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AAPL STOCK WRITE UP


AAPL (APPLE)

  • P/E: 17.1
  • GAAP DILUTED Y-O-Y EPS GROWTH LAST QUARTER: $.2
  • SECTOR: ELECTRONIC TECHNOLOGY
  • ASSETS-LIABILITIES: 1.67
  • DIVIDEND: .57%

Apple is a technology company famous for their cell phones, tablets, and music store. The company has a solid balance sheet, and a history of earnings growth. The company reported 5/2/2017.
Both revenues and gross margins increased, as well as the expenditure on R&D. Therefore, the company posted quality EPS growth in the past quarter. The revenues and EPS beat wall street expectations, and revenue missed estimize's consensus expectation. Cash flows, and accounts receivable, however, decreased in the last quarter. Inventory, which some consider to be a red flag for technology stocks, also increased.
Tim Cook has been employed by Apple since 1998, and held the title of CEO since 2011. He is also on the board of directors with Nike. According to IDC, Apple's market share in the cell phone business has been steadily declining since 2015. The iPhone is the most successful product made by the company. With its increase in investment in R&D, the company is likely trying to drive innovation to recapture market share. If iPhones can gain popularity again through innovation, the company has a large amount of room for growth. Apple has a low price-to-earnings multiple, signifying that the share price is stable with the current decline in market share, so the company's share price could rise exponentially, if Apple's business, and expectations for future business, can grow, rather than shrink, again.
Prior to its 6-for-1 stock split, Apple hit its high in 5/2015 in the low $130s (in comparable share price terms), and has finally surpassed these levels, 2 years later. The company has a low price-to-earnings multiple, which coincides with its slowed growth, and has emboldened its attempts to increase business through increased R&D. Revenue and income increased in the last quarter, which could be a sign that the business is expected to have a good growth rate, making its share price undervalued going forward.

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