Apple investors should always, always play long

“Ahead of another earnings report from Apple, analysts were anxious about iPhone shipments in general and the Chinese market in particular,” Stefan Redlich writes for Seeking Alpha. “This recurring pattern of doom and gloom has been beneficial to savvy investors ignoring all that noise and instead trusting Apple’s management on the company’s operations rather than reading too much into anecdotal evidence from suppliers.”

“One comment [from Apple CEO Tim Cook] in the earnings call from Apple clearly stands out, as it is unique: ‘And so I do think – I don’t buy the view that market’s saturated. I don’t see that from a market point of view or – and certainly not from an iPhone point of view. I think the smartphone market is sort of like the best market for a consumer product company in the history of the world and – but that’s how I feel about it. It’s a terrific market, and we’re very happy to be a part of it,'” Redlich writes. “This perfectly sums up why Apple is such a fantastic investment and shows that Wall Street consistently underestimates Apple’s business.”

“Digesting all of Apple’s figures and its future trajectory, it is absolutely shocking and a great gift at the same time that Apple is only trading at a valuation in the mid-teens. If the market ever assigns Apple a 20-25 times earnings valuation, which it certainly deserves, the stock will catapult to $200 and then $300. As long as this does not happen, we should welcome the opportunity to purchase such a one-of-a-kind company at discount prices,” Redlich writes. “To sum up: Apple = Buy it now or regret it later, or as another reader phrased it: AAPL = Always Always Play Long.”

Read more in the full article here.

MacDailyNews Take: Even near an all-time high, the case can be made convincingly that Apple is woefully undervalued.

We’re not sure that most analysts or investors can really wrap their minds around the vast amounts of money that the machine that Steve Jobs built has generated, is generating, and is capable of generating going forward.

As Jim Cramer has said of AAPL: Own it, don’t trade it.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

8 Comments

  1. Is since 2007 long enough? Stock up 2000% since then.
    Typically owning a large sum of one stock is not a good idea but in my case it was a relatively small sum that has grown big. Since I understand more about the company than apparently analysts do, I am comfortable with the risk until I feel that AAPL is not a good stock to hold.

    1. Not to pick your nit, but I think it’s been more in the neighborhood of 1400% since January 2007, when I bought at $96, pre-split, after the iPhone announcement.

      1. Yup. Started trading  at ~$13 Off and on. Buy/sell, rinse & repeat. Then Apple came out with the iPod and I jumped in with both feet at $77 pre-split. Been long ever since.

  2. I’m happy with the increased dividends and all Apple has to do is come out with an additional hit product within the next couple of years. I’m still hoping Apple will have a streaming video and music bundle like Amazon has and offer a decent yearly subscription rate. I think that would do wonders for Apple’s revenue and it would be a steady amount. However, I’m not sure Wall Street will stop worrying over falling iPhone sales (if they continue). Analysts really seem to be hung up over that stuff. I believe revenue is revenue, no matter how Apple achieves it.

    Will Apple ever be able to escape quarterly doom and gloom like the FANG stocks always seem to avoid? Probably not, but maybe Apple shareholders will eventually get lucky.

  3. Apple has made so many long term execs multi millionaires mainly by holding or have warrants on one stock: AAPL… if you owned 1000 shares in 2008 your basis was $11,100, now worth $176,000…. I have held my entire retirement solely in Apple since 2003, am now retired

    1. At the bottom in 2008, 1000shs were worth $85,000. Now you would have 7000shs worth over $1.25M, not to mention all the dividends you’d been collecting.

    2. Quite a lot of my AAPL was sold in September 2012 to buy the house which I now live in mortgage-free. Those shares gained in value eleven-fold during the time I held them and what started out as a modest investment made the difference between buying a rather small house with a mortgage and owning outright the sort of house which I really wanted.

      Fortunately I’ve been able to build up my holding of AAPL since then and while I don’t expect to again make gains of that magnitude, I have enjoyed pretty good growth and of course received decent dividends too.

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