Apple, not so long ago one of the world’s only two publicly tradedcompanies with a market capitalization of over $1 trillion, seems to be havinga really bad time. With a market cap of ‘only’ $804.82 billion as of today, AppleInc. has lost 27% of its value over the course of 2 months. One AAPL stock,traded at around $232 on October 3rd, is worth $169 now.
With a price-to-earnings ratio (P/E) of 14.19, AAPL stock compares unfavorably to the industry, that on average has a P/E of 12.08. The metric means that investors will have to pay $14 now for every $1 of earnings the company gets in the future.
To add insult to injury, China has prohibited the distribution of almost all Apple smartphones (the regulation is most likely used as a pretext to force the American high-tech giant to leave the Chinese market and stimulate domestic manufacturers). China has always been an important market for Apple and losing it will no doubt negatively affect the stock price. Disputable state of the U.S. economy and U.S.-China trade war hurt the financial wellbeing of the company, as well.
“It’s very hard to have conviction in Applewhen there’s so much uncertainty and the only thing we know for sure is thatthe company’s not going to disclose the number of iPhones it sells. I’m evenhearing people fret that Apple may pre-announce to the downside because theprevious guidance was too bullish,” says Mad Money host Jim Cramer.
However, Apple is not the only huge international company to recently losea portion of its value. According to Reuters, 49% of S&P500 stocks are inthe bear market. Some may even take that as a harbinger of an upcomingdownfall.
Is it time to short sell AAPL stock? The bullish trend seems to be over,at least for now. But as you probably already know, in the financial marketswhat falls quickly will most certainly rise once again. Who knows, maybebullish investors will soon get an opportunity to trade Apple once again.Trade now
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
GENERAL RISK WARNING
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
77% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.