It’s fair to say that for a company with zero debt, $137 billion in the bank, and still turning out massive profits Apple (AAPL) doesn’t fit the profile of a troubled tech stock. Yet, the hits against the ticker keep coming. Last week two new negative headlines greeted long-suffering Apple stockholders – increased regulation in China related to accusations of supposedly double standards in customer service and returns policies for Apple items, and the company being downgraded by Goldman Sachs (GS) on concerns that Cupertino could miss the Street’s expectations for both its March and June quarters. The investment bank cut their AAPL price target to $575 from $660.
But while the deluge of bad news did spread investor fear, pushing Apple’s stock to lose more than 5 percent of its value during the week — Apple’s 52-wk low is $419.55 ; not too distant from its current pps of $423 — it also brought out hoards of longs precisely because others are most skeptical.
Count Eric Jackson, founder of Ironfire Capital LLC, among the Apple longs. He started buying the iPhone maker’s stock earlier this year and has been adding to the position recently in the $430/$440 range.
“The big thing is that a lot of these analysts have thrown in the towel, downgraded the stock and talked negative about it. So all that is out there now. I think that there is some truth to this idea that when everybody is sort of looking away, walking away [from the stock]….that’s the time to step in,” Jackson says.
When asked by ‘Breakout‘s host Jeff Macke whether this is an emotion-based argument, and that Apple may indeed have some fundamental problems, Jackson pointed toward the fact that Apple is still the most profitable company in the tech sector.
Looking through Apple’s price chart over the last eight years, Jackson notes there have been plenty of periods where the stock has declined or done nothing for 6 to 10 months.
“They’ve been here before and they’ve always sort of come through and I expect the same thing eventually,” Jackson said.