Is there a reason NOT to buy Apple Stock? I sure can't think of one.
 

I just did some analysis on Apple Stock over the last three years from 04-07 and they have one of the best stock records I have looked at to date:

-There annualized earning/shares growth from 04-07 is 121.7%
-They have sales growth to match the earning/shares growth numbers.
-The quarter compared to the same quarter for the previous year growth in Dec, Mar, June, Sep is 132.9%, 143.6%, 125.5%, 98% from 04-07
-They are very cash rich earning 4-5 dollars/shares
-They have NO long term debt.
-The have no definable pension plan.
-There growth rate to P.E. is 3:1 which makes it an outstanding buy even at 172 dollars/shares.
-I visited a store in the Burlington mall in MA and it is completely loaded.

From what I can see there are no negatives. So can anyone think why I shouldn't buy the stock? Or do you thinks it's a good buy based on the data?
What are the stores like in your neck of the woods?

Apple has been a great buy for the last two years. And most analysts are pegging it for $200 by years end. Nothing short of some major scandal will stop that from happening, is my guess. So if it was me I would do this:

First, buy the stock, I think that's a great idea. Second, watch, very closely, the current legal battles between Apple and the various EU nations that are going after the locked iPhone and the iTMS. If the battles look like their going badly, you might concider just holding the stock until spring. Otherwise, just hold it until some other scandal pops up (or, obviously, they start looking bad on paper).

I have a friend who bought Apple back at $120 (on my advice, he still owes me), and he's made out like a bandit on it so far. I just told you our general consensus...so, take it for what it's worth. Good luck.

Well if Apple wants to hit 10 millions iphone sales, they better find a way to work with the EU although this may be difficult. But these kinds of lawsuits take years to settle. In the meantime, Apple will be rolling in the $$$.

If I recall correctly, Apple forecasted the sale of 10 million iphones by 3rd 08. They have sold 1 million iphones by 9/07 in a 2 month period. I think this is ahead of their schedule. England, France, Germany will be a big part of these sales so you are correct that the EU dispute may be a negative for Apple. However, I don't think it enough to stay away from purchasing Apple Shares.

In addition, lowering the price of the phones by $200 will help to sale more of them around the difficult Christmas season this year.

Even at 10 million sales of iphone along, they will generate roughly 2-4 billion dollars over 4 quarters, 75% of that will be in 08 along for 1.5-6 billion dollars. Add this up with an increase in computer market shares and a dominance in the ipod market and I think that Apple is looking at a super year in 08.

I do to, for the most part. And I don't disagree with your analysis. There's no reason that 2008, or even 2009 shouldn't be a great year.

Just don't forget the role of perception in stocks. People don't buy stocks because they like the current price, they buy it because they assume that price is going to go up. If something happens to Apple that destroys that perception (i.e., losing the legal battles in Europe), it could severely effect stock prices. Not to say Apple won't continue to go up, it just might not go up as fast.

My only real point is that you need to keep an eye on it. I still think Apple is a stock worth buying, but I worry about Apple's pigheaded attitude towards the lawsuits in Europe. What happens if those concerns hop over to America and gain some traction? Look at what happened to Microsoft after all their legal battles. It might not be a direct connection, but their products all went downhill and their public perception fell into the toilet. Apple lives on the positive perception of it's customers, if that were lost... There are, in fact, better MP3 players than the iPod, I'm sure people would find them...

Thought you might be interested in this article. Sounds like it's still "buy buy buy" as Jim Cramer would say...

Apple Stores Exert Gravitational Pull

The huge cash-on-hand and lack of debt are more important factors than a lot of folks realize. They provide a safety net which could protect the company from unfortunate circumstances. In addition, the growth they're seeing in computer sales and market share is strong.

I don't know that it'll hit $200 before year-end, but I'd bet it will by the time Steve finishes the keynote at MWSF in January. Fine with me - the Apple shares I hold, I bought for $22 each, adjusted for splits.

But to answer the question - there is a reason NOT to buy Apple Stock. If you have credit card debt, you'd still very likely do better by paying it off than by buying stock. Also, if you can get matching funds by contributing to your 401k at your employer, that's likely to be a better place for your money.

Buy Low Sell High ;)

Ok, you must be some kind of financial planner.:) This would be a very good reason not to buy Apple stock. I would take 100% returns any day. Unfortunately, the company I started with doesn't match the 401K until you have been there one year. So all of my investing is done through the 401K that I have rolled over into an IRA from my previous employers.

Assuming that you have $$$ to invest and not mired in debt, it hard to think of a reason not to invest in their stock. The only question that I have on this is there a way to measure the break points of the company stock price?

It's a good story. Although I haven't done the analysis yet, it would be interesting based on the observation to see how much $$$ they would generate at the rate they are selling their products to the consumers.

Would it be a good reason to NOT buy Apple Stock if we enter into a bear market and all the stocks start turning down and choosing up all the companies along the way?

There are lots of reasons not to buy Apple stock, but it all depends on what you're looking for.

The thing to remember always is that the price of any stock is a reflection of mob psychology and may or may not have anything to do with the fundamentals of the company.

If you're considering short-term (<1-2 years), you've got to consider the risks of a general economic decline/slowdown clobbering the stock even thought the company is pretty sound.

If you're considering mid term (>3-5 years), sure, it's probably a good buy (unless Jobs decides to leave anytime soon), and you probably oughta be dollar cost averaging all the time, anyway.

If you're considering long term (>5 years), there are probably many other stocks (mainly low & mid caps) which will increase in share price on a percentage basis greater than Apple or (mainly dividend paying mid & large caps) which will provide greater overall return than Apple.

Some reasons to be wary:
1. Trying to get in at the bottom in volatile markets is likely to be a losing proposition any way you look at it.
2. Even though Jobs didn't go to jail and they claim they "fixed" things, the stock option issue shows that the company plays close to the edges in the "corporate governance" area. They did not replace the board that allowed this to go on. Next time something quasi-shady turns up could cause the stock to drop by over 50% overnight.
3. So far, Apple has only been a relatively minor irritant to the other big boys in the industry. If they decide that Apple is getting too big too fast, they can do lots of things to severely slow Apple's growth potential, e.g., serious and consistent head-to-head competition in areas they are only half-heartedly in now. After all, Apple is only strong in various niches it has carved out that nobody else has even tried to compete seriously in.

One other thing that's a very good general rule about buying stock - - Don't ever buy a stock to which you have an emotional attachment. It becomes easy to slant analyses to conform to your emotions. Take a look at the third point in the original post. From those figures, one could just as easily state that the growth rate has consistently decreased by ~20% per year over the past three years.

We're holding what we originally bought at $46. I keep thinking about buying more, but the damage that's been done to the US dollar and economy has me worried. I'm thinking that holding metals (physically) might be a safer bet.

I bought fairly low, too. Unless the stuff really, really hits the fan, I doubt it's going down low enough that we'll actually lose money.:D As far as buying more at current levels, I wish I knew the right answer, but I've decided not to and am opting to diversify rather than to narrow the portfolio. Time will tell if that was the right move.

There is no reason to doubt that the powers that be (independent of party) will inflate their way out of deficits/debt. The problem I have with precious metals is that a large fraction (how much I don't know - maybe a third, or more now?) of their price is attributable to a "speculative" or "fear" premium, rather than actual intrinsic worth, and a lot of things could cause their prices to crash, e.g., when the Soviets invaded Afghanistan, gold went from ~300 to 850 virtually overnight, then dropped back to <300 within a year and stayed at those levels for years after.

I would expect if/when we ever get a non-war-mongering administration (although that's looking doubtful, considering how the leading candidates are talking), prices of gold/silver will fall back to more reasonable values.

The lack of a functioning crystal ball is wreaking havoc with my peace of mind in the investment field.

Good point on the metals speculation, but I think right now we are at a "normal" price. Also there are metals besides gold that have slightly less general consumer interest and should be more stable, such as platinum.

Indeed. In the past I've been only a day-trader because I can't stomach the long-term risk. I've done well at it. Apple is the only one I've held for any length of time.

You're probably correct there. I need to look into that. Do you have any specific insights/experience in that area that you'd care to share?

You're one of the few skillful/fortunate ones, then. I did it for a while, and found that the taxes and commissions ate up virtually all of the profits. Plus, it's a daily tension my blood pressure would rather do without.

My philosophy now is "buy and hold forever". That's one of the reasons why I'm sorta down on Apple and other non-dividend-paying stocks. Without dividends, one has all the eggs in one (market psychology) basket and years of gains can be wiped out overnight. At least with dividends, one always has some returned value over time, no matter what the stock actually does.

Because their accountants suck?

I recently received a $199 rebate on a $149 iPod Nano. :D

I'm no expert, so I hesitate to say anything more than I think it's a very good idea to research things like platinum. My research leads me to believe that things with intrinsic value, limited availability, and an industrial use will always rise in cost (relative to the weakening dollar). I've never heard of any losses with metals other than gold, and the losses there were related to a panic and artificial confidence (much like our current stock market value).

I bought stock in the companies making products I really liked and used myself. Dish Network, Apple, Cisco, US Robotics, and many others like them. My only skill was seeing a good/unique product and investing in it. Other than Cisco I didn't literally day trade, but trading once a week is still called day trading by most people.

I recently shifted my monthly auto-investment so that more than 50% is in international index funds. The most dramatic growth these days seems to be in India, China, and Africa, not the USA.

Apple stock...I wish I had more faith a few years ago! Now might be a little late for substantial gains at this price, but I'm not basing that on strict analysis, just seat of the pants. I could be wrong...again...

I also have a mutual fund that invest in Brazil, Russia, India, and China. I think this is smart since the olympics will be in China in 2008 and the World Soccer Games will be in Brazil in 2009. So definitely having some money in this location is smart. 50% is a little to much for my taste since I really don't have a feel for any of these foreign companies. At any rate, I do dollar cost averaging because of high risk associated with investing in these regions. I prefer to invest in companies that I understand. Where I use the products I like and where I see growth.

You can still have faith in the company and it's not too late. They have outstanding products with an outstanding balance sheet to match. You could wait for the December earnings to come out and see if that sways you one way are the other but the train is continuing to move to higher grounds which will eventually put you out of reach.

I am betting that Apple will reach another all time high sometime next year of which there will be a serious volume accumulation that will drive the price higher particularly if you consider the growth potential of the company over the next 3 to 5 years. For example, if they do to the cell phone industry what they have done with the Ipod and they gain computer market share at the same time, it's very difficult to see how your $$$ could fail with Apple. Oh yes, they better give Mr. Jobs whatever he wants in the process since he is probably one of the very best CEO's out there today.

Most people look at the price of the stock and get freak out about purchasing shares. What's more important than the price is the growth of the company and as you can see from my 1st post, Apple isn't slowing down. Another indicator to increase your faith is to view the insider holdings in the company of the executives and see if they are buying, holding, or selling their shares.

The only thing that puzzles me in why do they have significantly less growth in the 4th quarter of Dec?

OK now that is a good thought and reminder. The cell phone market is a great opportunity for untapped growth if Apple produces downmarket variations of the iPhone while simultaneously pushing the flagship iPhone up the feature ladder. In other words doing what they did with the iPod.

Yes, dollar cost averaging is the way to go. That is why I do auto-investment. Same amount of money buys more shares when they're cheaper and less shares when they're expensive, without lifting a finger.

Ok, more good news. Apple just closed at an all time high of $194.30/share and they are poised to take more shares from Dell and HP.

http://www.investors.com/editorial/I...issue=20071207

I am looking forward to the quarterly reports at the end of December. It should be interesting.

If Apple keeps going up like it has been most of this week, it looks like they'll break $200 in a couple days... So, baring profit taking, Apple should look good for the next little while.

It reached a high again today of 196.83 but closed near the low of 187.39 which tells me people are selling off the shares but the selling doesn't appear to be drastic. In fact the last couple of days have been a sell off for the shares. Sell off is normal during this time of year as people take cash to buy lexus, rolex, houses, gifts and such for the holiday season.

Whether Apple Stock hits $200.00/shares depends greatly on how the overall market performs. So if the market rebounds, so will Apple Stock.

I have faith that both the overall market and Apple Stock will do well in the coming months ahead.

It traded above $200.00 today for the first time in its history:) even though it closed at 198.95. I'm still awaiting the 1qtr08 in which they are expected to earn $1.57/share which is a 37% increase in the same qtr last year.

http://biz.yahoo.com/ap/071226/apple_mover.html?.v=7

...today I can think of a reason buying at $200 would be a bad idea

Apple beats estimates of $1.57/share
 

First Quarter results for Apple is muted with free fall in the global markets.

With the general market in a sell off, it would be difficult for Apple to rise in this environment even though they beat the analysts' estimates. They earned $1.76/share which breaks a new record for them; same quarter last year they earned $1.14/share. So this is a 54% increase over last quarter.

Next quarter will be lower than this quarter because it doesn't include December and all the holiday intoxication is wearing off.

Now is NOT a good time to buy but the time to buy will be when the general market turns positives and Apple is on the upswing again. Keep in mind, with Apple's growth, they will be one of the 1st companies to strongly rebound when the bull market returns.

So if you can't stomach the loss or drop in profit, sell your lot and jump back in when the overall general market turns around. It's hard to say when that will occur. But when it does, will you be ready?

I have a stock trader friend who always tells me "buy on weakness, sell on strength." To him this would be the perfect time to buy, and if it went lower, he would probably buy again.

Financially speaking, nothing has changed about Apple. As roncross just mentioned, it's really the global market that's doing this. So...unless the market crashes this might (might) be a great time to buy. But honestly, the 18 point drop I see today is enough to scare me off, I was thinking of buying yesterday...but I think I'm going to want to see some amount of stability before dipping my hand it.

Wow! Horrible day for Apple, despite the earnings Ron mentioned above. Down almost 15% at the time of this posting, and over 30% this month alone. The overall market has been down around 10%, which is awful for one month, but Apple has been hit harder than most. Lots of selling off and protecting profits, I'd guess, but also some negativity about their projected earnings.

Hold!

What I don't entirely understand is that Apple routinely projects their earnings to be lower than WallStreets expectations, and people routinely ignore that.

But hey, bear markets tend to smack around tech stocks. Just take a look at Google, not quite as dramatic, but the same basic idea. Basic goods should be up though, I checked some construction and metal stocks earlier, and they've been trending upwards.

Could be a good time to buy? :) I'm no financial analyst, but Morningstar rates Apple's fair market value at $160.00. It closed at $139.07 today.

What I've done through the years is let it go up around 25% or so, then sell off the proft and re-invest in something different (bond ETFs like SHY or TLT these days). That locks in your profits and leaves a core amount to go on earning -- or not. I was close to that 25% in early January but am below my investment now. It'll come back up, I'm sure.

If you really think it will come back you might as well buy again now. That way if you bought 10 shares at 190, then 10 shares at 130, you would have 20 shares at a price of 160. So you can make some more money that way. But you'd need to be sure they are going to come back...

Personally, I want to wait until it starts to stabilize. A lot of that major analysts still have Apple targeted at 200+, but, analysts have been wrong before. If it starts up again...who knows.

I would wait until the market is more positive.
 

There is something wrong with more than half of these analysts. Most of them are strictly technical without understanding the companies whose shares they are buying. Others are completely emotional about the company and forget the fundamentals of the company and what drives earnings and stocks to increase.

As we all know it's hard to make a profit in todays market, Ok, I sold off at an 8% loss when I started to see it turn the other way. There were mainly two reasons for me selling the shares.

The first is because the overall market was looking bad very bad. It is very very difficult for any stock to withstand this kind of selloff. The second reason is that because at the time I bought, Apple's P/E was 43 which is very high for Apple. There P/E to date is now 30 which is line with their historical P/E value, although I would like to see their P/E drop another 10 points before buying into it again.

There are two very important things to remember when investing in stocks that could save you tons of $$$$. First, never ever short a stock with a high P/E, it could be disastrous.:( Second, a stock with a high P/E will fall much more rapidly if things start to go south. So in Apple's case, you are damn if you do and damn if you don't. High P/E stocks are less predictable with higher growth returns so if you get into trouble, it's better to sell.

I think if you are investing for the long term with Apple, you shouldn't really worry about these short term swings because they are temporary. We all know with Apple being cash rich, they are not going out of business anytime soon. They are a very competitive companies that is able to set new trends in their products.

With their $$$, they may start to acquire other companies because this is what cash rich companies do. So if you are able to invest in companies that Apple will acquire in the future, you could make some good $$$.

I will buy Apple Stock again but I will wait until the market reaffirms itself and people are willing to spend their $$$ on these products.

What should Apple do? It should close down the company and give the money back to the shareholders, that would be the right thing to do.

</Dell>

That's funny:) but Apple doesn't have enough $$$ to pay off all the share holders. Their market cap is 10 to 30 times more than the company is worth at least in my estimation. If Apple wants to really help reward the share holders, they would start buying back shares (not all of them) at these low prices and that would effectively increase the value of each share while strengthening up Apple position at the same time. They could use all their excess cash for this but I believe that they are on the hunt to acquire other companies with all their $$$. In todays markets, businesses come cheap.

If anyone is aware of which company Apple is likely to buy, they can invest in the other company and make instant profit on the news.

As of Feb. 20, here's the bad news:

AAPL is down 36.4% on the year
DELL is down 19%
MSFT is down 19.5%
NASDAQ is down 10.8%

So why has Apple fallen so much more significantly than two of its close competitors?

They built years of ever-increasing hype, so the stock price was based on all the assumptions that they'd continue to produce ground-breaking products. The last announcements were good products, but nothing more than evolution of existing products. The analysts fell out of love. "What have you done for me...lately?"

Your answer is in the P/E.
 

On the contrary, this is excellent news, I hoping that it falls further.:) You can buy more of Apple stock at a cheaper price than you would have paid for it 3 months ago. Apple is still the same company with great products and still has positive earnings so you shouldn't feel concerned about buying more at a lower price.

Both Dell, MSFT and HP have a P/E under 18 so they are not likely to drop as fast as Apple given the same earnings. Calvarez is correct that the others companies were not riding on a high horse so those stocks didn't fall as much. Apple's P/E is now 26 which is where it has traded in 2005 but still higher than the other companies in its class. In this market there is no way that AAPL could sustain those high prices.

If the overall market continue to be a challenge, look for AAPL stock to fall to a level that would be in line with the P/E of the other companies. This would truly be a reason to load up on their stock and wait for the elevator ride up.

What ever you do, don't short AAPL stock because you never know when a rally is around the corner.

It wasn't all that many years (maybe 45) ago when a P/E in the range of 8 to 10 was the norm for a successful company. Over the last few decades, that expectation has slowly moved upward. Historically, a P/E of 26 is way too high.

My concern is the market is still artificially high. Interest rates have been forced down to very low levels (thank you government) and people need a place to make money with their savings. If inflation fears result in much higher interest rates, I would anticipate a flow of capital away from the market. If this happens, it may be a long time before AAPL fully recovers. That's fine if you' re in it for the long haul.

For sure, though, I wouldn't listen to me. I sold my last 100 shares of AAPL in the early 90s at $40 --- cubes had cracks or something like that --- and missed the big run up. No guts, no glory.

Yep, it's probably a good time to buy, although that might get even better. Apple has had good earnings and should continue to do so for some time. In the end, that's more predictive of the success of a stock than anything else.

"....it's time in the markets, not timing the markets...";)

Has anyone been watching the stock lately? Would you care to elaborate?

My opinion is that the market is going sideways and establishing a base to climb to new highs or to jump off the cliff.:confused: In other words, the markets are not doing much since the last several months.

I don't know if I stated this already but investors are concerned that we are going into a recession and they are not sure whether the fed can pull us out of this without creating inflationary pressures on the economy. Keep in mind that if the fed fails in his quest to ward off a recession, the consequences will be severe and harsh for the U.S.A and global economy.

If the feds can avoid a recession, then the market will rebound and we can possibly go to newer highs and all of this will go away. Ben (fed) will become a god of sorts and will receive the noble peace price.:D However, I think it's going to be tough because of the recent job market such as unemployment, sub-prime housing market, credit crisis, etc...

Haven't you noticed that it's very difficult for anyone with any real authority to say we are in a recession? If they admit this, the markets will react accordingly sending the markets to further lows.

From a historical perspective since 1948, every recession is sandwiched between a market top and a market bottom. So to put this into today's perspective, we've seen a market top in Oct of 07 and we've seen a low in Jan of 08. So if history repeats itself, we were already in a recession from Oct07 to Jan08 (which I doubt) or we will enter a recession and the markets will go to lower lows, even lower than Jan08! This explains why the fed is fighting this so hard because he's up against historical norm.

We live in interesting times. Inflation is around the corner, the recession is already here, the dollar is in free fall on the foreign exchanges and the market has the potential for a steep decline (all my opinion of course). My view is the market is being propped up by government policy, primarily artificially low interest rates and a demonstrated willingness by the feds to continue to support the market. Who knows where it will go from here.

There is an argument to be made that, historically, the market is still over priced and due a major adjustment. Only time will tell. Again, all my opinion.