5 compelling reasons to buy Apple stock – right now

“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

28 Comments

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

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