NEW YORK ( TheStreet) -- When I want a good laugh I watch the cult movie "The Gods Must Be Crazy." When I look at the price action on Apple (AAPL - Get Report) recently I think "The Market Must Be Crazy."
What the heck is happening here? I can't see any reason to sell this stock and I see every reason to have it on your watchlists and be prepared to hit the buy button at any moment.
If you have any investing rule to live by it should be to find companies that have double digit projections for growth in sales and earnings and buy them when their P/E is lower than the markets.
Look at what has been happening to the price of Apple when compared to the price of the Value Line Index (my market proxy) over the past 2 1/2 months. While the Value Like Index has been flat, Apple fell 20%:
Let's look at all the reasons why Apple is a bargain.
Apple, together with subsidiaries, designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players; and sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Its products and services include iPhone, iPad, Mac, iPod, Apple TV, the iOS and Mac OS X operating systems, iCloud, and various accessory and support offerings, as well as a range of consumer and professional software applications.
The company sells its products and services to consumers, small and mid-sized business, education, enterprise, and government customers through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In addition, it offers various third-party iPhone, iPad, Mac, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals, through its online and retail stores; and digital content and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. Apple was founded in 1976 and is headquartered in Cupertino, California. (Yahoo Finance profile)
Factors to Consider
(Technical factors provided by Barchart): When there are technical sell signals in stocks that are fundamentally sound, that can be a good time to put them on your watchlist and be prepared to buy them at a discount. There is an 88% Barchart technical sell signal and a Trend Spotter sell signal. The stock is trading below its 20-, 50- and 100-day moving averages. The price is at a 22.78% discount to its one year high and the Relative Strength Index is a very low 27.33%. The price was recently $544.65 which is below its 50-day moving average of $645.25.