Should You Catch a Falling Apple? — Forbes

 

Here’s my review of Apple Inc. (AAPL) from the November 20, 2018 Forbes article Should You Catch a Falling Apple? These Five Value Experts Think So:

 

I’m bringing Apple back into the fold, adding the stock to my “Buy Low Opportunities” model portfolio. This is the kind of stock that I would personally add to during market corrections, or simply when negative market sentiment pushes the share price down. And guess what? Both of those situations are occurring right now. Ding! Ding! Ding! It’s time to buy. 

Apple’s recent fourth-quarter earnings report brought the unsettling news that the company is going to stop reporting quarterly iPhone sales volume.

CEO Tim Cook thought that investors were too focused on that number, missing the forest for the trees, and I wholeheartedly agree with him.

I personally thought the market’s fixation on sales volume was a rookie mistake, when average selling prices (ASPs) and Apple Services revenue (Apple Pay, iCloud, AppleCare and the App Store) seemed to be far more relevant numbers with which to assess quarterly successes.

Analysts are currently expecting 2019 EPS to rise 14.3%. That number will invariably be tweaked in the coming weeks. I’m not expecting a rapid rebound in the share price, and we could easily see the stock bounce at $195 a few times before it begins to recover. But all in all, I like the current price, and I’m certainly willing to wait a few short months for the rebound toward $230 per share.

Meanwhile, investors should remember Apple’s $100 billion share repurchase authorization that they announced in May 2018. I’m relatively certain that Tim Cook and Apple management see the same buying opportunity that you and I are staring at today. I rate the stock a Strong Buy for growth & income investors.

 

Send questions and comments to research@goodfellowllc.com or Crista@CabotWealth.com. 

 

Happy investing!

 

Crista Huff

President

Goodfellow LLC

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