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Nokia And BlackBerry Look Like Winners, As Apple’s Buzz Cools Off

Posted: October 13, 2017

Photographer: David Paul Morris/Bloomberg

Nokia and BlackBerry are beginning to look like winners on Wall Street, as Apple’s buzz cools off. In the last six months, Nokia’s stock gained 12.20%, BlackBerry gained 43.33%, while Apple gained only 7.25%, underperforming Nasdaq, which was up 10.20%.

Still, Nokia’s and BlackBerry’s stocks are trading well below their highs back in the old days, before iPhone stole the buzz from them.

And their comeback is less a matter of new buzz for the two companies than it is bargain hunting among investors and romantic fans who see some value left in the old mobile communications pioneers.

Company 6-Month Price Change 5-year Price Change
BlackBerry 43.33% 43.46%
Nokia 12.20 134.38
Apple 7.25 71.32

NASDAQ 100                            10.20                                           107.13

Source: Finance.yahoo.com 9/30/2017

Company PEG Ratio Return on Assets
BlackBerry -19.13 0.48%
Nokia 0.83 1.61
Apple 1.45 11.52

Source: Finance.yahoo.com 9/30/2017

Company Revenues Operating Margins
BlackBerry 1.05B 3.05%
Nokia $28.27B 4.83
Apple $223.51B 26.84

Source: Finance.yahoo.com 9/30/2017

While buzz for Nokia and BlackBerry products hasn’t come back, the buzz for Apple’s products is cooling off, as evidenced by a number of “red flags” rising around the company. Like the shorter lines of consumers outside Apple’s stores for the release of iPhone 8. And a sharp slow-down in Apple’s sales growth, from 27.10% back in June 2015 to 7.20% recently — see tables.

Then there’s the squeezing of operating margins from 30.15% to 26.84%, and a sharp slow-down in the company’s profit growth from 32.70% to 11.80%.

Apple’s Key Financial Metrics as of October 3, 2017

Forward PE 14.09
Operating Margin 26.84%
Qtrly Revenue Growth (yoy) 7.20%
Qtrly Earnings Growth (yoy) 11.80%

Source: Finance.yahoo.com

Apple’s Key Financial Metrics as of November 29, 2016

Forward PE 11.09
Operating Margin 27.83%
Qtrly Revenue Growth (yoy) -9.00%
Qtrly Earnings Growth (yoy) -19.00%

Source: Finance.yahoo.com

Apple’s Key Financial Metrics as of June 23, 2015

Forward PE 13.11
Operating Margin 30.15%
Qtrly Revenue Growth (yoy) 27.10%
Qtrly Earnings Growth (yoy) 32.70%

Source: Finance.yahoo.com

Meanwhile, Apple has very little to demonstrate to the world in terms of new products, other than different versions of the  iPhone, iPad, and MacBook, all developed by Steve Jobs. In fact, Apple’s innovation machine is slowing down. The company is way down on the patent list, which is topped by IBM IBM +1.53% and Samsung.

Nokia’s and BlackBerry’s history is a stark reminder to Apple’s leadership  of what happens to technology icons when the innovation machine slows down and the buzz for their products is gone.