2 Simple Reasons Why Apple Shares Are a Buy

Apple (NASDAQ: AAPL  ) investors can't catch a break in 2013, and the punishment continues. Without Steve Jobs on board, fears have been mounting that Apple will no longer deliver revolutionary products that take the world by storm. In this video, Motley Fool contributor Steve Heller looks past the noise and focuses on two simple reasons why Apple shares remain a buy. Is it time for investors to go against the herd and take a contrarian stance with Apple?

There's 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 your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (8) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On March 11, 2013, at 7:27 PM, TimKnows wrote:

    Do not buy AAPL for the rest of 2013, they have nothing to offer consumers any more and the competition has passed them by.

  • Report this Comment On March 11, 2013, at 7:40 PM, Budstocker wrote:

    Apple is a BIG buy for all the things just mentioned in the video. With more cash distribution coming this year.

  • Report this Comment On March 11, 2013, at 7:50 PM, lkmd2016 wrote:

    I agree, Apple employees have been on vacation the past three years and clueless of what to do next.

    How stupid is that... everyone knows what Apple is up to!!!!!!!!!!!!!!!!!!!!!!!! America loves the iPhone, china love cheap. Apple is NOT a cell phone company. I like investing in a company that has ZERO debt, 137 BILLION , 137,000,000,000.00

    dollars in the bank. They have patients in battery tech, wind tech , metallurgy and glass tech. They could be making the first home installed windmill....

    They could be inventing the fuel cell for your laptop or cell phone. I love Apple because they change the world and could care less which hedge fund is buying their stock. Wallstreet is now Vegas, not an true investment vehicle. Very sad for America...

  • Report this Comment On March 11, 2013, at 7:52 PM, foxxx333 wrote:

    I would like to know what led Steve to estimate an 18% growth rate for Apple's sales. Compounded at 18% per annum, today's closing share price reaches $1031 in five years, doubling in four years. Apparently the market's assessment does not endorse such a lofty figure. OTOH the average P/E multiple for the S&P 500 hovers around 17. Should Apple's current P/E have been 17 would imply a current value of $774. I think Apple is an above average income producer. Further, Apple may release new products that will generate new revenue streams. I expect those expecting further declines to be disappointed, especially those who remain short. Disclosure: I am long AAPL and short AAPL puts.

  • Report this Comment On March 11, 2013, at 7:54 PM, Cushing1 wrote:

    AAPL profits and huge cash holdings will allow continual dividend increases, probably 10% or more each year. If it elects a stock split, AAPL could join the DJIA.

  • Report this Comment On March 11, 2013, at 8:07 PM, TMFTopDown wrote:

    @Foxxx333 --

    The 18% figure estimate is the analyst consensus of what Apple is expected to grow its earnings per year over the next five years.

    If Apple pulls this off and grows its earnings by an average of 18% per year over the next five years, it puts shares in strong position for P/E multiple expansion. Right now it's P/E is sitting around a 50% discount to growth expectations.

    Thanks for your comment!

    --Steve Heller (TMFTopDown)

  • Report this Comment On March 11, 2013, at 8:25 PM, thunderboltnova wrote:

    Thank you for recommending this stock. I have 200 shares on margin and I'm sweating it out. Glad you all are patriotic and buying this. Cook the CEO is a great guy and will reward its shareholders. Don't pay any attention to what they say about Apple losing its innovator. It's not true.

  • Report this Comment On March 11, 2013, at 8:49 PM, ubiquityman wrote:

    The issue with Apple is shrinking margins. Even if (big if) revenues grow at 18%, earnings will not if margins keep eroding. In fact, earning may even shrink.

    So, Apple needs another home run. It could be the next iPhone, it could be another product, but the problem with iPhone is that it's showing it's age too much.

    Disclosure: Long AAPL

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