More Evidence That Apple Is Doing Just Fine

Another study suggests the Apple doom-and-gloom storyline is nothing more than hype.

Mar 24, 2014 at 12:05PM

Despite Apple's (NASDAQ:AAPL) floundering stock price, there are a number of figures and trends that suggest the company is set to continue to grow for years. And thanks to another report of web usage from Chitika, Apple investors can again rest assured that the iPhone continues to dominate in the U.S. and Canada.

Apple Store Tmf

Is Apple worth more than its conservative valuation implies?
Trading at just 13 times earnings, Apple wouldn't need any top-line growth over the next five to 10 years to reward investors. Flat revenue would be enough, as long as Apple can maintain pricing power and continue repurchasing shares and paying dividends. Any top-line growth would be a bonus.

But is Apple really hitting a wall when it comes to growth? Consider some of these key factors that may suggest otherwise.

  • Apple's revenue and earnings per share were up 6% and 5%, respectively, in Apple's fiscal 2014 first quarter from the year-ago quarter.
  • Active smartphones in China, where Apple made a deal with the world's largest carrier to sell iPhones in January, have nearly doubled from 380 million in the first quarter of 2013 to 700 million by the end of 2013, according to Umeng -- talk about a booming growth market.
  • Apple CEO Tim Cook has said the company plans to enter new product categories in 2014.

And here's another reason to add to the list of why Apple investors shouldn't be concerned with the beginning of decline for the Cupertino-based tech giant: Apple is dwarfing Samsung's progress in the U.S. and Canada.

Iphone iPhone 5s.

The 2013 iPhone models in the U.S. saw their share of web traffic among the iOS platform grow nearly twice as fast as the web traffic for Samsung's Galaxy S4 as a portion of Samsung's smartphone web traffic in the first two months following the devices' launch dates, according to Chitika. This is especially notable since Apple's much greater growth was recorded on a larger installed base than Samsung's.

Further, iOS share of mobile web traffic in 2013 grew to 67%, more than double Samsung's 33%.

But can Apple maintain pricing power?
That's the big assumption that stands at the foundation of the thesis that Apple stock is undervalued with top-line growth; without continued pricing power, Apple stock could be a dangerous bet at today's prices. Fortunately, however, there is no considerable evidence that Apple's pricing power for its devices is fading. And to put icing on the cake, loyalty to the Apple ecosystem is as high as ever.

With upside potential to revenue, steady pricing power, and improving share of web traffic in the U.S. and Canada, Apple stock is a solid bet in this pricey market.

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Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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