Apple stock closes first negative year since 2008, but Wall Street upbeat

Posted:
in AAPL Investors edited December 2015
Despite record-breaking quarterly earnings and continued market growth in the face of withering industry headwinds, Apple stock closed out 2015 down for first time since 2008, though analysts remain positive on the company's near-future prospects.


Source: Apple


Apple shares stood at $105.26 at the end of Thursday, the last trading day of 2015, down 4.64 percent from the start of the year and 21.76 percent from an all-time intra-day high of $134.54 reached in April. The stock was negative 2.06 percent for the day.

As noted by Reuters, this will be the first negative year for Apple since 2008, when shares finished down 52 percent. Much has changed over the intervening years, however, including a stock split, substantial dividends payouts and huge open stock buybacks. Most recently, Apple's performance earned it a place on the Dow Jones industrial average, replacing AT&T in March.

As for 2015, declines removed about $57 billion from Apple's market capitalization, leaving the company valued below $600 billion. In context, Apple's value dropped by approximately 20 percent since its April high, and 17.5 percent since being added to the Dow.

Still, Wall Street analysts have faith in the world's largest company. According to Reuters, a check with 49 brokerages showed 41 hold a positive rating for Apple stock, while none have issued a "sell" rating.

Analysts from high-profile firms -- RBC Capital Markets, J.P. Morgan and Morgan Stanley -- recently glommed onto vague supply chain reports claiming lower than usual iPhone demand, eliciting a prompt slashing of quarterly shipment projections for the company's biggest money maker. FBR & Co. analyst Daniel Ives, who was the latest to model down, spoke with CNBC earlier this week about chinks in Apple's armor.

"I think the blooms are coming off the rose a bit for Apple. Not just in terms of the multiple, or in terms of what investors want to pay, but in terms of products," Ives said. "It's a make-or-break, white-knuckle period for Apple."

Specifically, the concern is that iPhone 6s won't be able to replicate the blockbuster success enjoyed by last year's iPhone 6 and 6 Plus, which addressed pent-up demand owing in no small part to consumers waiting for Apple's answer to Android phablets. Investors have come to expect persistent year-over-year growth for iPhone, especially as Apple pushes deeper into a burgeoning Chinese market, but it remains to be seen whether or not this year's "s" update was enough to drive yet another record-breaking quarter.

In a somewhat ironic turn, Piper Jaffray analyst Gene Munster surfaced as the voice of reason when he cautioned investors against taking action based on supply chain heresay. Munster's advisory echoes comments made by Apple CEO Tim Cook, who on numerous occasions said it is extremely difficult to extrapolate meaning form supply chain data, even if the information is correct.

"The supply chain is very complex, and we obviously have multiple sources for things," Cook said in a 2013 earnings call. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."

Apple introduced a number of new products this year, but more importantly entered new product categories. Apple Watch served as the company's first foray into wearables, while Apple Music leveraged Apple's considerable influence in digital music to competitor music streaming services. The fourth-generation Apple TV with its tvOS and dedicated App Store also stood out as evidence that Apple is making a serious play for the living room. Together, these new devices and platforms have the potential to pump significant capital into current revenue streams.

Looking ahead, Apple is expected to update iPhone, iPad, Mac and Apple Watch product lines in 2016.
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Comments

  • Reply 1 of 115
    Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

    Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.
    stevenozpalominepotatoleeksoupcornchip
  • Reply 2 of 115
    fallenjtfallenjt Posts: 3,982member
    sog35 said:
    Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

    Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.
    Agree 100%

    Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

    2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth.  Apple has so many current and future revenue streams to easily double revenue from this point.  But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

    Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

    Something is wrong with Apple's investor relations. I can't even speak to a live person.  I call the number and all you can do is leave a message.  I left 3 messages and no one called back. I mean what the fuck.  I have tens of thousands invested and they can't even return a fucking phone call?

    Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF.  You never hear this kind of shit directed at Google/Amazon/Microsoft CEO.  Only Cook. Whatever he is doing, he is doing it wrong.
    Stock value is on the paper. Did Apple actually lost billions of $? No!. It's like my home equity, which was up and down over the years but made no difference for me as an owner. Bottom line, Apple still make tons of profit, quarter after quarter, and that matters!
    netmagepropodicoco3nolamacguydamn_its_hotthepixeldoc
  • Reply 3 of 115
    dmdevdmdev Posts: 31member
    sog35 said:
    Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

    Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.
    Agree 100%

    Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

    2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth.  Apple has so many current and future revenue streams to easily double revenue from this point.  But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

    Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

    Something is wrong with Apple's investor relations. I can't even speak to a live person.  I call the number and all you can do is leave a message.  I left 3 messages and no one called back. I mean what the fuck.  I have tens of thousands invested and they can't even return a fucking phone call?

    Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF.  You never hear this kind of shit directed at Google/Amazon/Microsoft CEO.  Only Cook. Whatever he is doing, he is doing it wrong.
    Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
    icoco3potatoleeksoupcornchip
  • Reply 4 of 115
    Wall Street is upbeat?  Analyst are slashing iPhone estimates for 2016.  They have also written off every other product sold by Apple.  It is obvious that regardless of growth and profits this stock will continue to under perform.  I am still wondering why Apple was not destroyed by Samsung as predicted a couple years ago......
    radarthekatapplepieguycornchip
  • Reply 5 of 115
    Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

    Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.
    With due respect, I happen to be pleased that Apple is not over-reacting to Wall Street.  I agree that Wall Street’s valuation is probably “incorrect”, but I disagree with the notion that Tim Cook is making mistakes.  He’s steadily raising the dividend and perhaps, gradually, increasing the PR effort with more exposure to the press.  We should think of the Market as a drunk, hysterical teenager and Tim Cook as the sober adult.  

    And yes, one of the most important things he’s doing is buying the stock.  He thinks it’s a good deal at the current price and he’s putting money where his mouth is.  I’m doing the same thing.  You’re free to do the same.  We investors can be impatient and greedy.  The Market is worried that Apple will stumble and I’m only 95% convinced they’re wrong.  There’s a risk in keeping your money in AAPL and many people, voting with their wallets, are more afraid than I am.  

    If you really believe the stock is undervalued, buy more.  If you don’t have enough money to buy, that’s unfortunate but that’s how we get to vote in this game.  Wall Street’s having an amazing sale on AAPL right now!  Get out your wallet and express your confidence!
    Solijustadcomicstrustnoone00netmagepropodradarthekatlatifbpflaneurpotatoleeksoupbrucemc
  • Reply 6 of 115
    AAPL is a fine dividend stock, but those high growth days are OVER. Amazon is the clear winner.
  • Reply 7 of 115
    AAPL is a fine dividend stock, but those high growth days are OVER. Amazon is the clear winner.
    When you say “is", is that past tense or future tense?  Sure, Wall Street rewarded AMZN in 2015, that’s history.  But do you have a crystal ball and you therefore know that 2016 will look the same?  If so, you should invest in AMZN with their P/E of 968.  As for me, I’m betting on AAPL.  I’m comfortable risking my hard-earned money on a company with a P/E under 12.
    fruitstandninjaSoliradarthekat
  • Reply 8 of 115
    dmdev said:
    sog35 said:
    Agree 100%

    Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

    2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth.  Apple has so many current and future revenue streams to easily double revenue from this point.  But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

    Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

    Something is wrong with Apple's investor relations. I can't even speak to a live person.  I call the number and all you can do is leave a message.  I left 3 messages and no one called back. I mean what the fuck.  I have tens of thousands invested and they can't even return a fucking phone call?

    Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF.  You never hear this kind of shit directed at Google/Amazon/Microsoft CEO.  Only Cook. Whatever he is doing, he is doing it wrong.
    Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
    It works out well for long term investors, also. While the stock price goes down the dividend stays the same. The lover the stock goes the more share I get since I have my dividends set to reinvest. The scared investors can tank the stock price for all I care. It will rebound and grow. 
  • Reply 9 of 115
    bobschlobbobschlob Posts: 1,074member
    Are we not allowed to post links?
    I posted a comment with a link; and then a pop-up said that the message would be posted after it had been approved.
    (That's fine, but not sure what happens now)
  • Reply 10 of 115
    dmdev said:
    Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
    That's like saying falling down and breaking your leg worked out pretty favorably for you because you got a discount on the surgery. 
    palominehmm
  • Reply 11 of 115
    AAPL is a fine dividend stock, but those high growth days are OVER. Amazon is the clear winner.
    You might look at some actual data before spouting nonsense. 
    edited December 2015 applepieguy
  • Reply 12 of 115
    With due respect, I happen to be pleased that Apple is not over-reacting to Wall Street.  I agree that Wall Street’s valuation is probably “incorrect”, but I disagree with the notion that Tim Cook is making mistakes.  He’s steadily raising the dividend and perhaps, gradually, increasing the PR effort with more exposure to the press.  We should think of the Market as a drunk, hysterical teenager and Tim Cook as the sober adult.  

    And yes, one of the most important things he’s doing is buying the stock.  He thinks it’s a good deal at the current price and he’s putting money where his mouth is.  I’m doing the same thing.  You’re free to do the same.  We investors can be impatient and greedy.  The Market is worried that Apple will stumble and I’m only 95% convinced they’re wrong.  There’s a risk in keeping your money in AAPL and many people, voting with their wallets, are more afraid than I am.  

    If you really believe the stock is undervalued, buy more.  If you don’t have enough money to buy, that’s unfortunate but that’s how we get to vote in this game.  Wall Street’s having an amazing sale on AAPL right now!  Get out your wallet and express your confidence!
    Apple is barely reacting, so I don't view their problem as one of 'not overreacting.'

    Of course one should -- and I did -- buy more if one thinks the stock is undervalued, but as an investor, one would be a fool to become too undiversified.

    I am now well past the point where I'd want to add much more AAPL to my portfolio. 
    palomine
  • Reply 13 of 115
    Apple needs to change the aura of secrecy. This may have worked when Jobs was in charge but nowadays, it is hurting the stock. That being said, the FANG stocks are for sure trading in bubble territory. Amazon is completely out of control with a PE close to 1000:1. It just isn't sustainable. I work in enterprise IT and many customers flock to AWS and then realize they cant stay there forever because it is way too expensive for everyday traditional IT workloads. FB is completely useless as a platform, mainly serving middle-aged people who want to post their entire lives in the world's largest trash can. Google is a one-trick pony dependent on ad dollars. Netflix still loses money on a regular basis.

    Apple will survive because the products are real. You can touch them, use them, etc. But there needs to be some more visionary stuff that people can look forward to if you want the stock to continue to grow. Right now, by the time Apple talks about something new the whole world knows about it because it already leaked. Look at the stock during one of Apple's announcements. Once some ridiculous feature is seen to not have been coming (i.e. a sapphire screen) the stock tanks during the trading day. 
  • Reply 14 of 115
    ac1234ac1234 Posts: 138member
    dmdev said:
    sog35 said:
    Agree 100%

    Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

    2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth.  Apple has so many current and future revenue streams to easily double revenue from this point.  But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

    Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

    Something is wrong with Apple's investor relations. I can't even speak to a live person.  I call the number and all you can do is leave a message.  I left 3 messages and no one called back. I mean what the fuck.  I have tens of thousands invested and they can't even return a fucking phone call?

    Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF.  You never hear this kind of shit directed at Google/Amazon/Microsoft CEO.  Only Cook. Whatever he is doing, he is doing it wrong.
    Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
    And what has the great buyback program gotten us thus far?
    edited December 2015 palomine
  • Reply 15 of 115
    vvswarupvvswarup Posts: 330member
    AAPL is a fine dividend stock, but those high growth days are OVER. Amazon is the clear winner.
    AAPL posted better growth in revenue and profit despite earning twice as much revenue and profit at Amazon. It's easier to make 20% growth on $100 million than 20% growth on $1 billion. For all the "investing in the future" that Amazon has been engaged in, it should at least be beating Apple in revenue growth. That hasn't happened. Why?
  • Reply 16 of 115
    ac1234 said:
    dmdev said:
    Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
    And what has the great buyback program gotten us thus far?
    In theory the buyback program doesn't deliver much since the money's just moving from the books to the stock.  In practice?  Well, in this case, up to now, the buyback program has been a great real-world example of why the grasshopper needs to practice patience :=)
    Solimacky the mackythepixeldoc
  • Reply 17 of 115
    ac1234ac1234 Posts: 138member
    ac1234 said:
    And what has the great buyback program gotten us thus far?
    In theory the buyback program doesn't deliver much since the money's just moving from the books to the stock.  In practice?  Well, in this case, up to now, the buyback program has been a great real-world example of why the grasshopper needs to practice patience :=)
    I think the evidence is that it has been a great real-world example of how to waste $100,000,000,000+.  They very craftily call it an return of capital - very different than the ROI that long term investors are deserving and expecting.
  • Reply 18 of 115
    ac1234 said:
    In theory the buyback program doesn't deliver much since the money's just moving from the books to the stock.  In practice?  Well, in this case, up to now, the buyback program has been a great real-world example of why the grasshopper needs to practice patience :=)
    I think the evidence is that it has been a great real-world example of how to waste $100,000,000,000+.  They very craftily call it an return of capital - very different than the ROI that long term investors are deserving and expecting.
    No way has it been wasted.  When Google bought that phone part of Motorola, that was a waste of billions.  When Microsoft bought Nokia, that was another waste of billions.  I see both of those large mistakes as acts of desperation in response to Apple's success.  I advocate patience.  Lets talk about this when the Watch is five years old.
  • Reply 19 of 115
    Here's something I think Apple could do that would have a positive impact on the stock:

    Right now Wall Street is obsessed with the Cloud and companies like Amazon, Google and Microsoft have been rewarded for it. Wall Street is also looking for more recurring revenue streams outside of hardware. Cook should poach a top notch cloud expert and make them an SVP running Apple's cloud business, maps and Siri. I think it's pretty clear the cloud is not Eddy Cue's forte. Brining someone in from the outside and making it an executive level position would signal that Apple is serious about the cloud, machine learning and improving all of Apple's cloud services. This would free up Eddy Cue to focus all of his efforts on Apple's content businesses and expanding Apple Pay. This would show everyone that Apple TV, Apple Music and Apple Pay aren't hobbies but serious platforms Apple wants to expand and better monetize.

    Second I think Apple has to become better at controlling the narrative and presenting their vision. On John Gruber's latest podcast he said this years WWDC was the worst Apple keynote ever mostly because of the Apple Music section and that it ran over 2 hours. The first question is, why was Apple Music even part of that keynote? It's first and foremost a developer conference. And when they did a run through why didn't anybody tell Eddy the Apple Music piece was a bit of a mess and it should have been tightened up (and shortened)? The 60 Minutes piece took us inside Jony's lab but we didn't really see anything. Why not use it as an iPad Pro/Apple Pencil marketing opportunity and show us the development of those products? And why let CBS even bring up taxes and China manufacturing? In theory this is supposed to be a puff piece, but all the media focus ended up being about Tim's comments on taxes. Then just after Tim gets done saying Apple pays every tax dollar it owes we find out about this $300M+ settlement with the Italian government over taxes. Wut?!? Maybe Steve Dowling is in over his head and Apple needs to bring in a stronger PR chief.
    iqatedoanantksundarampalomineradarthekatthepixeldoc
  • Reply 20 of 115
    larryalarrya Posts: 552member
    I have never been an "Apple is doomed" person, but with the latest move by AT&T to remove subsidies (and Verizon is sure to follow), I am worried about long-term iPhone sales.  I, an avowed device nerd/geek who has been on iPhones the 3G, and Windows Mobile and Palm Pilots before that, am actually considering ending my addiction and going back to a flip phone because I am disgusted by the cost (when my cellular bill + device lease payment rivals my car payment, it gives me pause).  I know there are many customers who are already on these newer non-subsidy plans, but I have to believe a significant chunk of the population will be mad enough to just walk away now, or when the next shoe drops.  I think this is built into the stock price and is also part of the reason it is undervalued, compared to other companies who can control their own destinies.

    No, to preemtively answer sog35, I have not compared to valuations for other phone manufacturers.  This is just something that seems like a substantial, inevitable hit to the biggest part of Apple's business; and if I were an investor, it would scare me and make the stock less valuable to me. 
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