Apple stock is at a 52-week low and could fall further, but it’s starting to look like a compelling buy for long-term investors, Daniel Foelber writes for The Motley Fool.
Daniel Foelber for The Motley Fool:
Arguably the most reasonable cause of the Apple stock decline is that its business is facing plenty of challenges heading into 2023. In hindsight, it’s clear to see that the pandemic brought forward a lot of demand for consumer electronics.
In fiscal 2021, Apple’s revenue rocketed 64.9% compared to fiscal 2020, while net income surged 33.2%. But when it reported its fourth-quarter and full-year fiscal results (for the period ended Sept. 24), revenue was only up 7.8% compared to fiscal 2021, and net income only increased 5.4%.
MacDailyNews Take: “Only.” Apple in 2022 posted a September quarter record revenue of $90.1 billion. Annual revenue was $394.3 billion and annual earnings per diluted share were $6.11, up 9 percent year over year.
In mid-August, when the stock was barely down on the year, it had a price-to-earnings (P/E) ratio of 28.8. But the sell-off has brought Apple’s P/E down to a much more attractive 20.6. Meanwhile, the S&P 500 has a P/E of 19.7… In sum, Apple stock deserved to fall, but now it’s at a point where it’s an attractive valuation for long-term investors.
Perhaps the least talked-about red flag for Apple is its rising debt position. Its total net long-term debt is now at an all-time high… In the past, Apple used its lush cash position to buy back its own stock at opportune times and reinvest in the business. This time around, it may be pressured to use free cash flow to pay down debt instead of buying back its own stock.
MacDailyNews Take: Only those who like excellent deals and long term profits should invest in Apple right now.
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The only bad thing about investing in Apple right now is the America is now a communist economy run by infantile narcissist sociopaths. This can cast a cloud over investments.
Said the Trump supporter. Why invest? You’re already loaded.
The Orange ex-Conman-in-chief is an infantile narcissist sociopath.
Kent…are you a little confused?
Kent has dyslexia, confuses his “e”s and “u”s.
Look, you have a Che poster on your wall. You love communism. That’s OK. As long as you are OK with starvation and mass murder. And in the new version, the leaders get to use crypto currency to rob the nation blind while being “virtuous” for supporting the Ukrainian Thomas Jefferson, who has just closed down all opposition newspapers and political parties.
Dude, you’re a whackadoodle!
maybe both the ex president and the current president both are infantile narcissist sociopaths. Why do team politics forgo basic common sense and truth for allegiance to a political party; Why choose power/corruption over the truth ? Be American first! Dont hide the truth about our leaders for political advantage.
Because only one party currently supports the Constitution.
And the other sees it as a fluid document that is to be adjusted/resisted according to their preferred paradigm.
GFY
This guy knows absolutely friggin nothing about debt. Apple’s debt, especially issued previous 2 years, was almost free money. It was issued at under 3 percent via bonds. Why in the hell would you use cash to pay under 3% debt when Apple could theiretically buy the US 10 year at 3.7 percent? Apple would literally be getting Peter to pay Paul while Peter slipped them a free .75 of a point. The problem is the guy in the article looks at numbers on a chart, he doesn’t take time to understand.
Apple has a huge amount of cash overseas, I believe 100B. It cannot be repatriated without being taxed again by the US. So it stays overseas in the mostly lousy return foreign gov treasuries. So they borrow against that money at low rates to fund various corporate ops. The US puts up a foreign earnings tax holiday every handful or so of years. Apple and a thousand other US companies will bring that money back at that time.
The US credits foreign taxes paid. They would pay only any difference. No? Asking, not telling.
correct