I think APPL is past the pheonomenal product stage.
Just look at its current ads and you can literally see the difference.
Apple watch ...meh
thinner macbook ...meh
iphone 7? ...what an even bigger screen? or a security lock that scans the eye instead of my toe? It will maintain results but growth ...meh
Consumer stocks are not cyclical for a good reason.
When the new product/service is out, everyone goes fanatic. Earnings fly and margins expand..hence valuations expand. When they go down, they usually go all the way with little or no chance of recovery. Numbers here lag severely and I wouldnt recommend looking too much into the numbers.
AAPL with an EBITDA of 81B and EV or 538B, it has a 6.6x multiple. Plus a PE of 10.42. I would say it is a value stock. It is a great brand and a cash flow generation machine. The question, in my view, is the upside and downside. I think the management is not creating insanely great products that provide a clear upside in value. Whereas, there is the downside that the iphone continues to decrease its market share to a point that may affect its attractiveness as platform and the business become a "winner-take-it-all" one, which I don't expect to happen in the coming years. Therefore, I don't see a clear upside, neither a clear downside in the near future... That being said, even at the current price, I am not sure I want to add AAPL to my portfolio. I try to buy at reasonable prices, provided I expect the business has a clear upside. Note, however, that I am probably the less experienced investor in this forum... :) |
