[telecom] Investors Grapple With Core Reality of Apple

Investors Grapple With Core Reality of Apple

By STEVEN RUSSOLILLO January 17, 2013

As shares of Apple Inc. tumbled below $500 this week, Daniel Genter and his colleagues at RNC Genter Capital Management started worrying they had made a mistake.

The Los Angeles firm had bought Apple in mid-December in the low $500-range, its first foray into the stock. Analysts there figured that a decline in the shares had made it cheap enough for a value investor like RNC Genter.

But this week's drop sparked "a change of thinking," Mr. Genter said. As the shares fell below $500, analysts met to discuss whether the firm should sell and cut its losses.

In the end, RNC Genter elected to keep its position in Apple for now. "We haven't made any decisions yet, but we're assessing the situation," he said.

RNC Genter's dilemma is widespread. Investors large and small are grappling with what could be a watershed moment for Apple. In many fund managers' eyes, the recent decline could mark Apple's transformation from a fleet-of-foot growth stock-one that is seen as risky but whose growth prospects could lead to big gains-to a more plodding value stock-one that trades at a low price relative to earnings and offers regular payments such as dividends.


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