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  • Will Apple Ever Get Out Of Its Slump? 0 comments
    Jun 22, 2013 10:55 PM | about stocks: AAPL

    Apple (NASDAQ:AAPL) stock was once thought of the investment that never stopped going up, but lately it's been just the opposite. Under the great Steve Jobs, Apple's growth was exponential, but critics are still waiting for Tim Cook to back up the statements he's made about being just as innovative and inspiring as Jobs. Over the past six months Apple is down over 93% from its highs this past fall. Does Apple stock have any life left, or are their glory days over?

    Apple is certainly in a transition phase, with new substantial new products being released. Apple has just announced a new iOS7, new Mac Operating System, iTunes Radio, and new MacBook Airs and Mac Pros, but even still is it enough? General consensuses on the new releases are mixed, but I personally like everything that was announced.


    Financially, Apple's ratios are excellent. The company is currently valued at a price to earnings ratio of 10.4 with a PEG ratio of .62. This values Apple as very oversold, as their growth rate is nearly double their price to earnings multiple. Apple's dividend yield is continually increasing as the stock becomes cheaper and due to Cook's management.


    In regards to new product innovations, Apple has been flat. Increasing competition from Samsung and other android powered devices has hurt Apple, as well as a lack of major changes or added features to iPhone. Apple's latest iOS7 redesign was premiered to applause, but will most likely not be enough to spark new sales. New refreshes to MacBook Airs and Mac Pro's also won't be enough to spark huge consumer demand. Apple's potential iWatch or Apple TV could be a game changer, but what Apple really needs to do is release a product that no one knows is coming.


    In conclusion, Apple stock does appear to be an excellent value, even if its significant growth days are over. Tim Cook has promised new innovations and "game changers", and if he is able to deliver, the stock could be due for a run. Even without a completely new product category, Apple's current financial position and excellent valuation provide for an excellent price appreciation and dividend payout over the long term.

    Disclosure: I am long AAPL.

    Stocks: AAPL
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