With All Bad News Baked In, Apple Inc. (NASDAQ:AAPL) Offers Upside Later This Year

Apple stock

Apple Inc. is surrounded by quite a lot of negative news, despite that the stock refuses to drop. Considering this, “Mad Money” host –Jim Cramer – thinks the stock may offer an upside later in the year. “Have you noticed that they have thrown everything at Apple but the kitchen sink, and the darned thing just won’t come down?” Cramer noted.

Apple, Inc (AAPL) Tim Cook

Negativity baked into the Apple pie

Apple refused FBI to unlock the iPhone of a criminal, thus, gaining attention from many presidential candidates, one of them being Republican Party candidate – Donald Trump, who even called for a boycott of the firm. “Hate him or love him, Trump’s got more airtime than anyone on Earth, and if he chooses to hammer Apple, it won’t be positive for the company’s sales,” Cramer said.

If Apple Inc. does unlock the phone owing to the public pressure, then Cramer feels China would want to do the same. China is a big market, and it appears natural that the communist party will join Trump in boycotting the Apple products.

Cramer cites channel check studies with analysts predicting sales of Apple products to be dreadful. Apple is about to launch its iPhone 7 in the fall, so there could be excess stock of the products. Maybe, the firm is buying back stock knowing that the next time it reports will be before the release of the iPhone 7.

Cramer thinks selling the stock now, when everyone knows that Apple could have a weak quarter, could be counterintuitive. And, since the stock is trading at 10 times the earnings, Cramer feels the bad news are already factored into the stock price.

“Apple could have some real upside later in the year, which is why I reiterate my view that you want to own this stock, not trade it,” Cramer said.

Foxconn acquires Sharp with Apple’s help?

In separate news, last month there were reports that Apple supplier Foxconn had bid $5.3bn to acquire Sharp – a Japanese display maker, who has been facing manufacturing and financial issues for several years. Now, a report from Nikkei Asian Review claims that Sharp has accepted the offer from Foxconn for $6.2bn.

Initially, it was reported that Foxconn would acquire Sharp with an investment help from Apple. And, after the acquisition, Foxconn would hold a majority stake in the firm with Apple in the board as investor. How much of this rumor is true, and if Apple Inc. made any investment, is still unknown. If Foxconn acquired Sharp, then the firm can now do more than just assembling devices, and can possibly make iPhone components.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.


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