John Paczkowski

Recent Posts by John Paczkowski

iPhone 5 Will Spike Apple Shares, and You Know It

The 8.8 percent dip Apple shares suffered in the past week isn’t a harbinger of a larger decline; it’s a buying opportunity ahead of the company’s March-quarter results.

That’s the word from Barclays analyst Ben Reitzes, the latest Apple observer to express optimism for the company amid the rough patch its shares have been experiencing lately. Hard to imagine that such expressions of optimism are even necessary, considering that Apple’s shares have surged nearly 60 percent to a high of $644 this year. But evidently some investors are too risk-averse and easily frightened to actually own the stock.

Anyway …

Reitzes says that now is not the time to bail on Apple’s stock. And, like Goldman Sachs’s Bill Shope before him, he argues that concerns over softer-than-expected Mac sales, iPhone subsidies and too-lofty expectations for iPad and iPhone sales are misguided. He also notes that, historically, Apple shares have risen significantly in the six months prior to a new iPhone’s debut. Which bodes well for investors, given where we are in the calendar year.

“Our research indicates that Apple’s shares appreciate 31 percent in the 6 months ahead of every major new iPhone ship date,” says Reitzes. “We believe this phenomenon occurs given datapoints from the supply chain start to indicate a significant acceleration in iPhone sales after each launch. … Since we believe that [the] iPhone 5 cycle will be particularly special — and start in the September timeframe — it is not time to give up on Apple’s stock right now.”

In other words, Apple’s market cap is likely to see further gains. And the second-quarter earnings the company will report on April 24 may well be the jumping-off point.


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