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Is Apple Still One of the Best Values on the Market?

Over the past three months, Apple's stock has dropped 35%, falling from an all-time high of above $700 to its current price of around $450 per share. Apple currently trades at 10 times its trailing-12-month earnings and 6 to 7 times its forward earnings.

In this video, technology and telecom analyst Andrew Tonner talks about the reasons Apple still represents a good value, including customer engagement elements such as the "sticky experience" of the Apple apps "ecosystem"; lower price points in emerging markets, where it faces strong opposition from Google; and potential capital returns in the form of dividends backed by its $137 billion in cash on Apple's balance sheet.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, after the company's recent backslide, down 35% from its high in September, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

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  • Report this Comment On February 24, 2013, at 2:28 AM, sammycooool wrote:

    These moronic videos keep telling you to buy Apple stock from $ 700 all the down, Make this clown go away by writing to the head Fool and tell him how stupid these videos are.

  • Report this Comment On February 24, 2013, at 7:11 AM, secularinvestor wrote:

    Andrew Tonner is quite right about Apple being incredibly undervalued and makes a great point about the huge competitive advantage of Apple's eco-system and its renowned stickiness.

    A problem Apple has is that every talking head and Wall Street pundit thinks they understand Apple and the mobile PC market which Apple created and leads, when in fact they most haven't a clue and just repeat each other's nonsense.

    A couple of Wall Streets greatest myths are the so called "law of large numbers" and that Apple's is no longer a growth stock because its growth is going to slow to single figures because of increased competition from the likes of Samsung.

    In fact Apple has huge headroom to grow and is smashing Samsung and other competitors.

    According to Strategy Analytics in 2012 Apple grew its share of the total mobile phone market by 50% from 5% to 7.5%, which leaves huge headroom to grow, as it continues to gain market share.

    Samsung have repeatedly claimed that the Galaxy is the "worlds best selling smartphone" which the gullible pundits of Wall Street have believed.

    However last quarter Apple actually sold 47.8m iPhones - i.e. MORE THAN THREE TIMES AS MANY as the 15.4m Galaxy S3s Samsung claimed to have "shipped", according the Strategy Analytics,

    As Strategy Analytics pointed out, Apple in fact sold nearly TWICE as many iPhone 5s (27.4m) and even sold MORE year old iPhone 4S (17.4m) than all the S3s Samsung claimed to have shipped

    (Note: not "Sold" but "shipped" because many S3 ending stacking shelves in channels, which could only be shifted with huge discounts and even 2 for 1 offers!) .

    Further evidence that Apple is not suffering from Samsung's or anybody else's competition came from Canaccord research which showed that last quarter:

    * Apple took home 72% of the profits of ALL mobile phone makers, with only 21.7% share of smartphone unit sales (up from 15.4% in Q3).

    * Whereas Samsung's took only 29% of all mobile phone profits which came from 28.9% of smartphone unit sales (DOWN from 32.3% in Q3).

    * 43 cents of every dollar spent in the world on a cellphone in Q4 ended up in Apple's coffers.

    * Samsung got just 36 cents. Nokia got only 7 cents. All the rest got less than 5 cents.

  • Report this Comment On February 24, 2013, at 9:50 AM, Utekai wrote:

    To secular investor:

    Your numbers don't add up ...

    * Apple took home 72% of the profits of ALL mobile phone makers, with only 21.7% share of smartphone unit sales (up from 15.4% in Q3).

    * Whereas Samsung's took only 29% of all mobile phone profits which came from 28.9% of smartphone unit sales (DOWN from 32.3% in Q3).

    So Apple at 72% and Samsung at 29% took in 101% of all smartphone profits. No other players huh?

  • Report this Comment On February 24, 2013, at 4:16 PM, secularinvestor wrote:

    @ Utekal

    "Your numbers don't add up ..."

    Well spotted, but they aren't my numbers but Canaccord Genuity's numbers.

    The reason Canaccord's numbers don't seem to add up is that the other competitors made a loss. See this link for a fuller explanation:


    Change [Dot] for a period.

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