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After today’s post-earnings drop of 6%+, Apple (AAPL) is now down 26% over the last year. Below is a chart showing Apple’s year-over-year percentage change since 2001. As you can see, in the post-iPhone era, the stock has only had two other periods where it dipped into negative territory on a year-over-year basis. One was during the Financial Crisis (market related) and the other was in late 2012/early 2013 (company specific).
If you believe in Apple long-term, these dips haven’t lasted very long, but it’s also worth noting that year-over-year gains following the dips have gotten smaller and smaller. Given its market saturation in smartphones, the days of Apple as a “growth stock” are over. The only way for Apple to kick-start things again is through acquisitions or the “new products” category. They’ve done it before, and they can do it again, but for now, Apple is a “show me” stock. As in “show me” the path for growth going forward.
While Apple (AAPL) is no longer a growth stock, that doesn’t mean it’s not worth owning of course. Even though it’s the largest company in the world, its relative valuation is extremely attractive, and yesterday’s dividend hike gives it a yield that’s higher than the yield of the S&P 500 and the 10-Year Treasury Note.