This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Apple Is a Gift You Won't Want To Re-Gift

Stocks in this article: AAPL

NEW YORK ( TheStreet) -- As painful for many as Apple's (AAPL) decline from $700 was, it's fascinating to note that not only was iStock up for 2012, it increased in value four out of the last four years.

Apple turned decidedly bearish on the daily chart, but did you know that Apple on the weekly and monthly charts is still in a bullish trend? On the weekly chart, the 60- and 90-period moving averages are above a rising 200-period moving average.


If you consider the monthly chart, the pattern appears even more bullish. Not only are the faster- moving averages climbing and above the 200-period moving average, but the shares have remained above the moving averages since 2009.

The weekly and especially the monthly charts should be given more weight than a daily chart. Unless you're actively buying and selling shares (or maybe hedging with options), you may not even need to look at a daily chart.

For true long-term investors, the daily chart offers increased noise and distractions that may take your eye off the real prize. If you can, pull up a monthly chart and look at it while I highlight some key figures. I think you will find any doubt generated as a result of supposed price weakness while the company produces record amounts of profits quickly disappears.

AAPL Gross Profit Quarterly Chart AAPL Gross Profit Quarterly data by YCharts

On the monthly chart, Apple closed above $200 for the first time near the end of 2009. This is the same time that the gross profit chart also reaches its highest level. Two years later, Apple's stock has doubled to close over $400, but the gross profit isn't keeping up. The gross profit is "only" about $20 billion with per-share earnings near $14.

What this tells us is that slower growth was already priced in at the end of 2011. At the end of 2012, all earnings growth was removed from the price, and it's clear that investors started pricing in declining growth. Once the stock fell under $600 we started reading "value investment and Tim Cook is no Steve Jobs."

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs