1/6/2017 Update: AAPL rose about $2 in the first week of trading in 2017 and closed at $117.91 on Friday. The stock stayed strong all week despite no important news happening to start the year. Investors are now waiting for the next earnings call that should happen in about three weeks.
Apple’s AirPods continue to be sold out everywhere and they continue to get stellar reviews in the media. Tim Cook has said the AirPods are selling worldwide as fast as the company can make them and they have gotten universally good reviews..
The hype over Nintendo’s Super Mario Run has totally died down as the game set new download records but got a lot of negative reviews about the price. It was hoped this game would be a big winner monetarily for both Nintendo and Apple but it looks like it will miss the mark.
The last Apple earnings release happened on 10/25/2016 and while Apple met all of its quarterly estimates and most of the analysts predictions, there was nothing that “wowed” anyone in terms of sales. Most damaging seems to be the guidance the company gave for next quarter that was below what many had hoped for. It seems Apple is having a real problem making the iPhone 7 Plus and the Apple Watch Series 2 that will mean it cannot satisfy demand and may not be able to through year end. Its great to have high demand for your products but if you cannot make them fast enough then you lose the opportunity to make sales and investors hate that.
On Thursday (10/27/2016), Apple debuted the new MacBook Pro and that was it. The new computer comes in 13 and 15 inch sizes and sports a new “Touch Bar” at the top of the keys which is OLED and changes depending on what program you are in or website you are on. While the computer itself has been highly reviewed, the high prices for the new models have taken most customers by surprise. While other manufacturer’s computers continue to come down in price, the new MacBook Pro’s are more expensive and will set you back $2,399 for the 15 inch base model. Both screen sizes are now sporadically available in stores but you still have to order online if you want to be sure to get one.
If you are interested in buying Apple stock you need a broker account and I recommend OptionsHouse because of its low $4.95 per trade fee. It gets great reviews every year from the financial media (3rd in the 2016 Barron’s rankings) and so why pay double those fees like most other online discount brokers charge? Apples’s stock price has come way off its highs and if you are thinking about buying it right now, the only question you should care about at this point is whether you think the stock is cheap, fairly valued, or overpriced. In other words, is the stock a good buy at these levels and will it continue to be a good investment going forward? But first you need to sign up for an online broker account and OptionsHouse is a great choice. (***Don’t forget to put money in your account after opening it so that you can actually buy stock!)
I Own Apple Shares In Several Broker Accounts
Disclosure: I own Apple stock in this blog’s portfolio and I own more shares in a different account as well. You can find out what stocks I own on the front page of my blog. I firmly believe that you can buy AAPL shares at any price under or around $110 and make money in the long run.
I don’t anticipate selling any of my shares even with the current pullback. I believe the company will continue to perform at a very high level am a big believer in Apple and its ability to bring products and software systems to the market that people love.
Apple’s Products And Services
2015 was a blockbuster year for Apple in terms of new hardware and software but the stock price was a big disappointment for much of the year. The struggling stock price continues into 2016 as investors seem to be extremely concerned that too much of Apple’s revenue is dependent on the iPhone and that a variety of other factors will hurt the bottom line. But Apple continues to push out new products and updates that should keep them in the forefront of consumer’s minds:
1) Apple Watch: A new Apple Watch OS 3 has come out as well as two new watches (Series 1 and Series 2). Series 1 is the old watch body with a faster processor and a starting price of $269. Series 2 has a slightly thicker watch body to accommodate GPS, the faster processor, and a bigger battery and starts at $369. The Series 2 Apple Watch is also water resistant to 50 meters and has a screen that is twice as bright as the first generation watch. The Series 2 Apple Watch was sold out the first day in stores and will not be in stock until November 7th, 2016. Ordering online shows a wait of 3-4 weeks.
2) iPhone 7 and 7+: Apple’s newest phones came out late September 2016. For the first time these phones no longer have the standard 3.5mm headphone jack which has many people upset. The phones are more waterproof and have a better camera but it seems that the iPhone 7 models might not be as big of an upgrade as people always desire. Apple likely is holding off one more year (iPhone 8 in 2017) for the bigger hardware changes like OLED screens due to their inability to get them into this years model.
A new 4 inch iPhone SE has been for sale for over 8 months and is selling very well according to all reports. This is the size many people have been waiting for (including me) and it comes with many of the features of the iPhone 6S including the same camera and Live Photos. It also comes with Apple Pay and much faster speeds than the 5S which was Apple’s last four inch phone.
3) New iPads, MacBooks, and iMacs: A brand new iPad Pro with a screen size of 12.9 inches has now been available to buy for over a year but how well it is selling is unknown. The latest 9.7 inch iPad debuted in late March 2016 and is now also called a “Pro”..
Apple just introduced the newest 13 inch and 15 inch 2016 MacBook Pro’s with an OLED Touch Bar that changes depending on what software you are using. It replaces the static row of function keys at the top of all older laptop models. It is lighter and faster (of course) and reception has been mixed by reviewers. Consumers have to buy this new MacBook Pro online as it is still not in stores and faces supply constraints.
The newest MacBook has been available since mid May 2016 and this is the one that features only one port. It has gotten mixed reviews and was redesigned with new keyboard keys that have less travel which some people really like but others don’t.
4) A new Apple TV: The new Apple TV set top box is now available and is getting generally favorable reviews. It is priced at $149 and $199 and comes with a brand new Siri enabled remote that also has a touch screen. The biggest news though, is the long awaited App store which opens up casual gaming and anything else developers can dream up for the Apple TV. (The highly anticipated new streaming TV service has been rumored to have put on hold for the immediate future). It has long been hoped that Apple could change the television industry for the better and this is the first step.
5) Apple Pay: Continuing to get good reviews and new locations (over 2 million now), Apple’s mobile payment system is one year old and slowly picking up steam. Adoption has been steady but slow and the major stumbling block seems to be that not enough retailers have the updated card readers that work with Apple Pay. The payment service has now been expanded into England and Canada and you can now include your individual reward cards in Apple Pay which will automatically be credited.
Apple’s huge customer base that is made up of many early adopters give Apple Pay a real shot at finally pushing mobile payments over the top. By all accounts it is fun, easy, and quick to use and customers love the privacy and security Apple Pay affords them. The big challenge continues to be getting retailers to adopt the service and buy Tap To Pay readers that can be used. Apple Pay gives potential iPhone customers one more great reason to buy Apple when choosing which mobile phone brand to buy.
6) Beats is now called Apple Music and will cost $9.99 for individual accounts and $14.99 for families who want to have up to 6 members use the service under different ID’s. The new streaming music service debuted in late June 2015 and you are now able to listen to any song in iTunes as well as watch lots of artist’s videos on the site. We will finally get to see if Apple’s Beats acquisition will enable it to seriously contend with Spotify and Pandora.
But, Is It Too Late To Buy More Shares?
AAPL hit an all time high of $134.54 during the summer of 2015 and was absolutely on fire before this big pull back to just under $109. I do think the stock will continue to perform well over the very long term but for the short term, there will be choppy waters and possibly even more losses. If you buy or own this stock, you will need to be patient. Apple is an extremely solid company with a great management team and that is one reason to buy the stock and hold it for the long term.
I believe Apple stock is a great company to own for the LONG TERM. I think they are continuing to systematically set up their product lines and software ecosystems to prosper for many years to come and you get a 2% dividend on top of that. If you are a trader looking for a quick buck, I have no advice for you. But if you want to add a solid company run by an extremely adept management to your portfolio, it is NOT too late to buy Apple stock.
Disclaimer: This is just my opinion and you should do your own research and come to your own conclusions about any stock you intend to buy. Additionally, you should always consult your financial advisor or broker if you have one.