Topeka Calls Apple Share Sell Off ‘Insane’

Brian White, an analyst at Topeka Capital Markets says that the recent sell off of Apple shares in “insanely insane”. Shares of Apple rose more than 7 percent early this week after a two month sell off by investors. Apple is currently the most valuable company in the world. The day that Apple launched the iPhone 5 Apple’s stock went up to $705.10, the highest it has ever been. Since then Apple’s stock price has corrected itself by dropping more than 21 percent.

White justifies his criticism of an Apple sell off as insane by saying that the 8 week sell off was completely overdone. He cited new “blockbuster” products that Apple released for the holiday season like the iPad Mini. He thinks Apple could grow its earnings per share at a rate of 20 percent to 30 percent per year over the next five years. That’s based on the company’s low market share in mobile phones and PCs, “combined with growth opportunities in tablets and new potential areas such as Apple TV.”

That said, the Cupertino, Calif., company warned late last month that the costs of making new gadgets would cut into profit in its holiday quarter. On the same day, the company fell short of Wall Street expectations for the second quarter in a row — something that hasn’t happened in more than a decade.

Monday’s increase is the biggest one-day gain since May 21, when the stock closed up 5.8 percent at $561.30. Shares of Apple Inc. rose $38.05, or 7.2 percent, to close at $565.73 Monday. Even with the gain, the stock is down nearly 20 percent from the record high of $705.10 struck on September 21.

There are plenty of analysts who do not share White’s optimism about Apple, citing as their main reason the seemingly shifting business strategies that have been employed since the death of founder Steve Jobs. Jobs made sure to keep Apple product launches on a strict release schedule to maximise impact. Apple now seems to release products quicker, making it more difficult for people to buy new products.

Do you think that Apple is overvalued or that it is worth way more than people think?