Posted on January 24th, 2013 at 3:02 by John Sinteur in category: Apple, ¿ʞɔnɟ ǝɥʇ ʇɐɥʍ -- Write a comment
Stock prices are not about past earnings, but about expected future earnings, so this reaction is not as illogical as it may seem on a first glimpse. When a stock drops after record earnings, this is a very bad sign that people with insider knowledge are maybe dumping now their stocks to people who got greedy by seeing the glorious days of the past, and ignore that very rough times may lay ahead for Apple.
It is the eternal cycle of the stock market: “Smart money” playing their game with the “Dumb money”
Record *revenue* but same profit as the year earlier quarter.
Interesting one analyst said it was lagging iMac sales that had the biggest negative impact.
Analyst price targets still $600, $650, $750, $875, $1100…
@Desiato: All good points. Still, I can’t quite fathom the P/E for Amazon being 290 times greater than that for Apple.
@SjG: I don’t really get it either. Although Amazon’s profit is artificially low since they’re plowing all their cash back into developing their business. The stock reflects expected earnings growth, which for Amazon is still thought to be potentially quite large, and for Apple people are worrying that they’re running into the laws of physics. So I guess I get some part of it. But Apple at P/E around 10, yeah, crazy.
I think THIS is why their stock price took a hit in spite of record revenues and profits. Exactly the kind of thing Wall Street does not approve of.
John, do you have anything to substantiate the claim that Wall Street cares about that? Sounds highly, highly dubious to me. To put it politely. 🙂
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