not vested
At-Risk American “BFG” Stocks: Apple Inc. (AAPL)
Judging by the commentary following Apple Inc. (NASDAQ:AAPL), any criticism of the house that Steve Jobs built is tantamount to fighting words.
Nevertheless, despite its BFG status, AAPL is not immune to the Brexit fallout. In uncharacteristic fashion, AAPL stock is down 9% year-to-date. While there are other factors besides the Brexit involved, a weakening Europe is not doing Apple any favors. This circumstance is exacerbated by the fact that AAPL is losing substantial ground in the critical Chinese retail markets.
The alarm bells are also being sounded by Citigroup analysts, who note a slide in iPhone upgrades by once rabid consumers. Any hit to iPhone sales has an exponential effect, considering that smart phones make up two-thirds of AAPL’s total revenue. That was one of the reasons why renowned activist investor Carl Icahn dumped out of his position in AAPL stock.
But with the Brexit moving from a conspiratorial fantasy to a stark reality, that decision looks even more genius in hindsight.
This is not to say that AAPL is a short candidate. Sales of iPhones could see an improvement over the next several months as many customers are multiple generations behind the current model. In addition, AAPL stock is holding onto horizontal support, frustrating bears that want to see it decisively falter. Still, it’s very conceivable that this BFG could meet some nearer-term volatility brought on by the Brexit.
With the waters still murky, the best course of action with AAPL is to wait and see.
Source: Investor Place
