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Technology Stocks : Apple Inc.
AAPL 278.06-0.2%Dec 11 3:59 PM EST
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To: OrionX who wrote (202367)8/2/2018 11:09:54 AM
From: NAG1  Read Replies (1) of 213176
 
Orion,

Earnings were good (with a beat) but not superb or outstanding which makes me question the fact that the stock has gone up $15 in last 2 days. Not complaining but a little surreal.


I can understand where you are coming from but what I will say to that is that maybe Apple was undervalued coming into earnings, especially when you look at the valuation of the rest of the market.

One thing I read that I found interesting. One article(I cannot find the more recent link but his is one from several months ago)

washingtonpost.com

talked about how big the first quarter buyback has been. It was so big that it was the size of many of the companies in the S&P 500. Apple has done this for 2 quarters now and it is supposed to go on for around 3 more years when Apple should be cash neutral according to 1 article I read. This limits the downside on Apple with them purchasing so many shares each quarter as well as having earnings improve by the amount of shares repurchased. I am guessing but maybe the reason the negativity didn't show in Apple's share price so much before earnings was because of the share buyback and the naysayers were seeing that it would have been too much of an uphill battle. I am sure having Buffett own so many shares is also a sign of support of the company. I saw 1 article talk about Apple going to 300. I wouldn't mind but think that is getting way ahead of itself. I think Apple is probably about fairly valued here but it probably does have some room to run to be valued like the rest of the market. I do like that Apple feels its shares have been undervalued that they are buying back so much of the company. That is also a vote of confidence.

I have sold a small amount of my Apple shares to add some balance to my portfolio. I will wait to sell a larger part that does a better rebalance to the portfolio secondary to tax consequences but will continue to sell small amounts to help increase dividend yield in preparation for retirement in a couple of years and improve the balance of the portfolio.

Just a last parting thought. I have seen that Apple should have bought Netflix and Tesla but has any thoughts been put into Apple buying Samsung? It would be something that could make their supply chain much more reliable and Samsung has good manufacturing expertise. I am guessing that it would run afoul of several things in terms of competition but I thought it was an interesting idea.
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