10/21/2016 Update: Apple stock closed Friday at $116.60, down about a dollar for the week. All eyes will be on Tuesday’s (10/25/2016) earnings followed by Thursday’s (10/27/2016) Apple event where it is thought that new MacBook Pros and Airs (and maybe something else) will be displayed. There will be a tremendous amount of press coverage for those two happenings which means next week could see some bigger than usual moves in AAPL stock.
The news of the Samsung’s Note 7 debacle is now dying off and the earnings on Tuesday will start to settle the debate over just how high or low iPhone 7 demand really is. As usual, the forward guidance given by Apple about next quarters projected earnings will be key in determining whether the stock goes up or down.
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 should come out in mid September 2016. The rumor mill says that they will, for the first time, no longer have the standard 3.5mm headphone jack which has many people upset. The phones could be 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 6 months and is selling very well according to the latest earnings report. 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 is now available to buy as well as the Apple Pencil (a stylus) and a cover/keyboard for the iPad Pro. It is believed that Apple sold approximately 2 million of these during the 2015 holiday season.
**The latest 9.7 inch iPad was announced and will go on sale March 31, 2016. It will also be called a “Pro” and will be a smaller version of the 12.9 version and include all the features. A smaller keyboard will also be available and the Apple Pencil will work on this new iPad Pro.
The new slimmer and lighter MacBook is now for sale and has gotten mixed reviews. It has a high price and only one port but everyone agrees it is a marvel of engineering. Updates to the MacBook Pro should be coming out later in the year.
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 over $116. 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.