Apple: Analytical Shift Makes Stock A Buy

Friday, April 19, 2013

My last analysis of Apple (Apple: Last Year I Said Sell — Buy Now?) was downbeat. Now I believe Apple looks like a good buy.

So what’s changed? Basically, the perspective we should adopt in evaluating the “new” Apple. Apple’s 45% decline from its $705 high only seven months ago contains two major adjustments:

  • First, the removal of the over-optimism that drove AAPL dramatically up to that high
  • Second, the reduction in fundamental valuation reflecting reduced growth forecasts

But, there is another adjustment in the works that converts those negative dynamics into a positive view: The stock is moving away from being a disappointing growth investment and becoming a desirable income one. As a result, AAPL looks to have once again entered “buy” territory.

This article is published on SeekingAlpha.com

 

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