Apple shares - Invest or not invest?

Reaper

Tech is a trickly industry. Unlike, say, an oil company which owns oilfields Apple's fortunes depend on a continuing stream of products that punters are willing to pay way above cost price for.

Look at Nokia - once it dominated mobile phones but is now an also-ran. Their share price declined from $40 to $3 in just 5 years. A lesson well worth remembering for those who think Apple is somehow too big to fail.

Yes Apple has a good PE but the "E" part of that is historical earnings which I am dubious they can continue to generate at as well in the future as they have in the past.

In the end it comes down to whether you think Apple can keep growing as well in the future as well as they have in the past. I'm dubious but I realise others think they can.

mania112

This is a forum where the voices of only you and I are spoken. In YOUR opinion (most of the people who have made a comment here) Apple's earnings will fall.

Whilst you're entitled to your opinion, you need to state that you are basing that on no facts and that theory goes against actual historic data.

People can be easily misled in places like this, and you may be putting someone off (a stock like) Apple, in favour for another which may not be as good.

If trends continue, Apple is a good buy.

http://www.zdnet.com/apples-q4-preview-about-those-iphone-5-sales-7000006338/

Reading this confirms that Apple are doing OK (to say the least) and any examples of iPhone 5 not selling as expected is simply because the 4 and 4s are still moving big numbers.

Demand the for Ipad mini also outsold supply: http://www.dailymail.co.uk/sciencetech/article-2228173/Apple-iPad-mini-iPad-4-sales-hit-3-million-3-days-overall-share-tablet-market-shrinks.html

Remember, size of market share (which may be declining) doesn't matter so much if Revenue continues to rise. More people, generally speaking are buying Smartphones and Tablets - this is perfect for Apple, in the same way it is for Samsung and Google.

That being said, Apple shares are expensive.

The OP is a UK investor looking into direct shares in US companies. I therefore would believe him to be an adventurous investor. Apple doesn't really fit that bill, you're looking for the 'apple of 5 years ago', Apple today perhaps has reached a plateau and fits a moderate investor.

k12479

One thing that doesn't seem to have been mentioned is that Apple doesn't produce purely tech items,they're partially fashion/fad items. There already seems to be market saturation of its products and, like Uggs currently, could go out of fashion at any time.

Thrugelmir

k12479 wrote: »

One thing that doesn't seem to have been mentioned is that Apple doesn't produce purely tech items,they're partially fashion/fad items. There already seems to be market saturation of its products and, like Uggs currently, could go out of fashion at any time.

Apple has has had a hardcore following for decades. Even if the product isn't the best in the market.

rockitup

mania112 wrote: »

That being said, Apple shares are expensive.

The OP is a UK investor looking into direct shares in US companies. I therefore would believe him to be an adventurous investor. Apple doesn't really fit that bill, you're looking for the 'apple of 5 years ago', Apple today perhaps has reached a plateau and fits a moderate investor.

I think you've hit the nail on the head there mania112.

It would be good if Apple would do a 10 for 1 split on their shares, at around $550 each they are not really affordable for some monthly investors. Even to spread bet them in the UK one would need a quite large balance in their account with these $150+ moves in such a short time

The9uru

I had apple shares but sold them a week ago upon discovering the recent release of the iPad 4 (not the mini) but the full size one with the better chip, better camera and new connector. Not sure why they released it to be honest.

My gripe is that this product should either have been made available in the new year (typically March) or the New iPad (the one released this year in March) should never have been released. I'm pretty sure Steve Jobs would not have allowed this under his rule. I feel Apple have lost their way a little with this.

I'm still an apple fan but if they continue to release products in this manner then they will annoy loyal fans. I'm happy to wait 6 months to a year for a better product and this I feel is why I like or liked their products and was willing to pay a premium for.

End of Rant!

sabretoothtigger

What Jobs rule was that ? You think they are milking the cash cow not innovating as much as they used to ?

I think his influence will still be there for years

That being said, Apple shares are expensive.

The OP is a UK investor looking into direct shares in US companies. I therefore would believe him to be an adventurous investor. Apple doesn't really fit that bill, you're looking for the 'apple of 5 years ago', Apple today perhaps has reached a plateau and fits a moderate investor.

Expensive at 12 PE . Not really, not unless their earnings fall, thats the speculation and its likely they'll sell very well over xmas now. 2013 might be terrible but I see no indication of that just a sell off of a stock thats doubled, normal

Its plenty adventerous to buy a single company. Its tech, its high risk, they make stuff from sand and you innovate or die in this business. R&D cost is gigantic, brand superoirty incredibly important in a world of instant duplication.
Its high risk, a water utility is moderate buy centrica they are great but pretty low risk

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This one traders take on the 'double bottom' kind of turn around. Of course if it makes a new low he is wrong

IronWolf

You don't have to believe their earnings will fall to not invest in apple. If you aren't convinced that the earnings will rise, or at least stay stable, then that's reason enough not to invest.

I think it's hard to forsee the long term future of most tech companies, especially if you aren't in that industry yourself.

Apple appear to have a good brand, even though competitors are bringing out better tablets, Apple products are still thought of as the benchmark and a status symbol. That wont disappear overnight, but I don't know if it will last 10-20 years, which is how I think about investments.

k12479

Thrugelmir wrote: »

Apple has has had a hardcore following for decades. Even if the product isn't the best in the market.

I would say it had a hardcore following, I was one of it's fans many years ago, now it's become mass market and ubiquitous. Burberry and Superdry spring to mind but, like them, clearly there is also more to these companies than just the product popularity.

innovate

oops, another drop today
http://www.usatoday.com/story/money/business/2013/01/24/apple-bubble-price-target/1862419/

They might soon be cheap enough to buys some.