Apple Stock Still Undervalued

Discussion in 'Stock Market Forum' started by Rainman, Oct 29, 2015.

  1. Rainman

    Rainman Senior Investor

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    This should be some good news for anyone who wants to make some money from the world's most valuable brands. Since Apple's stock is still undervalued if you buy and hold you'd make a killing a couple of years from now. Earlier in May Carl Icahn said Apple stock should be trading at $240. He isn't the only one who thinks so. Other "experts" believe that Apple stock should be trading at $140 or more . . .

    http://www.marketwatch.com/story/apples-stock-looks-way-undervalued-2015-10-28
    Apple Inc.’s stock surged Wednesday after the technology giant beat profit expectations, but it still looks way undervalued relative to earnings-per-share growth.
     
  2. pwarbi

    pwarbi Senior Investor

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    While I do think that the Apple share is undervalued, I'm not sure that will make people want to all of a sudden go out and start investing in the company.

    The technology sector isn't a stable market in my opinion, and it makes me wonder with so many expert investor's around, why they're undervalued in the first place?
     
  3. baudwalk

    baudwalk Senior Investor

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    Apple's PER is a reasonable ~13, but appears to be facing headwinds with some the smaller niches within the company. Apple TV, Aople Music, Watch, and Aople Car are still open for discussion, and **** sales seemingly are being somewhat cannibalized by the larger ******s (e.g. 6s Plus). On the positive side Apple enjoys a high product refresh rate and and 2-year trade up plans are coming to an end. In the shorter term, some analysts suggest that the Chinese domestic consumer market is the next significant ****** market expansion (despite the low-cost Chinese entries into the phone market). Apple clearly isn't going anywhere, nor is it in any peril of losing its lofty perch in the world of technology. I could see a slight decrease in the rate of increase of the firm's growth and profits should the global economy stagnate, but that's of little consequence.

    While I would never go against Uncle Carl and his $240 target -- I haven't seen his timeline -- in the shorter term into 2016 I expect the share price to climb back into the $120's or perhaps the low $130's.

    If the next election could bring about repatriation of foreign earnings without the current onerous tax provisions, I believe such a move could be quite beneficial to us shsreholders.

    Giddy up.
     
  4. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I remember the good old days a few years ago before Apple split, when the stock would move up or down (usually up) 5-10% or more around earnings or other news.
     
  5. baudwalk

    baudwalk Senior Investor

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    Arrgh. The board's software logic still traps the trademark "i" named-products and stuffs in many "*" above. Super-silly... :)
     
  6. kgord

    kgord Senior Investor

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    Well I think that there is something to be said about buying Apple stock, but how do we know that Apple products are still going to continue to be the wave of the future? I am not really sure that Apple has the market share and the popularity that it used to have. I mean, they seem to make a lot of gimmicky products..the **** being the exception to this rule.
     
  7. crimsonghost747

    crimsonghost747 Senior Investor

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    I do think that apple is starting to be priced pretty well. P/E of 13 is surprisingly low for them and I'll admit that I have thought about it. But... I'm not too high on tech stocks so I've skipped on apple for now and will probably do so in the future too.
     
  8. WaveWage

    WaveWage Well-Known Member

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    Maybe some finds this approach wrong, but I would rather think with capitalization rather than earnings per share. And currently, capitalization of Apple is already too much high. Currently, it is valued above $600 million. That feels a bit absurd, I know this company is profitable but I'm not sure they can sustain their business model enough to ever win that amount of money. If it suddenly gone to $240/share, that would make the capitalization fully absurd, not only a bit, given how Apple isn't diversified and how it can struggle with the marketing without Steve Jobs. That leads me to think the shares are "high" enough.
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    It's still cheap, and 30 years ago you had companies like GM and Exxon eclipsing the half trillion mark. Which is not to say that it will definitely keep growing, but that it's not necessarily a given that they won't get even bigger sometime in the future.
     
  10. baudwalk

    baudwalk Senior Investor

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