“In late 2002, Apple changed the landscape of its future with the launch of the iPod. The iTunes store soon followed in 2003 and the stock has been about a ten-bagger since,” Georges Yared writes for Blogging Stocks. “So, with the stock up 10 fold in 4 years, why is it a table pounding buy today?”
Yared’s 5 reasons why Apple, Inc is a buy today:
1. December 2006 quarterly results were stunning.
2. Apple retail stores sell over $4,000 of merchandise per square foot, making it the number one retailer in America.
3. iPod sales were 21 million in the December quarter alone.
4. Apple’s Mac business, CPU market share and general software upgrades are selling through with double digit growth.
5. The iPhone will be huge.
“There are many other reasons to buy and own Apple, like corporate growth at 20% plus, sustainable, high cash flow generation, eventual wireless offerings of iTunes products and more,” Yared writes.
Full article here.
Related article:
Citigroup upgrades Apple Inc. from ‘hold’ to ‘buy’ – February 12, 2007
And Marissa Miller has one. That’s enough for me…
..an iPod that is…
Please make a note that the iPod was announced in October 2001.
http://www.apple.com/pr/library/2001/oct/23ipod.html
Now if I only had some money…
Disagree….
whereas I am a mac fan, love the products, use them, and tell others to use them….
the stock is a bit high right now – with a PE of 30+ …..
The future is very bright for the COMPANY – but I don’t know about the stock…. It needs a bit of a breather for things to catch up….
If you buy it – buy it and forget it for 5 years…. don’t watch it daily – you’ll get ill.
so, a question for all the stock nerds…
Is it too early to be thinking — split ?
I bet there isnt a split in the cards. Companies just dont split it for no reason, or when it gets to a certain number.
Splits generally are executed as a way to stimulate buyers but I dont think that’s a problem in AAPL’s case
Just look at GOOG. They dont seem to be in a hurry to split.
Perhaps someone else can shed some light on reasons why a company would split. I just dont think it’s going to happen just beacuse it happened at 90 before.
P/E multiple of 30+ is not expensive for a company with high growth rates as long as interest rates stay low and, of course, if growth is expected to stay high.
That’s really what should be behind a decision to buy or not buy. Do you expect that Apple will be able to maintian this rate of growth for the next few years? If yes, then the stock is not expensive.
Actually the current years p/e is 30+ but the fy p/e is only @ 22.5 based on current projections. If we believe that apple will once again blow away those projections it would place the p/e down below 20 make it a great buy. With a p/e that low within a year you could triple your investment.
Dident iTunes Come First?….. Then The iPod ??
Rory,
“the stock is a bit high right now – with a PE of 30+ …..” doesn’t make sense to someone who was holding AAPL through the last 5 years. AAPL’s 1200% appreciation occurred with a forward p/e of 35 to 40 during most of that time. Compared to that, it’s cheap right now.
Rory,
Have to disagree with you. Right now, the stock will be down from where it will be in six months or so, certainly after the first quarter results come in after iPhone has been on sale. Add to that Mac OS X.5, new laptops, new Mac Pros, new iPods, and Apple is set up for a strong run right up to the Christmas shopping season. I don’t see the stock going down at all beyond minor, ordinary fluctuations.
Once again, everyone misses the Apple TV product and the impact it will have.
HAB
You don’t buy the stock based on the past.
Although I think the stock is a great buy at this price point, it is not for all the reasons listed in the article.Here’s my take:
Reasons 1, 2 & 3 are past and they are not to be factored
Reason 4 is ok but will need to bank on the LEopard system stealing some Vista shoppers (this will happen!)
Reason 5 is a good bet, but it will not be complete without the cheaper phones Apple could release to catch the bottom line.
and a PE of 30 is not expensive for a growth stock like Apple
2008 FPE is like 22 or something.
Just bought more. And next week I might buy more if it stays in the mid 80’s. =) Good times ahead.
-c
Reply:
1. Stock prices are based on future results, not past.
2. Hmmmm…where did he get that figure and what does it mean? Should Apple stores be larger? Apple has not been opening enough stores?
3. Old news – it´s next quarter´s sales that count.
4. Desktop sales are way off. Apple slow to bring out new products.
5. Pure guess and no reason to buy a stock. iPhone already priced into Apple stock price.
“Please make a note that the iPod was announced in October 2001.”
He took the words right out of my “mouth”. I should
know, I’m still using my 1st gen 5gb iPod!
@ Rog Dodge
iPod came first
Here is the order of introductions, for anyone who is confused:
iTunes (January, 2001)
iPod (October, 2001)
iTunes Store (April, 2003)
A year and a half passed between the introduction of the iPod and the iTunes store. The iTunes app itself preceded both.
–mAc
Not that analysts are any better, but this guy is not an analyst and all 5 of his reasons are based solely on emotion. His 5 reasons are NOT a reason to buy Apple stock right now. Mac sales have not been that exciting, the stock is slightly overpriced, and iPod sales are eventually going to slow down sooner or later. There is also no guarantee that the iPhone is going to be a hit. I know PLENTY of people, including myself, who will NEVER buy an iPhone unless it ran all the dozens of Palm applications that my Treo currently runs. Apple is also WIDELY known, now… whereas it was a little niche stock before. Everybody is watching it on a minute-by-minute basis now, so there’s not as much of an opportunity for the stock to accelerate.
Oh my,
Why worry about a split. A stock split does absolutely nothing for you. It gives you twice as many shares, but cuts the price in half (or in 3x and 1/3 if you do a 3 for 1 split). So, if you have 100 shares and the price is $90 per share, after the split you’d have 200 shares, but the price is only $45. Still $9000 in value either way.
Some folks think that this allows the “small investor” to get in. That doesn’t matter much. The small investor that can’t afford a $90 stock is of no consequence to companies. The only value that a stock split really gives you is that it shows company confidence in the price that it hit; it makes news and makes people notice that the stock is going up. That’s about it.
GOOG could split if they want to, but again it would not do much. They keep it high because it feels good to them. It portrays cockiness.
The photographer who set this is is a smart guy. He is making TONS of free publicity.
Oops, wrong article. LOL. That was meant for the Marissa Miller article.
iTunes came before the iPod for Mac, but not for Windows.
@ swimbot
Please stop talking. You have no idea how to do it properly.