Is it time to buy Apple shares yet?

“Shares of Apple remain under heavy pressure, bobbing just above the recent lows,” Bret Kenwell writes for TheStreet. “We’ve seen big swoons in Apple before. The latest one started after the company reported earnings, telling Wall Street it will do away with reporting unit sales of its iPhone.”

“Does it matter? In reality, not really,” Kenwell writes. “Take a step back and look at the company we’re talking about here. Apple trades at 12.5 times this year’s earnings and despite its decision to remove unit sales from its reporting, is still expected to post pretty solid growth. Analysts expect almost 5% sales growth this year and 4% growth in 2019. Earnings expectations call for 12% growth in 2018 and 10% growth in 2019.”

“But let’s not forget about its titan of a balance sheet, $100 billion buyback plan (with another big buyback plan due up in April or May) and 1.8% dividend yield. Its Services unit is churning out $10 billion in sales per quarter now while year-over-year growth remains robust, north of 25%,” Kenwell writes. “Despite the swoons in the stock price, Apple will gobble up stock, Services revenue will continue higher and its business will grow stronger. That said, let’s look at the stock charts.”

Read more in the full article here.

MacDailyNews Take: You’ll not likely time the bottom perfectly, but…

When the lemmings, er… “analysts” start their upgrade parade, then you’ll know the bottom has been found.MacDailyNews, November 26, 2018

In fiscal year 2018, Apple’s revenue grew over $36 billion to $265.6 billion. For the current quarter, Apple has guided for revenue between $89 billion and $93 billion, a new all-time record. (That’s revenue of roughly $1 billion — with a B — per day.)

When analysts learn to see without the unit share blinders Apple has just removed, hopefully their eyes won’t pop out of their heads when they finally see those huge numbers and realize how very much more is to come.MacDailyNews, November 28, 2018

24 Comments

  1. Anybody predicting the bottom of the current stock market lump and advises buying hasn’t a clue. This could be the start of an international recession leading to depression. If so, Apple will bottom out way below where it is now. Stock market analysts that advise buying are just looking for suckers to buy up shares so the insiders can move their wealth into other less volatile assets like gold.

      1. Sure, there’s volatility in Gold too, but its value in a portfolio is that it classically moves contrary to the Market.

        Case in point, while the DJIA has shed over 10% over the past two months, Gold (IAU) is up roughly 2%.

    1. Stock buybacks are designed to buoy executive compensation, not to reward customers or small shareholders. Buybacks take outstanding stock off the market to that future stock options, a favorite compensation tool of crony capitalists, are worth proportionally more.

      Apple is trying to eliminate the need to be transparent to the market while executives stuff their pockets. Same as any other greedy corporation.

    2. Think long term. A higher EPS and possibly higher dividends for loyal shareholders. A few months drop in value don’t mean diddly. It’s happened before.

      Catching a falling knife is risky and maybe AAPL shouldn’t be thought of as a knife, but a potentially bouncing ball of Silly Putty.

  2. Apple keeps taking the hardest hits of all the major tech stocks. I’m not complaining, but nothing Apple has to offer is able to hold up the stock’s value. Cash, profits, low P/E, stock buybacks, a relatively high EPS, a decent dividend… all amounts to a wet noodle foundation of value. Facebook is leaking personal data all over the internet and is stronger than Apple. Microsoft appears to have a foundation of chrome vanadium steel in comparison to Apple. Apple is definitely being valued like a steel mill going out of business.

    I have faith Apple’s value will be going back up so I’m not really concerned. I’m just saying how Apple is Wall Street’s whipping boy. A 30% drop honestly seems a bit exaggerated for the lack of solid proof of Apple not selling enough iPhones. I simply wouldn’t think a long-term investor would dump stock for that reason.

  3. Facts:

    Apple has underperformed the market by 7% in the last one month
    Apple has underperformed the market by 8% in the last 6 months
    Apple has underperformed the market by 7% in the last 12 months
    Apple has outperformed the market by 20% in the last 24 months
    Apple has outperformed the market by 50% in the last 60 months.

    Apple is up 30% in last 2 years
    Apple is up 100% in last 5 years
    Apple is at about the same level it was in April

    Its good to keep things in perspective rather than be a victim of lemming negative rhetoric and be a part of it.

    Always make your minds up on basis of factual information folks … not the other way around .

    Panic is a self fulfilling prophecy..
    and all this negative/ bashing talk , the fuel thats being added to the fire!….constantly.
    (Shorts and the competition are absolutely loving this)

    Go ahead and keep shooting yourselves in your own foot.

    Or keep a rational perspective.

    1. The ‘rational perspective’ …

      … is that the threat of a 25% tariff with China is still in play, which creates Market risks and uncertainty, which the Market hates – – and results in stocks being sold off and prices dropping.

      As such, AAPL’s fundamentals aren’t likely to stabilize (or improve) until there’s clarity in resolution on the US-China tariff war.

      TL;DR: “No, now’s not yet the time”.

        1. My post is about the facts !

          Facts? Sure.
          Only problem is that the Market is forward-looking.

          Thus, the classical investors’ warning:
          “Past Performance is not indicative of future results”.

    2. As noted elsewhere, AAPL is now dragging the NASDAQ. Luxury brands typically underperform when the markets turn south. So keep updating your snapshot tracker as AAPL continues to slide. Another 2.5% down today.

      Lemming rhetoric has nothing to do with it. Wise investors are watching an incompetent administration screw up the economy with a unilateral trade war and feckless fiscal management. European investors are watching as Theresa May commits financial suicide on behalf of xenophobe Brits. And Apple users watch as Pipeline puts more effort into emoji than hardware and software product quality, value, and diversification. Feel free to cheerlead AAPL, but there is no reason for anyone to believe 2019 is going to be a happy new year financially. I did tell you so.

  4. Cook is too clueless to halt the slide. All he will do is run some discount sales when he discovers the overpriced Apple stuff didn’t sell as expected over the holiday quarter either. The pipeline is so clogged, don’t expect any exciting new stuff to get consumers revved up. Contrast this with other manufacturers. Automakers make Apple look slow … they seem to be able to pump out exciting new products every year bar none — even as sales go soft.

    Dec 20, 1:03 p.m. ET:
    * the Dow Jones Industrial Average was down 412.37 points, or 1.77 percent, at 22,911.29,
    * the S&P 500 was down 36.48 points, or 1.46 percent, at 2,470.48
    * the Nasdaq Composite was down 111.19 points, or 1.68 percent, at 6,525.64.

    AAPL is leading the decline, down over 2% today.

    The CBOE volatility index has hit its highest level since Feb 12.

    In an economy where many companies now use “permanent temp” employees to avoid paying benefits, corporations are sitting on tons of cash. Strangely, however, the holiday season hasn’t seen a boost in employment. According to the Labor Dept, the number of applications for jobless benefits rose this week to a seasonally adjusted 214,000. Factory activity has slowed to a 2.5 year low.

    To top it all off, there are indications of a slowdown in the shipping markets, which is disappointing during what is normally the strongest season for factory shipments.

    Perhaps the extreme righties here can explain why trickle down economics, with special tax breaks for corporations and the extreme rich while offering a pittance to the working classes, again didn’t work this time. We’ll wait for you to parrot the scapegoats the great orange baboon likes to blame…

    1. But wait, there’s MORE!

      Under the orange leadership of the most incompetent administration in US history since Harding, investors are so nervous about forthcoming trade disruptions and consumer killing tariffs that they have pulled out $US 27.6 billion from US markets over one week (Dec 5-12). (per BoA Merrill Lynch) That’s the second biggest investor outflow ever recorded.

      Trump’s response: he is taking a 2 week vacation. Also, he will be proud to allow funding to run out so this holiday season you may not be able to enjoy any national parks, national treasures like the Smithsonian or Statue of Liberty. Disruptions or complete standdown are possible for USPS, border security and law enforcement like ATF, veterans services,. Active duty troops will get IOUs to pay off their holiday spending instead of paychecks.

      What a shame that Americans selected such an ill-educated xenophobe to act as their national CEO. He’s taken 7.5 years of constant modest growth from his predecessor and killed it. Instead of reforms, citizens see a revolving door of cabinet officers and a reality show drama from the liar-in-chief and his fatass lie-a-thon spokesperson. What’s most important to clueless idiot now? A border wall that US taxpayers weren’t supposed to pay for per campaign promises, a Syrian retreat, and other tweety distractions will do nothing to reassure investors. They can plainly see that the current administration is both corrupt and doesn’t know what it is doing. Behind the scenes Trump continues to try to play corrupt games with FBI headquarters in order to personally profit from the building contracts, when he is not spending record times on his golf courses, with taxpayers paying for the historically bloated entourage to stay in his hotels. Un freaking believable. Where does the Secret Service find anyone stupid enough to take a bullet for this fool? Well it’s Trump’s economy now. First and Goeb are getting what they voted for. Everyone else, enjoy your shiny new record federal debts. Merry xmas. Surely a half-assed overpriced Mac Mini under the tree will assuage the pain of your investments tanking.

      I predict Apple and other “premier” luxury companies will host some aggressive sales in Q1-Q2 2019 in order to hit their own estimates. It certainly doesn’t help that Apple doesn’t have any modestly priced hardware to compete against much leaner and agile competition, nor any unbeatable performance flagships that can hold a high margin. Apple sells primarily non-essential fluff that savvy computer users can do without. Worst of all, dumbass Cook acts like he didn’t even see the predictable Trump malaise coming.

    1. And between 12/20 and 12/25, AAPL was down another 8%.

      Thus the saying “catch a falling knife”…

      Such as how AAPL is also down a total of 20 points (-12%) since MDN published “3 keys to spot a market bottom in Apple” on 7 Dec.

      Both are simply evidence of the Market trying to encourage small individual investors to buy – and start to to turn the curve – for their benefit.

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