Is Apple’s Pullback A Buyer’s Discount?
Apple’s (NASDAQ:AAPL) stock has fallen 10 percent since September 20th, which many investors have taken as a sign of worry, but Jim Cramer chooses to call it an opportunity to buy. In a note sent to subscribers of his TheStreet.com research, Cramer said that with new products in the pipeline and the iPhone 5 clearly seeing impressive demand, the time was ripe to invest in Apple.
“We think this is a buying opportunity for the long term — a 10 percent discount for a company trading at ten times, excluding cash, with a very strong product profile that just enjoyed a record launch with 100 percent growth in pre-orders for its iPhone 5,” Cramer wrote.
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He added that the iPhone 5 was clearly experiencing supply constraints and not demand issues, and that sales figures fell short only because analysts’ expectations had become too aggressive: “Several surveys have shown that 75 percent of the Apple Stores are out of the device, and that there is still a three-to-four-week wait at the online stores. The 5 million units sold in the first weekend was a new record, coming in better than the 4-million-unit comparison for the iPhone 4S.”
Cramer said he was also looking forward to the new products the company had lined up for release in the next few months, especially the iPad Mini, and was keeping his hopes up for a full-fledged television to be announced soon. “Apple also has strong upcoming products in the iPad Mini, for the new refreshed iPad, and for the eventual iTV,” Cramer said. “The company also commands huge cash position at $120 per share. That’s not to mention the powerful ecosystem that surrounds all of Apple’s products.”
Apple shares finished the trading week Friday at $629.71.
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