Trade: Apple (AAPL)
On Friday, I put in a purchase for about half of my maximum potential position in the stock of Apple at $152.25. At the time of this writing it is 5.7% of my portfolio. While I haven't had time to discuss my shopping list of new potential buys, the sale of my position of On Semiconductors left an opening for me to pick up a new tech name. On my list I had Alphabet (Google) and Logitech as other potential picks. It just so happens that AAPL's stock price came down into the area where I would start accumulating a position first. Alphabet is just too expensive for me to work with - even in options, and while Logitech was close, I don't see the growth potential nearly as strong as it is with Apple today.
The stock pulled back over $10 since the showcasing of their new phones the iPhone 8 and iPhone X. Reception has been somewhat lukewarm and there has been a lot of rumors about bugs and delays in delivery. The problem is that this is an ongoing story every year with every new release. Not enough demand, not as good as people hoped, etc. yet the company continues to blow away numbers. Personally, I hate Apple's products. It's hard for me to fathom buying this stock, but I have to face the facts. I know so many people who have the iPhone and it's never a matter of IF they'll upgrade, just a matter of WHEN. They stay in the ecosystem, they use iTunes, they have subscriptions for various things. And they're so brainwashed that you could give them a rock with the Apple logo on it and they'd still pay hundreds for it. It's become a sad societal norm, you might as well say. But it's for that reason I'm investing int he company. as the iPhone X gets released, i expect big numbers to follow. The company is also continuing to make the iWatch more normalized while also pitching it as something you wear to monitor your health. People are going with this and I want to profit from it.
Finally, you add into this backing of Warren Buffet, who sees this more as a consumer goods stock than a tech stock and you know this company has longevity with it. Let the price come in, I'll just buy some more. Right now, my next price point is under $150 as long as there isn't other major events pushing the market down harder, overall. The stock is currently trading at 16.7 times this year's analyst earnings estimates and 14 times next year's estimates. Meanwhile earnings are growing at a rate of 11 times over the last 5 years. I believe a multiple of 18 is fair for a consumer goods company with the dividend and earnings stream this company has. It's nowhere near as volatile and risky as a tech stock in those terms. I'm going to go conservative and say that the company only earns $10 next year. With the multiple I've called, that leaves a price target of $180.
Notes:
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash. Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.
The stock pulled back over $10 since the showcasing of their new phones the iPhone 8 and iPhone X. Reception has been somewhat lukewarm and there has been a lot of rumors about bugs and delays in delivery. The problem is that this is an ongoing story every year with every new release. Not enough demand, not as good as people hoped, etc. yet the company continues to blow away numbers. Personally, I hate Apple's products. It's hard for me to fathom buying this stock, but I have to face the facts. I know so many people who have the iPhone and it's never a matter of IF they'll upgrade, just a matter of WHEN. They stay in the ecosystem, they use iTunes, they have subscriptions for various things. And they're so brainwashed that you could give them a rock with the Apple logo on it and they'd still pay hundreds for it. It's become a sad societal norm, you might as well say. But it's for that reason I'm investing int he company. as the iPhone X gets released, i expect big numbers to follow. The company is also continuing to make the iWatch more normalized while also pitching it as something you wear to monitor your health. People are going with this and I want to profit from it.
Finally, you add into this backing of Warren Buffet, who sees this more as a consumer goods stock than a tech stock and you know this company has longevity with it. Let the price come in, I'll just buy some more. Right now, my next price point is under $150 as long as there isn't other major events pushing the market down harder, overall. The stock is currently trading at 16.7 times this year's analyst earnings estimates and 14 times next year's estimates. Meanwhile earnings are growing at a rate of 11 times over the last 5 years. I believe a multiple of 18 is fair for a consumer goods company with the dividend and earnings stream this company has. It's nowhere near as volatile and risky as a tech stock in those terms. I'm going to go conservative and say that the company only earns $10 next year. With the multiple I've called, that leaves a price target of $180.
Notes:
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash. Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.
Nothing on this site should be taken as advice, research, or an invitation to buy or sell any securities. All views expressed are solely of my own and I am not a professional money manager. Please consult with your financial adviser before taking any action in your own portfolio.
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