Apple (AAPL) reported earnings last month that really impressed investors. The stock bolted higher and yesterday surpassed $600 for the first time since late 2012.
I sold AAPL from the Growth Portfolio many months ago because I don’t think its a growth stock anymore. 2014 sales are currently expected to rise only 6% and Apple doesn’t really have anything new to give consumers. Apple’s television set and the watch never came to market. I don’t even like the iPhone, and feel HTC’s One is superior.
Still, AAPL is on my radar. So let’s see what the stock looks like now.
One Year Chart
This data was compiled on April 30th when AAPL was $592 a share. What’s nice is the +15% profit growth posted last quarter, beating the +1% estimate. The problem is profits in the year-ago period were down 18%, so it was an easy number to beat. Still, at least AAPL beat it — by a resounding $1.45.
Estimates also look solid, with +14% and +13% growth expected the next two quarters. At 13 times earnings the stock is reasonable.
Fair Value
I used to feel AAPL should get a high P/E. At least 20. But the market never gave AAPL that good of a valuation. From 2011 to 2013 the median annual P/E was 12 to 14.
I put AAPL’s Fair Value P/E at 13. It’s 13 right now. Sure the stock can go higher, but I don’t think this is a growth story.
Sharek’s Take
Apple’s had a nice rise, but the stock seems to be fairly valued here and even if it had upside, sales aren’t growing fast enough for this to be a good growth stock. I’ll pass on AAPL here and let the stock run.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
