Is Apple still crunchy?
Apple stock reached $109.78 recently, being the new peak for last week. Thus, leaving investors of NASDAQ’s AAPL cheering on the market for some days and also provide long term opportunities to its stock. However, two days later the pair gapped an opened at 108.60 and falling as low as the 108.10 before heading up again.
Why Apple cannot fall
After this explosion, investors are wondering if there is more to go and more investment opportunities ahead for them. Investors know that the returns at this peak stage might not be enormous and are afraid to go long or buy more on this market. Are they right? Well no… Below are some reasons why Steve Job’s company still looks viable.
First of all, this year was still a good financial year for the tech giant and most probably the most profitable year for apple as the company reported record cash in and earning per share. Moreover, the company’s cash flow grew heavily during the past months, outwitting most of its tech competitors by obtaining a pushing cash flow of 11%.
Secondly, apple keeps on innovating by creating new products for its customers on the opposite of Microsoft. The apple IPhones and I Pads are the best sellers in terms of new trendy tech on the market, whereas Microsoft still stagnates with no exciting innovations. Even though apple’s cash cows are not as much as Microsoft’s, it still has one of the largest market shares in the industry of trendy technologies.
Moreover, Apple proved to its investors that it does not joke with capital allocations. With this, the company should receive credit for performing aggressively on a record share repurchase program at the times when shares dipped low.
Finally, there is the company’s dividend which might probably increase on an annual basis. This of course attracts long term investors which expect their income to grow over the long run. Also, given that apple is trading at highs doesn’t mean that it could create barriers to entry in the market. The stock still gives a fair price on the market for buyers and other investors.