Buy the rumor, sell the news. A lot of this was baked in over the past week or so when whispers began of things getting slightly better, China stores opening, manufacturing ramping up, Gildead's drug showing good results, people in general taking the issue seriously (masks, etc.), the JHU charts showing slight improvements, etc. The market is a forward-view prediction mechanism. With this pullback, the stock will gain steam and charge forth slowly back to $310, then $325.
Apple stock is hugely owned by an incredible number of funds and institutions, more than we really know. Apple is probably on par with Berkshire Hathaway in the wideness of investment funds, especially since both companies are effectively conglomerates. As a result, the stock moves slowly, defying our fandom logic.
Yes, Apple deserves a $400+ price tag, probably closer to $500; look at Amazon or Microsoft.
AMZN has a PE of 107, whereas AAPL is a PE of 23, and MSFT has a PE of 31.
So AAPL has annual EPS of 12.66, and PE of 23: 23*12.66 = 291, where it roughly is now.
Pretend AAPL deserves MSFT's multiple, the closest similar company, with the same EPS, 31*12.66 = 392 per share.
But let's swap AMZN's PE of 107 for AAPL: 107*12.66 = $1342 per share!
So it's likely fair to say AAPL deserves a much higher multiple than a paltry 23, compared to at least Microsoft's 31. So yeah, Apple at $285 is incredibly, hilariously, undervalued. It always has been, tho.
As many of us jokingly say here, even Wall Street still thinks "Apple is doomed". So long as iPhone has 50% or more of the total revenue, Apple is always going to be doomed. Despite the growth of Services and Wearables. iPhone has to get down to 40% (maybe 30%?) before they aren't "doomed". Cook's era has eased that concern, tho, especially with the buybacks and dividend he re-instated. They still have a ways to go.
