Apple CEO Tim Cook sat before a Senate subcommittee earlier this week and was questioned about the company's allegedly dubious tax structure. He argued passionately yet succinctly for Apple's tactics, which involve the use of Irish subsidiaries and a massive web of funds and accounts throughout other tax jurisdictions. While no lawmaker openly questioned the legality of these actions, Cook failed to assuage fears that Apple wasn't pushing the limits on lawful tax minimization.
As a stock, AAPL has had a tumultuous history during the past year, after plunging from all-time highs when the company had seized the title as the world's most valuable investment. Since then volatility has increased incrementally, fueled in part by concerns stemming from last year's New York Times report on Apple's tax dealings. The seemingly invulnerable company suddenly appeared to be capable of error in the eyes of investors, and the big drop was a reflection of these sentiments. This week's events only pushed more negative confidence into AAPL's price, which nearly hit $435 as the Senate's initial report on the Apple tax investigation was released.
What does this mean for investors in AAPL or those who might be considering a purchase? With a price this high it's tougher to determine when a bargain exists, so its better to look at risk levels and gauge the cost-benefit from that perspective.
According to SmartStop's Risk State analysis, Apple has been facing downward pressure since September 2012, with a tumble of $227.39 since that date – and despite some positive news from the company AAPL's price risks falling even further. However, those who utilized SmartStops to protect their portfolios and adjust to downward trends accordingly could have saved $281.95 during that time.
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Categories: Risk Management, Trading & Portfolio Strategies