Posted By RichC on April 29, 2016
It has been a rough couple of days for Apple ($AAPL) shareholders as growth this past quarter was elusive. Most blame the global economy, and in particular China, for the weak quarterly numbers. It does remind me of late 2012 and 2013 when analysts questioned whether management had lost their way. The same is happening today in “questioning whether innovation has stagnated” … I would not bet against Apple.
While iPhone sales continues to dominate Apple’s growth, there are still a few future bright spots which hold potential for innovation, at least in my imagination: the Media Center/TV, automotive interface (or an actual car?) and robotics. In my opinion, they all need the Apple touch. Personally, I think there is still plenty of room for innovation and growth … and I’m not even touching on using their hoard of cash to make acquisitions.
Growth aside, Apple’s PE is a low 10-11 and they now have a 2% dividend (and rising). This all looks pretty good if you care to transition from growth to value stocks at some point. As Carl Icahn exits his positions, there will sure to be others seeing $AAPL as a good buy … if not for growth, then as a value play. Personally I think Apple still has upside growth potential like no other blue chip. My thought is to buy in the low 90s, collect the 2% dividend while CDs, bonds and money market interest pay almost zero and I doubt you’ll be disappointed down the road. (but then Icahn disagrees – watch the Thursday CNBC interview below)