Apple’s shares have been beaten down for months, primarily due to concerns about stalling sales of the iPhone 6 family of smartphones. As some analysts upgrade their ratings on the stock due to arguments about valuation, and skepticism about the iPhone weakness, Apple’s stock has out performed the DJIA, of which it is one of 30 components, so far this year.
The Dow is down 8.3% to 15,988 so far in 2016. Apple’s shares have fallen 7.7% over the same period to $97.13. The company’s stock has also out performed other tech stock in the Dow. Shares of Cisco (NASDAQ: CSCO) are off 13% to $34.62. Shares of the resurgent Microsoft (NASDAQ: MSFT) have fallen 8.1% to $50.99. Intel’s (NASDAQ: INTC) have fallen 13.6% to $29.76.
24/7 recently pointed out the major reasons that short sellers have dropped their position in Apple’s shares:
The short interest in Apple Inc. (NASDAQ: AAPL) dropped 8.1% in the period that ended December 31 to 68.2 million. Apple ranks eighth on the list of most shorted shares of companies traded on Nasdaq.
The size of the short bet tapered off despite deep and growing concern about Apple’s momentum, particularly in terms of iPhone sales. In the past month, its share price has dropped 11.1% to $100, and it is down 9% for the past year. That compares to a gain of 114.1% over the past five years, as well as to a 74.2% improvement in the S&P 500 over the same period.
Although several analysts have upgraded Apple recently, the overall sentiment has been poor. Forbes summed up the problem:BMO Capital, Canaccord Genuity, Cowen, JMP Securities and Pacific Crest decreased their estimates and price targets for Apple. BMO’s Tim Long cut his price target from $142 to $133, Canaccord Genuity’s Michael Walkley cut his from $160 to $146, Cowen’s Timothy Arcuri went from $130 to $125, Alex Gauna went from $165 to $150 and Andy Hargreaves cut his from $142 to $132.
Many made their decisions based to some extent on a projected slowdown or drop in sales of the previously white-hot iPhone 6 family of smartphones.
That sentiment about Apple has started, in several cases, to move in a positive direction
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