Ripe or Rotten Apple (NASDAQ: AAPL)?

Apple (NASDAQ: AAPL) shares fall today on news that a top performing hedge fund manager cut his Apple position down considerably. Widespread negativity that the company may fail to beat estimates have also surfaced. Is this an opportunity for investors who have been looking to buy Apple on the cheap, or have they all given up and has the stock turned sour? So far today Apple has hit a low of $303.63 and a high of $316.50. This seems like a lot, but only represents a 4% swing from top to bottom. Of course hedge funds are trying to spread as many negative rumors as possible so that they can get in on the stock for cheap. The end of the quarter is coming closer and they must show that their yearly performance is up to par, by moving into the stocks that investors want to see them in.

All hedge funds aside, let's examine the fundamentals of Apple. Last quarter the company sold 14 million iPhones, the most ever, outpacing Research in Motion (NASDAQ: RIMM) at 12.1 million, for the first time. Apple says they would have sold more if they had more - a high quality problem. Perhaps this holiday season quarter, they will be ready for the demand. The company also has 3 new iPod designs for the holiday season, which it hopes will boost sales. What analysts are truly looking for however, is the iPad sales. Last quarter Apple sold just over 4 million iPads, missing analysts estimates for the device. What the analysts fail to notice is that iPad has just begun. It is no doubt the most feature-full tablet on the market, and there is very little competition for the device this holiday season. Apple is in a league of their own on this one. If the company does not experience production problems as it did last quarter, it will surely hit the estimates.

For the company as a whole, Apple expects to earn $4.80 per share next quarter. The Street was expecting $5, however Steve Jobs' estimates are usually conservative until he blows the estimates out of the water just as he has in each quarter over the past year. So, at approximately $308 is Apple selling on the cheap?