Forget for a moment that Apple is about to release their biggest (both literally in terms of screen size at 4.7″ and perhaps a second model at 5.5″ as well as in sales numbers) iPhone ever. Also forget for a moment that the iWatch that Apple has been meticulously crafting and perfecting for several years is a likely to be a monumental hit unlike Samsung’s iFlop. (Samsung doesn’t ever seem to do very well when they don’t have Apple to steal ideas from. No Surprise Samsung’s profits were down 25% from a year ago today.) Also try and ignore Apple’s huge new venture into car infotainment with CarPlay or their foray into homes with HomeKit. Finally do your best to ignore the fact that the next AppleTV will likely bring iOS to your big screen opening up an entire new world of possibilities for additional profits. And oh yeah ignore the fact that with the recent Beats acquisition the sky is the limit with streaming radio profits. Just for a moment consider the numbers right in front of our face today.
The tech giant was higher again on Monday after the company hired the vice president of sales at Tag Heuer, Patrick Pruniaux, ahead of its fall iWatch launch.
As shares approach their split-adjusted all-time high, is it worth biting into Apple’s stock?
“Technically, yes, we think it is still a buy, even after the nice run,” said Ari Wald, chief technical analysis at Oppenheimer & Co. “We like big caps a lot. We like Apple a lot. And, we like technology.”
Wald sees pullbacks in Apple, such as the one in June to the $90 level, as buying opportunities. “But even at current levels, we think it’s going higher,” Wald said. “It’s a buy here.”
According to Wald’s charts, Apple’s price behavior over the past three years is strikingly similar to what occurred between 2007 and 2008. “In December 2007, stock dropped 60% [and] it took 22 months to make a new high,” said Wald. “Fast forward to the last two years, the stock dropped 45 percent. More importantly, 22 months later, we’re again about to make new highs. It could trade sideways at around $100 [but] we think it breaks out to the upside. Buy Apple.”
Marc Lichtenfeld, chief income strategist at The Oxford Club, says Apple is cheap relative to the overall market even as it gets close to its all-time highs.
“It’s very inexpensive still,” said Lichtenfeld. “It only trades at 13 times forward earnings versus 15 for the S&P 500. So, the stock could still rise 15 percent and just be in line with the market. And, in my opinion, it deserves a premium.”
Now remember when I told you to forget all all those future products? Now consider if even one of them are even moderately successful. Let alone two or more. After the 7-1 stock split single shares in Apple suddenly became affordable to a great many people that couldn’t buy in at around $600 or higher. At the time of this post Apple was trading at around $96. That will not last long. By this time next year we could see AAPL trading easily at $115 and possibly higher. If you have ever wanted to buy Apple now is likely your best chance and certainly buy before the iPhone 6 is released.