Robert Walberg has penned a solid look at Apple from an investment standpoint for MoneyCentral, part of the MSN Network. Mr. Walberg focuses on some of the companyis fundamentals, including its current valuation, relative strengths of its iPod and Mac business units, and both short-term and long-term potential.
Mr. Walbergis specific focus is:
- Appleis iPod division is performing fantastically
- While iPod sales could continue to grow, at some Apple will lose market share in the music player market
- Most of Appleis revenues are still derived from Mac sales, while Apple continues to lose PC market share
He summarizes with the following:
Itis tough to bet against a company seemingly doing everything right, and thereis no real reason to at the moment. The iPod business remains strong, the PC-side should get a short-term lift from the new iMacs and an operating system upgrade cycle, and the companyis retail store concept will benefit from new openings.
But current multiples suggest that most of that good news is already factored into the share price. So itis unlikely the stock will climb much further.
Mr. Walberg makes one mistake in asserting that Apple has helped lock in consumers to iPod by offering a host of iPod add-ons compatible only with the iPod. In reality, Apple (so far) has few iPod add-ons, and some of those it does offer, like ear-phones, can be used anywhere.
We otherwise recommend this article as an excellent look at where Apple currently stands for investors. All of the points we mentioned are covered in detail in the full piece.
AAPL closed Thursday at 54.45, a loss of 0.86 (-1.55%), on strong volume of 16,585,858 shares trading hands.