The general stock market has been hit quite hard recently. However, many tech stocks have deteriorated, as evidenced by the 19109th (19459004) Nasdaq Composite technological slowdown of 9% since October 1 compared to the more evenly weighted S & P 500s 6% setbacks in the same period. While some technical shares may have been due to a correction, the decline for two prominent companies may have gone too far.
These shares are Square (NYSE: SQ) and Apple (NASDAQ: AAPL) which have fallen 28% and 21
Shares of Financial Technology Company Square have been completely hit recently. With the 28% decline since October 1, Square has lost almost a third of the value. The bearish story around stocks extends beyond the broader market setback in tech stocks. The company's share also fell when news broke that Square CFO, Sarah Friar, said she planned to become CEO of Nextdoor (a social network for neighbors and communities) and then management gave a worse than expected outlook for fourth quarter earnings.
Although Square's stock has declined recently, business has been flourishing. In fact, the company has just been put up in the sixth quarter in third of accelerated revenue growth. In Q3, Q3 increased by 51% the previous year – up from 48% growth in Q2. Adjusted earnings before interest, taxes and depreciation, 107% jumped to $ 71 million a year.
For investors wishing to hold onto the long run, this may be a good time to pick up some shares in this fast-growing company.
Apple's warehouse has similarly been bothered recently by more than one tech sales. Numerous reports of poorer than expected demand for the company's latest iPhones have weighed it because investors wonder if their main business segment can continue to grow.
In Apple's last quarter, iPhone revenue increased 29% the following year. But this quarter represents mainly the last full quarter of the iPhone X and iPhone 8 cycle; iPhone XS was not released until the last weeks of the quarter. Investors are worried that the latest iPhones will not be able to live up to tough comparisons years ago. And Apple's guidance that total revenues only increase 1% to 5% show that even management expects the company's growth to slow.
But the decline in the share has been the price of these concerns. Stocks trade with a P / E of only 15. While a further decline is always possible, investors who buy at this level will probably not regret it for a few years from now.
Daniel Sparks owns shares in Apple and Square. Motley Fool owns shares of and recommends Apple and Square. Motley Fool has the following options: long January 2020 $ 150 call on Apple, short January 2020 $ 155 call on Apple, and short January 2019 $ 80 call on Square. Motley Fool has an information rules.