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The Market Has It All Wrong: Apple Is Still a Buy Before Earnings

Apple (NASDAQ: AAPL  ) has come down a little since it rallied in the wake of the fiscal cliff deal, and it's come down a lot since its all-time high back in September. But with the earnings report from the biggest quarter of the year less than three weeks away, investors will be kicking themselves if they get out of their Apple positions now. In this video, Motley Fool tech and telecom analyst Andrew Tonner discusses the continued massive sales growth of Apple's iPhones and iPads, and he highlights just how big Apple's upside really is.

Apple has been a longtime pick of Motley Fool superinvestor David Gardner, and ir has soared 219.20% since he recommended it in January 2008. David specializes in identifying game-changing companies like this long before others are keen to their disruptive potential, and in helping like-minded investors profit while Wall Street catches up. Learn more about how he picks his winners with a free, personal tour of his flagship service, Supernova. Inside you'll discover the science behind his market-trouncing returns. Just click here now for instant access.

Read/Post Comments (6) | Recommend This Article (3)

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  • Report this Comment On January 05, 2013, at 8:59 PM, DrGoldin wrote:

    You seem to do these Apple plugs DAILY now, and in each one of them you fail to address the issues that are really troubling investors:

    1. Apple is no longer the biggest smartphone seller in the world. Samsung passed it in 2012, and Apple is not going to catch up. If anything, it's losing more ground. Frankly, I see the same story that played out with the old Macintosh. Remember those days? At first, people were willing to pay a premium for a Macintosh because it was so much cooler and more intuitive; then that came to an end, because competitors were able to deliver a functional alternative at a substantially lower price. Just watch--it's the same process all over again.

    2. Apple is no longer considered the most innovative company of its type. You acknowledge this, then try to defuse the argument by referring to the many different products that Apple has brought to market lately--but if they're all lackluster and derivative, how exactly do they prove your case that Apple is still innovative?

    The big lawsuits have been nothing but bad press; they've only fueled the misgiving that Apple's new strategy is going to be litigation rather than innovation. (Winners design new products; losers sue.) The fiasco with the mapping application was bad press too. That kind of Keystone Kops routine doesn't cut it if you're trying to present yourself as a cutting-edge technology company.

    Really, what do you think has allowed Apple to sell its products at such huge margins? The perception that it sells the most innovative products in the world. Lose that, and you become just another company.

    3. Steve Jobs created tons of shareholder value and investors are reluctant to assign the same premium to the new CEO. Maybe he'll prove to be a worthy successor. But as long as the jury is still out, he doesn't deserve the benefit of the doubt.

    I'm not saying that all three of these concerns are necessarily justified, but if you want anyone to take you seriously, you must at least ADDRESS them. Don't keep reminding us that analysts predict sales of so-and-so many phones. We know all that. That's not insight.

  • Report this Comment On January 06, 2013, at 12:59 PM, baozebub wrote:

    Dr Goldin,

    I don't understand the super enormous cheering that goes on for Samsung. Every time I read an Apple article, the very first, and often only comment is someone coming on and talking down Apple for the benefit of Samsung. And the comments are always the same.

    What if people invested in Apple and lost a lot of money. Does that bother you so much that you would come on and try to save them?

    Why do people like you hate Apple so much? What has Apple done to you? Are you upset that another company did not become the number one smartphone manufacturer? But maybe Samsung is number one. Then what is in it for you to talk down number two? Do you want Apple to go to number 3? Or maybe to completely collapse so you can feel good that Another American company has gone broke, losing a lot of money for investors, engineers, and even the US government that collected 6 billion in taxes in the most recent year.

  • Report this Comment On January 06, 2013, at 1:11 PM, TimKnows wrote:

    Samsung is doing everything right and Apple is the opposite of success in 2013. They have a terrible OS and now we are to buy into marginal changes in their existing products for 2013? No thanks.

    Dr Godin has it right, it is refreshing to not have to hear weak videos from those who aren't qualified to do them, ....cheerleading about Apple on the hour. This constant cheerleading shows us how desperate Apple is to promote itself in 2013, like we didn't know they sold some new phones this past quarter?? Come on, get over earnings and look at how little they are doing for the future of the company.

  • Report this Comment On January 06, 2013, at 1:25 PM, baozebub wrote:

    If you guys are so sure of your position, then short Apple and cover after ER on the 23rd. I don't think you guys are sincere with your arguments. You're just badmouthing Apple because nothing else comes close. If you like Samsung products so much, then great, buy them. I'm not trolling Samsung stories so you can invest if you want.

    Problem with guys like you is that you deny the reality that Apple is probably the only store in the mall that is busy every day of the week.

    Maybe the stock is overpriced, but that's a different argument than the ones you Samsung trolls put out. Calling Apple a bad product is strictly trolling.

  • Report this Comment On January 06, 2013, at 2:03 PM, deasystems wrote:

    DrGoldin, allow me to take a stab at your list of investor concerns.

    "1. Apple is no longer the biggest smartphone seller in the world."

    Apple has never been the biggest smartphone seller in the world. Not even close. Therefore that concern is completely invalid. On the other hand, Apple has long been--and remains--the most profitable smartphone seller in the world.

    "2. Apple is no longer considered the most innovative company of its type." astroturfers, paid bloggers, and FUDsters. The reality is that Apple is *objectively* the most innovative company of its type by far. It obviously is the wellspring of innovation for the markets it addresses, inspiring nothing but copycat products and services by its would-be rivals.

    "3. Steve Jobs created tons of shareholder value and investors are reluctant to assign the same premium to the new CEO."

    And thus, we have seen the continuous decline in AAPL's P/E. There is no "premium" and, in fact, there hasn't been one for many quarters. Mr Market, as is often the case, has overshot the mark on this. It's time for a correction to the correction...

  • Report this Comment On January 06, 2013, at 2:27 PM, DrGoldin wrote:

    Just to clear up two misconceptions:

    1. I'm not trolling for Samsung. Where did I recommend Samsung?

    2. Contrary to deasystem's claims, Apple was indeed the world's leading smartphone vendor (by unit, not just in terms of dollar profit) in 2011:

    As for whether Apple is "objectively the most innovative company of its type": if we can disagree about that, you can't use the word "objective."

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