Stock to Avoid: Apple Inc (NASDAQ:AAPL)
Writing for Forbes, contributor Peter Cohan suggested for investors to avoid Apple Inc (NASDAQ:AAPL) stock.
Why?
- Tim Cook was ineffective to lead the company in introducing highly transforming products. His portfolio as Apple Inc's CEO was all product and software updates as compared to Steve Jobs' iPod, iPhone and iPad.
During Jobs' leadership, there was consistency with Apple Inc's revenue growth at 44 per cent. With Cook, still there was consistency, but, consistency of slow revenue growth at 26 per cent.
Cohan noted that in 2013, Apple Inc's revenues decelerated at 9 per cent.
- iWatch and iTV are ho-hum ideas said Cohan. After years and years of talking about iWatch and iTV, these products still fail to boost Apple Inc (NASDAQ:AAPL) market share.
- Strategy Analytics report that Apple's market share plummeted from 19 per cent to 15 per cent noting that Samsung snatched 32 per cent of the overall smartphone market.
- Citing Bloomberg's calculation - Apple Inc's sales peaking 6 per cent in 2014 to $181 billion and another 6 per cent in 2015 to 192 billion - Cohan thinks that Apple Inc (NASDAQ:AAPL) shares are overvalued.
Why not?
On the other side of the coin, analysts are seeing promising reasons to still bet on Apple Inc (NASDAQ:AAPL) for long term investment.
- Apple Inc's products remain popular to the 'future spenders' market - the teens.
In a report from investment bank Piper Jaffray - Spring 2014 teen Survey - iPhone is the smartphone choice for teens in the US.
More importantly, these future spenders are excited about the iWatch.
Out of the 7,500 teens surveyed for the report, 17 per cent said they will surely buy an iWatch especially if Apple Inc priced it at point below $350.
Senior research analyst Gene Munster noted that an Oct 2013 survey of the general public showed only 12 per cent interested buyers of the iWatch. Munster said that an increase in teen buyers alone was parked by the nearing product launch. Apple Inc will sell approximately 5-10 million iWatch in just a year of its introduction, Munster predicted.
In the case of the iPhone, 61 per cent of the surveyed teens own a version of the iPhone - an increase from 55 per cent in fall 2013.
Sixty-seven per cent of the surveyed teens said they still plan to purchase the next iPhone especially if it comes with a larger display screen.
- Apple Inc. has signed a deal with the world's largest telecom carrier, China Mobile Ltd. (NYSE:CHL). Analysts see this as just step one in Apple Inc's plan of dominating the emerging markets.
In a report dated April 7 2014, Cantor Fitzgerald analyst Brian White said that people from China and Taiwan are expressing impressive enthusiasm for the iPhone 6.
The people he talked with in China and Taiwan are mostly using Samsung devices because of larger screen, however, they said that they are more than willing to shift to iPhone 6 if it comes with a larger screen.
White put a price target of $777 a share price target of Apple Inc (NASDAQ:AAPL).
- Health-related patents like pulse monitors, glucose sensors and pedometers from Apple; as well as "Sports monitoring system for headphones, ear buds and/or headsets" made UBS analysts put a $625 per share price target for Apple stock.