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Anonymous

Posted 3w ago

Would you still invest in Apple (NASDAQ: AAPL) stock?

Apple stock is up over 80% in the past year. Is it too late to invest in Apple? What do you think? I'm feeling FOMO.

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6 answers

Discussion (6)

Hi anon, totally understand where you are coming from.

Sometimes, if a company we like has gone up a lot, we may feel that we are missing the boat.

From experience, what I've seen is that great companies can keep on being great. And Apple could be one company.

Apple just posted a record quarter today, even at its huge size. Here are some highlights:

  • Revenue up 54% to US$89.6 billion, a March quarter record

  • Revenue from each of Apple's geographic segments set new highs

  • There was strong double-digit revenue growth in each of its product categories, including Services

  • Gross profit margin improved to 43% from 38% a year ago

  • Apple's installed base of active devices rose to an all-time high

  • Its net income more than doubled to US$23.6 billion

  • Cash flow from operations rose 43% year-on-year to US$62.7 billion

  • Apple's dividend per share increased by 7% year-on-year to US$0.22

I think over the longer term, Apple could be a good stock to own. It has pricing power as seen from its strong gross profit margin. When more people use Apple products, the Services segment, which garners a high gross profit margin, can grow even more. Services is now the second-largest revenue contributor behind iPhone.

Apple could also be investing in the AR/VR space. And there could be an Apple car in the works. We never know what great products the R&D team is conjuring up.

So, over the long-term, I think there could still be opportunities to buy in if you believe in the company.

If you want to know more about Apple, you can check out our lengthy analysis on SeedlyReads: https://blog.seedly.sg/apple-inc-nasdaq-aapl-stock-analysis

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1 more comments

Sudhan

Sudhan

3w ago

Haha you're welcome Rachelle!

Sudhan

Sudhan

3w ago

I'm wondering how many will buy an Apple Watch once the iOS 14.5 update is out just so they can unlock their iPhones while wearing a mask? "Unlock iPhone with Apple Watch Starting today, customers can use their Apple Watch to securely unlock iPhone when attempting to use Face ID while wearing a face mask. With Apple Watch on the wrist, unlocked, and in close proximity to iPhone, users can simply glance at their iPhone and they will receive haptic feedback from Apple Watch, indicating their iPhone has been unlocked. The new feature works with iPhone X and later and Apple Watch Series 3 and later." Source: https://www.apple.com/newsroom/2021/04/ios-14-5-offers-unlock-iphone-with-apple-watch-diverse-siri-voices-and-more/

Post

It's never too late, you can always go in and DCA. I didn't really go through all the finance datasheets so you may still want to review them. I went in however because for a few reasons:

  1. Apple's marketing model is quite a money-generating machine from their subscription-based services and it is popular among many. Just ask yourself, how many people use iCloud?

  2. The M1 processors are a game-changer in the computer industry. It offers high power and a long battery (sounded like there is no compromise). None of the Intel processors can match the M1 for power efficiency. It's unparallel at least for the next couple of years.

  3. Apple marketing is still strong and dominant, and its reputation is also unmatched. That is why people buy iPhones even there are "better" spec phones out there because the user experience of the iPhone is really great.

Having said that, here are some reservations you must consider:

  1. Apple is likely to be overvalued based on many reports.

  2. For trend, it has stalled for now (but may be good opportunity to buy).

  3. Trade War with China: Chinese still buys Apple products quite a lot. Imagine if there was a ban on Apple products (like how Huawei was banned in US).

  4. M1 aside, the innovation pace at Apple is also starting to slow down. Year on year, their iPhones don't really have large improvements and that may not be a good sign.

Still, I think Apple has a good few more good runs. At least for the next 5 years, we can expect some pretty solid growth. I can't promise 10 years but yeah. DCA it if you want, but do diversify!

0

Post

AAPL is currently overvalued. An approach you may consider is to first determine the total value you...

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