Apple may not give you the returns that is has in the past but there is still value in the price it is at now. The price for apple compared to its intrinsic value makes it the cheapest tech stock I see and understand. It may well be one of the cheapest good companies in the S&P 500 universe as well. Its business at the same time is also making a profound switch. Apple is busy shifting its focus from selling iPhones to more of a software based company. Being that it already owns a horse in the hardware race I think investors will look back in five years and see how big of an improvement to their business it will be that they develop software services.
http://www.funnyonlinepictures.com/wp-content/uploads/2013/08/Apple-Juice-Funny-Online-Pictures.bmp
The App store is a good example of how Apple executives are steering the ship well. The App store is one of apples best ways of get incrementally growing revenue. It is starting at a base of 12 billion dollars right now. This is when apple shows the real value to investors as Warren Buffett and Apple buy up all the stock they can. Also one of my more favorite value investors named Joel Greenblatt has bought in the past quarter as well. Greenblatt is more of a quantitative based investor where as Warren Buffett I would describe as a qualitative investor. Since they both come from to different directions but the same conclusion it is a boost of confidence in my opinion.
If you are looking at this stock on a Price to Earnings multiple or P/E you would be valuing this company wrong. This company you must look at the discounted cash flow or DCF and the market cap over the enterprise value to really find what Apple is worth. The discounted cash flow of this company is very positive sitting at a price of 294 dollars for fair value based off of how much cash they are generating. Meanwhile if you were to put the the market cap over the enterprise value you would be buying this company at a cheaper price than if it were to sell its self off in the private market. That means it is CHEAP.
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All this being said I think you could buy Apple in the next few months maybe for a cheaper price than now. If you are long term investor and bought now though it would not be the end of the world by any means. The price will fluctuate and the traders will get out of their positions giving the patient investor a good buy price. This company will slowly grow and may very well be the first trillion dollar market cap company. It is certainly my pick out of the FAANG stocks on which one will hit 1 trillion first.
Best site for investing: https://www.gurufocus.com/new_index/
Best site for charting: https://www.tradingview.com/
Terms: Enterprise Value https://www.investopedia.com/terms/e/enterprisevalue.asp
Discounted Cash Flow https://www.investopedia.com/terms/d/dcf.asp
As always this is not financial advise nor is it presented that way. The information provided in this blog post and any other posts that I make and any accompanying material is for informational purposes only. It should not be considered financial or investment advice of any kind. One should consult with a financial or investment professional to determine what may be best for your individual needs.
Adios Amoebas, it is time for me to ride off into the sunset
