Apple is down 10% in the last two days, which may signal that the market has turned bearish. It is not an ideal time to buy stocks, but I have found that when it comes to Apple stock, you need to pay close attention to their earnings reports and not get too caught up in the noise.
Apple stock has been on fire lately, but is it time to buy?
After posting its strongest quarter ever in 2018, Apple stock has climbed close to 20% since the beginning of the year.
While many investors are bullish on Apple, a growing number of analysts see a bearish future for the company.
For example, Bernstein analyst Toni Sacconaghi believes that Apple will only continue to grow slowly while other companies like Amazon and Netflix are set to gain further market share.
Meanwhile, another tech analyst thinks that the iPhone XS Max is a dud and that Apple’s upcoming iPhone 11 won’t live up to expectations.
A recent article in the Wall Street Journal suggests that the market might be overestimating the value of Apple stock. At the time of this writing, Apple’s stock price was $161.90 per share. The Journal suggested that investors should instead look at other companies that have high-profit margins similarly.
Should I buy or sell Apple stock?
Apple is one of the most iconic companies on earth. The stock has gone from $500 to $1,200 in the past 12 months, and many investors wonder if it’s time to buy.
To figure out whether or not it’s worth buying, you need to answer a few questions.
Is the price of the stock fair?
It’s hard to argue that Apple’s stock is unfairly priced. Since the beginning of 2016, the stock has climbed from $600 to $1,000 and is now around $1,400.
Apple is currently the second-most valuable tech company in the world, with a market capitalization of $847 billion. The company’s stock is trading at a P/E ratio of 22, meaning it’s trading at 22 times its current earnings.
The P/E ratio measures the price of a stock relative to its earnings. If the P/E is lower than 15, it’s considered undervalued.
A lower P/E means that the stock trades at a discount to the company’s expected future earnings.
Apple Stock Buyback Plan
Apple plans to return $300 billion to shareholders by the end of 2022. The company has already started returning cash to investors, and it’s planning to do so until the end of 2019.
Apple will buy back $50 billion worth of its stock each year. This is one of the most extensive buyback programs ever implemented.
According to Macrumors, the stock buyback program will end in September 2019, and the company will “announce when the program will begin in the second half of 2019.”
While Apple’s stock price has been up 20% over the last year, its profit growth has also been impressive.
In Q1 of 2018, Apple made a net profit of $25.2 billion, but by Q2 of 2019, that number had grown to $53.1 billion.
Is Apple Stock a Buy?
The market is valuing Apple at around $1 trillion, up from $900 billion in 2017. If you owned Apple stock, you’d be sitting on over $10,000 of profit.
Is that time to sell? No, because Apple stock still has room to grow. But it may be worth buying if you believe the stock is undervalued or Apple’s prospects are brighter than you thought.
Apple (AAPL) is still a great company, and investors who buy the stock can expect strong growth over the next couple of years. But the stock is trading at a discount compared with its potential, and there’s a good chance it will rise from this depressed level. If you believe that Apple stock is undervalued and want to invest in a high-growth company, then now may be the time to buy.
Why Apple stock is worth buying now
Despite its current status as the most valuable company, Apple stock has long been a source of debate among investors. Some believe that the company’s fundamentals are improving, while others believe that the iPhone maker is on a slow decline.
Let’s take a closer look at what’s happening with Apple stock.
Apple is still a leader in the smartphone market, and the iPhone XR and iPhone XS Max are the best iPhones the company has ever released.
The iPhone XS is selling for nearly $1,000 off-contract, making it the most expensive iPhone ever sold.
Analysts are also saying that the company’s iPad sales are rising, which is good news for investors.
While Apple is far from perfect, its stock is worth owning if you’re looking to make a purchase.
Frequently asked questions About Apple Stock
Q: Should I buy Apple stock?
A: Yes, if you want to own the company that owns the iPhone, the Mac, iTunes, etc. I think it’s a great company.
Q: Why should I buy Apple stock?
A: Because they are innovating. They are coming out with new products that we like and use.
Q: How can I tell if the Apple stock market is going up or down?
A: You can find that information on the Yahoo! Finance website. There is also a free online app called Ticker for your phone.
Top myths about Apple Stock
1. You can’t predict Apple stock prices.
2. Apple stock is not a good investment.
3. Apple stock will soon crash and burn.
4. Apple stock is no longer a safe investment
5. Apple stock is not an excellent investment opportunity.
Conclusion
I think there are several reasons Apple stock is a good investment to consider for the long term.
However, I think the stock price has been overvalued for some time now.
So I would look to invest in other market sectors where I think the risk-reward ratio is much higher.
For example, you could consider investing in high-quality dividend stocks, REITs, or private companies like Amazon or Netflix.
