Apple Inc. updated Jamuary 10, 2020

Our report on Apple Inc. is updated with a rating of Weak Buy / Hold at $309.63.

This company was added to the site last January 23 rated Speculative Buy at $153.92. The report high lighted the attractive P/E of 12.9 but also noted that it was then expecting a weak Q1 report.

Amazingly, the stock has almost exactly doubled since then while (and this may be news to most) its earnings per share were completely flat (despite a lower share count). The trailing P/E ratio doubled to a now expensive looking 26. It seems the market looked past the poor earnings growth of 2019 to focus on the the forecast growth from services and new iPhone version releases. The stock also rose along with the market in general.

It did seem odd that a powerful company like Apple had such a low P/E ratio. And that had been the case for years. So, perhaps the rapid increase in the P/E ratio was mostly justified.

Apple of course remains a powerhouse and will continue to grow. Analysts are expecting to see reasonably strong growth when it reports earnings on January 28. But it does seem expensive at this point.

I bought a small amount last January and sold half of it a few weeks ago (too early) and the other half today (for a 99% gain in an RRSP account). Quite possibly I should have kept this high quality company. I will be interested in buying back in if there is a significant dip in the price.

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