Apple: Buy, Sell, Or Hold?
  • Dear FS Community,

    I've been building a sizable position in Apple since their 2Q results this year 2013. Their World Wide Developers Conference kicks on in San Francisco today June 10 and I'm expecting some upcoming product announcements. The last product announcement was November, 2012 so it's been a while.

    Despite all the frustration with Tim Cook's leadership abilities, he has mentioned new products in 2H13 and all of 2014. The stock is trading at around 11X expected earnings with a 2.7% dividend yield. Tech stocks and dividends don't seem to mesh very well (just look at Microsoft for 10 years), but I've got to believe there are a few more tricks up Apple's sleeve.

    What am I missing? Risk reward ratio seems very enticing in the low $400s.

    Regards,

    Sam
  • I feel like Apple is turning into a Microsoft, ever since Steve Jobs left. Even though it is a great company with great earnings and oodles of cash on hand, the market is now treating their stock to the 400 - 450 dollar range. Without some really big news this year, I see that trend continuing.
  • Jeremy, there definitely is a fear that Apple is now too big for its own britches.

    I'm happy to hold the shares in the sub $450 range with their new dividend and share buyback policy until they do announce some new innovations over the next 18 months.
  • Sam, AAPL is no longer growing revenues and earnings at double digit rates, this is and will be a great dividend growth stock going forward, however.

    Joe
  • I'm an avoid on Apple since the innovation is hard to predict going forward. Good business now, just not growing at the pace it used to. I see it becoming a Microsoft - good cash flow, no growth. The investment becomes more like a dividend play (but that's not happening yet either).
  • I guess I'm a true Apple fanatic because I was super excited about all of their announcements today, so I'm totally shocked and bummed the stock closed down. I can't wait for iOS7, especially for unlimited browser windows! I think the new Mac Pro they're coming out with is super cool too. I guess too many people's expectations were higher than what Apple announced today. I'm hoping for a rebound tomorrow!
  • Yeah, I agree with JAS's comment about Apple shifting from a growth stock. Unless they revolutionize something (TV?) like they did with the iPhone they are yesterday's news.
  • Count me on board with Apple being in a transition period. They'er transitioning from a growth stock to a dividend stock, but I dont think most investors realize (or want to accept) that just yet. It's not necessarily a bad thing, I think they can continue along the lines of an IBM where they churn out decent growth and steady, growing dividends. Just the days of explosive yoy growth may be in the past.
  • Dead money it looks like until a new hardware product comes out as Wall St. and consumers are fickle e.g. "What have you dont for me lately."

    Will just have to wait and see!
  • I just put in a limit order to sell. It had a good run up from just below $400, but it seems momentum is pushing it down no matter what.
  • This may be a misguided sentiment but I get the feeling this is going to be that point in the future where investors wish they had bought in.
  • Bought some at $395 few months ago and believe it will be within 320-520 area for the next few years. Plan to hold for long and eat some of their dividends. Reason why I bought it because of the low P/E, dividend rate, market cap and I been traveling around Asia and seems everyone either uses an iPhone or wants to get one, even in the developing countries.
  • Reply to @Guppy51: fingers crossed for the upcoming latest results! MSFT and Google shit the bed. Kinda ominous signs for Apple with still no new product to show for and it's almost August....
  • $AAPL doing well. I probably shouldn't have sold even though I locked in a gain...
  • I'm thinking about jumping back into Apple again. Still cheap compared to S&P 500, has a 2.2% dividend yield, going into holiday season, good 5S sales, new product rollouts w/ ipad Mini Retina, and the iPHone 6 with rumoured two larger screen sizes.

    The iPhone6 will be the blockbuster of all blockbusters imo. If they start selling pre Sept, that would be some huge upside surprise.

    Buy at $520 or lower and look for $600+ in 12 months I think. Thoughts?
  • Sounds like an interesting trade. If they can get the holiday season just right. I can see this working. The stock is a bit too rich for me to participate though. Looking for alternative trade ideas.

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