AAPL: Should You Buy Apple? Follow-Up From Our Earlier Advice

A few months back, we published an article titled “Is This the Time to Buy Apple” in which we said that the stock was offering a tremendous amount of value when it was trading at $408 per share.

Many of our readers have asked us to do a follow-up, would we continue recommending Apple Inc. (NASDAQ: AAPL) at this point?

 

Since our article was published, the stock is moved up significantly, with the high reached in August of just over $471. While the easy money might be over, there is still potential for more upside.

With the stock trading at $454, showing a return of over 11% in just four months since the article was published, it has moved quite a bit over a short period of time. Considering the size of the company, some consolidation should be expected.

The stock is now hitting its 200-day moving average, which is a normal point of hesitation. However, notice that in late July the stock broke up out of its downward trending resistance line, a significant occurrence. And just above the 200 day moving average is the $480 area, which is significant as it was both resistance on the way down and up over the past few months. A move above that point will really drive funds into the name.

We find it interesting that the stock has moved up without any new product announcements. We think that there are several new items that will be introduced this fall, and as speculation mounts we could see additional flow of funds into the stock.

While each investor needs to conduct their own due diligence, if Apple does come out with a new product, we could see a lot of interest generated which will drive other investors into the stock. Even with the move up since our article, it still only trades at a forward PE 11.

With the all-important holiday season coming up, it will be interesting to see how Apple’s products match up versus the competition. Any incremental improvement would be a huge positive for shareholders.

If you would like to know how we would create a trading strategy using companies like Apple, then check out our Flagship Newsletter or the Aggressive Investor Newsletter. Or we can teach you in a one-on-one coaching session how to create the ideal risk reward trade for this stock.

If you know anyone who thinks that Dividend Stocks are safe, do them a favor and have them read this article on BehindWallStreet.com. 

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By Joel Laceda - August 12, 2013 BehindWallStreet.com