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The Case for Apple

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By Rick Walter

Contact Rick Walter @ invest@ucsinv1

After Apple reported earnings in early August of 2017, the stock reached a high of $164 and then subsequently cratered to $149 in late September, due to a series of negative analysts' reports. Even though the stock has consistently performed year after year and have made many investors very wealthy over the years, many investors still award a negative risk-reward ratio to the company and avoid the stock. Based on conservative valuation metrics the stock is still very cheap today.

The issue may be that many investors focus more on the trees rather than Apple's forests of products and services. Although the iPhone is one of the largest segments of the company, it is not the only one. The company also sells a fantastic family of Macs, iPads,  Apple 4KTVs, and a rich ecosystem of Apple Services. A few analysts with dubious inside information claimed that the new iPhones were not selling well and the company had a hosts of supply issues that may not be fixable. Maybe. None of the reports had anything to do with the valuation of the company. 

Apple does not give out information or make public, information about internal global supplier's metrics. Closer reading of many of the reports also showed that they had no reliable numbers or verifiable information about new iPhone sales. Most of the reports were just outright "Noise". 

With a PE ratio of 20 compared to others in its peer group, the stock is still a great buy. The moral of the story is, be careful about making decisions based on the avalanche of bad news that you can find on the web or news alerts on stocks that you own. Many times it is just "fake news".