Apple Isn't Broken, but It's Angry

 | Jan 24, 2013 | 10:04 AM EST
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Apple's (AAPL) management team has an approach to earnings calls and product launches: Never let them see you sweat.

Last night's earnings call was the first time I've heard irritation in the voices of CEO Tim Cook and CFO Peter Oppenheimer. I think that surprised a lot of people and added fuel to the fire of people who suspect that Apple's best days are behind it.

As I said on CNBC earlier yesterday, I expected Apple to meet Wall Street's consensus revenue and earnings targets but expected that to cause some hand-wringing by analysts and cause the stock to sell off in the aftermarket.

However, I didn't expect it would be a 10% selloff. I would have guessed something more like a 5% drop-off.

But I also expect the stock to be down less than 10% by the end of today. I believe there will be a lot of buyers at this level to step in.

Many Apple bears (or casual observers) say that Apple is now a broken stock. They say that the company doesn't have any exciting new products to offer in 2013, and they downplay the importance of the new TVs expected later this year.

However, at the aftermarket levels, the stock was 35% off the September highs. That's a large retracement for Apple. And the sentiment on the Street has gone so negative in the span of three or four months. History suggests that that's just the time to start to get long the stock.

It's interesting to hear the anger in the voices of Cook and Oppenheimer. Cook took the time to basically debunk the Wall Street Journal rumor of a supply-chain cutback from a few weeks ago. Cook also showed annoyance at the question from Keith Bachman of BMO Capital Markets. Oppenheimer changed up some of the metrics he reported to the Street.

Jim Cramer had an article earlier today on Real Money in which he said that all these things were bad signs, as they showed a management that wasn't really willing to be straightforward with the Street on the call.

However, my take is that it's nice to see a fire lit under Apple management. I like it that these execs now have a chip on their shoulder.

I was a fan of Tim Cook's at $700, and I'm a fan of his now sub-$500. I think he's doing all the right things in directing this company forward, even if that doesn't always thrill Wall Street.

But at the end of the day, if you're trying to decide whether or not to own this stock, I think you'd be wiser to pay more attention to Apple's performance over the last six months and do the inverse of the trend. It's seemed to work in the last eight years for Apple.

We've always had these concerns that Apple had grown too big and can't innovate. That view existed before it introduced the iPhone in 2007.

At some point, Apple will address that concern head on with some exciting new product, and it will propel the stock higher.

But in 2013, even if the only "new" thing we get is TV, we still could see the stock perform well off of these levels as people feel it will bounce up because the Street is now too conservative.

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