AAPL: No Need for a Knee Jerk Reaction

As I write this, AAPL is down 2.7%. I am long AAPL (5.7%). I have been following it closely since I purchased it for the second time on 9/15/16. It is up about 52% during that time. Although it has under performed my average holding, it has about doubled the total market index (VTI).

My thesis is that the smartphone upgrade cycle and expanding services would strengthen APPL over the last year and through the next two quarters, at least. So how’s my thesis working out?

AAPL said they were committed to avoiding the bottlenecks in manufacturing, and are believed to have sold 30-35 MM phones this quarter (a bit better than 25-30 MM estimates) per TMF article below:

AAPL’s high margin services are growing at a blistering pace: now $8.5B compared to $6.3B last year (+34%):

Several important reviews of smartphones place iPhone 8 Plus at the top of the pack:

iPhone 8 Plus is PC Magazine’s Editor’s Choice

CNET Review of iPhone 8 Plus gives 8.5 stars

Also, APPL’s recent $390M supplier award to Finisar is hard evidence that business is GOOD

My conclusions:

  1. Services are growing at a blistering pace.
  2. iPhone X sales exceeded estimates for it’s initial release.
  3. The product mix may be shifting towards iPhone 8. I bought an iPhone 8 Plus last week because I think it is a better value.

My guess is that the combination of the iPhone 8 Plus/iPhone X/services revenue will be strong, though the iPhone X forward estimates may be slightly lower. It’s easy to hear a potential slow down in iPhone X sales and forget that iPhone 8 sales may be off the charts. My guess is that the AAPL revenue will be strong for at least the next two quarters when the iPhone 8 volumes get factored in. IMO there is no need for a knee jerk reaction by the market. I think AAPL will be a market beater for at least two more quarters.




I think it’s a good buying opportunity for Skyworks, Micron, and probably some other chip companies I haven’t looked at today yet.

Bul…year after year, month after month, day after day, there is always someone spouting off about AAPL and yet they seem to defy the market over a period of time. Along with Amazon, BRK-B, JNJ, LMT,O, I don’t even bother looking anymore. Well, perhaps once a week"-)))
Getting conservative in my old age…couldn’t resist AT&T at $33.00 per share(nice income)and added to my dividend portfolio.

and still holding on to sq,shop,anet,nvda,afx,baba and druggy stocks IIPR and recently VFFIF. I trade Riot(very dangerous but up 45% since OCT)and day trade GBPUSD=X(prosperous)

Sold LGIH at $69.00( big mistake, going to $80.00 perhaps more)and FMI, possibly too early as take over on the cards.

I have to thank this board for teaching me more discipline and patience and not to run for the hills when things don’t “apparently” go to plan. Life doesn’t go to plan. Needed some cash for something else so sold all of my LGIH…not clever…and so I will learn from this. Should have taken some margin and not sold a winning stock with at least 2 more quarters of very decent growth…lets see if I have a chance to get back in at a decent price, but I doubt it…so move on. Don’t look back…

Cheers to us all for a great 2018.

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I have toyed with buying AAPL on and off for a while. I an bad economy, when everything is undervalued, Apple with its very large cash horde could be a monster buying machine.

On the other hand. The collection and use of big data is where the real money is being made. Considering how incredibly dumb Siri is given how much data and intergration the assistant has access to, Apple is not capitalizing on the data it has.

Qazulight (After fighting with Siri for a while, I called my wife and told her I wanted out of the Apple position, to which she replied, “We never bought one.” I breathed a sigh of relief and said, “GOOD! Don’t bother selling it then.”

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Be careful about AT&T. The quality of earnings has been falling. This is due to more and more leverage. The thing that is not figured into the quality of earnings is the Deferred Maintenance. There is quite a lot of it and Deferred Maintenance is a debt that can be called at anytime and the premuim on the loan is unknown.

Sold mine at 35, you can keep the dividends and 20 percent run up. The CEO is steering a treacherous course.



The product mix may be shifting towards iPhone 8.

It’s not, absolutely not. At least according to app tracking stats. https://david-smith.org/iosversionstats/

iPhone X is outselling both the 8 and 8+. This could easily push the ASP higher.

Once you go X, there’s no going back to the old button style. :slight_smile: