Join our community of smart investors

Sell Apple before the worm turns

Is now as good as it gets for Apple investors?
Sell Apple before the worm turns

In 1984, Apple (US:AAPL) ran an advertisement promising a revolutionary new computer. In the ad, the blue haze of Big Brother – an unsubtle reference to the then-incumbent computer giant IBM (US: IBM) – was blown to oblivion as the Macintosh saved humanity from technological conformity.

IC TIP: Sell at $115
Tip style
Sell
Risk rating
High
Timescale
Short Term
Bull points

High-quality fundamentals
Shifting to a higher margin, more reliable services business model

Bear points

Discontent among app store suppliers
Supply chain disruptions
Valuation overlooks challenges shifting to services
Increased competition in core products business

It heralded a changing of the guard atop the US technology industry. Apple took strides forward as an innovative computing pioneer. IBM – caught up in regulation and held back by its size – failed to keep up with the pace of change. Since the advert ran, IBM’s share price has trailed the growth of the S&P 500 by about 200 per cent while Apple’s share price has risen 1,000-fold.

To continue reading...
Join our Community of Smart Investors
  • Independent full-length company analysis
  • Actionable investment ideas and recommendations
  • Expert investment tools and data
  • Stock screens from Algy Hall
Have an account? Sign in