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Why Apple Stock Is A Bargain Now

Published 01/26/2020, 07:40 AM
Updated 07/09/2023, 06:31 AM

Millions of investors believe that they have to search for the one stock in thousands that's relatively unknown. And they've been led to believe that the cheaper it is, the better.

Not so.

The real way to make money from stocks is much different. But you might not hear much about it, because Wall Street doesn't want you to know it.

In fact, Wall Street wants you to drop good stocks like a hot potato… so they can pick 'em up and ride into the sunset with your money in their pockets.

Today, I'll show you what Wall Street won't, so you'll know how to make the kind of profits that will grow into substantial wealth:

Finding the Right Stock with the Right "Stuff"

The real key to investing is not finding the one unknown stock that can shoot your portfolio into the stratosphere. It's about buying large-scale companies connected to one or more of the six Unstoppable Trends we talk about frequently.

Not only are they tapped into trillions, but they can continue to grow exponentially for decades to come.

When you own companies like that, you don't have to sell when they hit new highs – but Wall Street tells you otherwise.

Apple

The company is a cash cow, and contrary to what a lot of folks want to believe, it's just beginning to hit its stride.

The company has a deep "competitive moat" – a term Warren Buffett likes to use to describe a company's ability to remain competitive – and with an estimated 1.5 billion devices out there, that's something that won't go away anytime soon.

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Apple's (NASDAQ:AAPL) got a huge customer base of 1.5 billion "super customers" who want damn near everything the company produces and who will spare no expense buying… phones, watches, subscriptions, services, and more.

Profit margins are routinely above 20%, which means the company produces $712 million in sales a day if my quick back-of-the-envelope calculations are in the neighborhood.

According to CEO Tim Cook, Apple (NASDAQ:AAPL) may control as much as $313 billion of the healthcare data market within the next seven years.

My point is that Apple is a bargain at $317 a share.

In fact, I think it'll hit $400 by the end of this year, which is saying something, considering I told you it would double to $300 the same time last year… and it did!

Of course, Wall Street is telling you otherwise…

This Market Won't Wait Around for You

Here's the thing.

This is a market where there's no time to go slow.

You have to be "in to win…" or you won't win.

It's really that simple.

Wall Street wants you to believe Apple is old news, and the pre-earnings reports about how the company will miss earnings, or sell only so many iPhones, are already starting to trickle across the Internet.

They're wanting you to sell or give up hope – if you haven't already – because that's how they clear the decks for themselves… by making you think this is complicated. That way, you'll need their "guidance."

What a load of nonsense.

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Case in point: Analysts expect consensus earnings per share of $4.53 when Apple reports on Jan. 28, and – to my point – they've been wrong for a long time. Apple (NASDAQ:AAPL) has beaten revenue and earnings estimates for the past four quarters and has a long history of "surprising" the Street to the upside.

I think the number tops $4.80, or possibly even $5 a share.

The time is NOW.

Missing out is simply something you don't want to do.

I believe short-sellers, perma-bears, and folks who just can't move beyond the whole iPhone thing are going to pooh-pooh Apple leading into earnings. Their goal is to create a downdraft by convincing the weak money to sell.

That's a perfect opportunity to pick up shares. I suggest you go hunting in the $300 per share arena – as in buy shares for $300 or less.

Or consider using the same dip to sell a "bullish put spread," which is a combination of options that will profit when Apple resumes its march higher, but strictly limits your risk in the meantime if it doesn't or I am completely wrong (which is possible).

This takes far less capital to do, gives you a degree of control, and keeps risk to razor-thin levels – which I like a lot at a time when the markets are overdue for a short-term pullback generally speaking, never mind our discussion on Apple today.

In the meantime, if you're eager to trade Apple, you could use the same dip to buy just a few shares of Apple stock and potentially make out like a proverbial bandit. Many investors don't think this is "worth it" and tell me they'd rather have Apple's latest and greatest iPhone, iPad, or Apple Watch because "at least they'll get to use it."

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Talk about shortsighted!

Let's crunch some numbers. An original iPod would have set you back $399 at the time. But had you plowed that $399 into Apple, you'd be sitting on a staggering $93,222 in Apple stock today.

Apple does a fabulous job with its money.

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