If you think that Apple has been performing badly lately, then you are in for a treat. The stock continues to make huge profits and generate massive sales. Apple has a strong marketing mix and a lot of cash on hand. But does that mean that a big drop is a bad news for the entire market? Is AAPL really the worst stock to buy? Let’s explore.
AAPL’s poor trading performance
Although Apple stock has made a strong run over the past few years, its trading performance has been less than stellar. Below, we look at some of the worst trading days for Apple. Read on to learn how AAPL’s poor trading performance has affected the entire market. But it’s also important to note that the stock has historically been a very volatile one. While AAPL’s trading performance is certainly not representative of the market’s recent performance, it does indicate a trend that Apple is likely to continue struggling.
AAPL’s focus on supply-side
There are a couple of possible scenarios as to why AAPL’s focus on the supply side is bad for the entire market when Apple has a huge drop. First, the company could experience a large earthquake in its supply chain, or the Chinese may invade Taiwan and disrupt its semiconductor supply chain. Then there is the possibility that computer algorithms will be triggered to trade AAPL stock.
AAPL’s high cash flow
Apple has a reputation for being a safe haven for investors who are wary of falling stocks. However, the sale of its stock is not a good sign for other companies. It also shows deteriorating investor confidence. According to Renaissance Macro Research’s Jeff DeGraff, there’s no hiding place in a bear market, and the company’s leadership is being replaced. While this could be a positive development for AAPL, it could be bad news for the entire market.
AAPL’s marketing mix
Despite all the negative publicity that Apple receives from investors, it’s not hard to see how the company can continue to make such massive profits and sales. Apple’s marketing mix has worked well for them so far. The company has paid discounted rates to the production crews for many of its films, and the Observer estimates that it has about 8.1 million paying subscribers in the US alone.
AAPL’s ability to weather downturns
Apple is the world’s most valuable company, with over $207 billion in cash on hand. Despite this, its recent second-quarter results have disappointed investors. The administration has forecast a significant hit to its high and backside-line. The company is blaming supply-chain problems, global shortages of semiconductors, and pandemic-led disruptions. The company is also sacrificing some profit margin to drive more units. The company has a history of navigating through tough times.
AAPL’s ability to return profits to investors
The current AAPL stock price is overvalued by about six times its intrinsic value. Even with its inflated price, Apple is still considered to be one of the most valuable companies in the world. In fact, the company’s free cash flow (FCF) is expected to reach $822 billion over the next several years. That is enough cash to pay off all of Apple’s debt seven times over and buyback thirty percent of its stock at the current valuation. And no company has ever bought back more stock than Apple has. The company has repurchased 38% of its net stock since 2013, or 6.6% a year.
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