourth quarter.
However, some the declines may have been fundamentally
justified. The iPhone -- Apple's bread and butter profit machine --
has shown weakness in 2012, both on a sales and fundamental
Several sell-side research firms have made comments in recent
weeks suggesting that
demand for the iPhone 5 may be worse than
) aggressive price drop of the device ahead of the Christmas
holiday might support this notion.
Then, there's the device itself. Despite the iPhone's larger
screen and boosted internals, competitors running Google's (NASDAQ:
) Android OS might have simply produced better phones: Samsung's
Galaxy S3, HTC's Droid DNA and Google's own LG-produced Nexus 4 all
offer compelling features that the iPhone 5 simply doesn't
What's more, Apple's made a few notable fumbles with its mobile
operating system, most notably its widely panned decision to
abandon Google Maps in favor of its own shoddy alternative.
Lastly, there might be some forward projections baked into
Apple's recent decline. The company's decision to get into the
small tablet game eating away at margins, or speculation about the
potential failure of an Apple TV.
Shares of Apple traded near $522 on Monday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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