Is Apple a Good Investment?

PHOTO CREDIT: Apple

OVERVIEW

Apple Incorporation is a company based in the United States. The company designs, manufactures, and sells iPhones, iPads, Macs, and Wearables (Air Pods, Apple Watch, etc.). The company also offers a wide range of services like Apple Music, App Store, iCloud, and many others. The company was founded in 1977.

Why You Should?

  1. Apple is a great growth play in an investor’s portfolio. The company continues to beat expectations and report strong double-digit growth across all of its product categories. As the demand for these products and services continues to increase in the long term, Apple remains a great long-term investment option.
  2. Apple currently trades only 28 times price to earnings. I think that this is extremely undervalued for a company like Apple, a company that is consistently bringing in strong revenues and profits while maintaining a strong portfolio of products. I think that investors will always look to mega-cap tech stocks like Apple to park and grow their money for the long term.
  3. Apple already looks like it will have a great year with the new iPhone 13. Even before the launch of the iPhone, Apple reportedly wants its suppliers to produce 20% more components for the iPhone 13 to increase the supply of new phones. iPhone is Apple’s largest business and a further increase in supply will benefit the company and its investors.
  4. Apple services (Apple Music, iCloud, etc.) will benefit the company. Services allow Apple to keep customers around longer and keep users in the Apple ecosystem. Services are also the most profitable and fastest-growing part of the company’s business as well. This combination will drive growth for Apple’s stock price and will benefit the company as well.
  5. The company has vertically integrated most of the components in its devices. Though Apple still doesn’t manufacture its own devices, the company is seeing strong growth due to improved user experiences with the A14 (iPhone) chip and the M1 (Mac) chip. As Apple continues to expand its own line of chips, it will improve profitability and growth for the company.
  6. Apple has absolutely obliterated analyst’s expectations over the past couple of quarters due to strong demand and consumer sentiment towards the company. As Apple continues to beat expectations, it will further increase investor and analyst sentiment towards the company and boost the company’s stock price. This will benefit the company and its investors.

Why You Should Not?

  1. Apple faces tough competition in the consumer electronics and services industry. Some of these competitors include Samsung, Google, Microsoft, and many others. This competition might hurt the company and its investors.

MY OPINION

I think that Apple is a great long-term investment option due to its position as a good growth play, a cheap stock, iPhone 13, vertical integration, growing services sector, as well as a long history of quarterly earnings beats. However, competition might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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