Taking another look at AAPL

Although AAPL boasts a very low PE it’s been discussed as too large a company to be considered for inclusion on this board because its high growth cannot be maintained.

I think, however, that high growth is about to resume for at least the next 2 years and this could meet the criteria we seek.

Here’s the rationale for my thinking:

  1. iPhone 7 demand. iPhone 7 is now seen as having more demand than originally thought. Although Apple changed its policy on reporting initial sales numbers, confirmation of massive consumer demand (4x as that of last year) has been provided by the carriers (T-Mobile and Sprint).

  2. We’re not done with the year yet. When iPhone 7 and Apple Watch series 2 were announced at the Apple event last week the stock went down immediately after and continued its decline in the next day. This is because the market felt the lineup was just enough to keep Apple in the game until iPhone 8, but not enough to move the needle like the days of past. We didn’t get the infamous “one more thing” moment. Well, we aren’t done with the year yet. We have one more Apple event coming up with more refresh announcements - just in time for holiday shopping period. This is where I expect we’ll get our “one more thing” moment.

  3. iPhone 8. Next year’s iPhone is anticipated to be a game changer. The iPhone 8 is rumoured to see a complete design refresh to coincide with its 10th anniversary. If true, this is the year we’ll see a massive upgrade turn as people rush to get the latest phone.

#2 and #3 are speculation in my part, but it is educated speculation. Apple is not one to rest on their laurels for too long. Simply, I would not underestimate their ability to wow us again with great products and services. With that at the back of my mind as I attempt to peer into the future I think I see a bargain in today’s prices.



The iPhone 8 will read your mind and make calls for you. It will improve your sex life, in combination with Siri and real life people. It will do your laundry and fix your (driverless) car. If you don’t have a driverless car, it will plug into a retrofittable adapter in your present car and drive it for you.

And still analysts will pooh-pooh Apple and say, “Their best days are behind them.”

But once in a while AAPL share price develops momentum. That’s what seems to be happening now, and the “one more event” will likely feed that.

Apple may have more promise - but more volatility - than Berkshire Hathaway. At Berkshire’s present size, they may have to buy all of Apple in order to grow enough in the future. That just popped into my head. Stranger things have happened in both the financial world and in my head.

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One Fool writer agrees with buying AAPL now.