Apple traded stagnantly in the short term, but is up 25.6% over the last 12 months, while continuing to pay a dividend to shareholders. When I read over some Apple news last night and got myself caught up on the current events of the company, my perma-bullishness towards the company remained intact, as I found three other specific angles as to why it would be a good time to be an Apple shareholder right now.
Aside from continuing to be the most rock-solid company arguably in existence today, here's three niche reasons that I think Apple still remains a good fundamental buy.
1. Apple TV Will Handle Amazon Fire, Roku and Google (GOOG) Chrome
I'm predicting that Apple TV is going to handily take care of Amazon's new offering in the area. Already, comparisons are being made.
Mashable, which is awesome at doing these comps, was the first to put out an article yesterday comparing the different players — you can read the entire article here.
So, while we can see that Amazon is certainly going to be a competitor, there isn't really much that sets it apart from the others, aside from its direct connection with Amazon users and those passionate about the Amazon brand.
- Warning! GuruFocus has detected 3 Warning Signs with AAPL. Click here to check it out.
- AAPL 15-Year Financial Data
- The intrinsic value of AAPL
- Peter Lynch Chart of AAPL
Apple is talking about gaming controller support coming on its new Apple TV model, as I've already reported:
Game controller support is going to be crucial if Apple wants to even begin to think about going after Xbox. Not that the games will all be ported over, or even available at first - but, it's definitely the very beginnings of a foray into video games, the key to what is keeping Microsoft in my, and many other, living rooms.
The good thing is that Apple has a head start. The success that the company has had over the years with tablet and mobile has created a loyalty and familiarity for the brand name. When Apple launches its new set-top box (expected in the first half of 2014), it's likely to do exceptionally well and be the de facto choice for many consumers that are already part of the growing constituency of customers that have catalyzed Apple's meteoric rise.
I'm predicting that Apple handles Amazon and company for a couple of reasons. Number 1, I think that Apple's recent comments about Apple TV "not being a hobby" anymore are likely alluding to a bigger, better Apple TV coming down the line this year.
"It's a little more difficult to call [Apple TV] a hobby these days."
-Apple CEO Tim Cook
Further, Apple already has the advantage of having its ecosystem in homes everywhere. There aren't too many people that have a house full of Windows PCs that will go out and buy an Apple TV. Conversely, those already hooked on the Apple brand are more likely to choose Apple simply for the simplicity and brand loyalty.
2. There Are Likely More Buybacks Coming
Since Apple released its first enormous buyback, shareholder incentives have been in the headlines non-stop for the past year for Apple. Catalyzed by one Carl "I'm a shareholder so give me everything" Icahn, the buzz around unlocking more cash continues to haunt Apple. Eventually, it's looking like they're going to have to do something about it. That, in turn, will likely be lucrative for Apple shareholders and continue to boost the stock's price.
Gene Munster of Piper Jaffray said in a note to investors on Wednesday that he expects Apple to announce an increase for its share repurchase program, as well as its quarterly dividend, in its next earnings report on April 23. Munster said most buy-side investors agree with this line of thinking, representing Wall Street's expectations going into the announcement of March quarter results.
According to Munster, this belief is likely already priced into shares of AAPL, so any announcements come April 23 may not have a significant effect on the company's stock price.
Apple has been under investor scrutiny for sitting on a pile of cash that was at one point near $160 billion. Facing pressure from Wall Street, the company responded by buying back billions of dollars worth of its own shares, and also paying out a quarterly dividend that is currently at $3.05 per common share.
3. A Wide Array of New Products Coming
In addition to the system for vehicles that Apple has just laid out, we're seeing the tip of the iceberg of a new catalogue of Apple products that will be coming down the pipeline this year.
Aside from that, those who read me know that I'm predicting Apple's iTunes Radio to be the only streaming music service that people will give a damn about in a couple years' time. With an expanded catalogue and instant reach to everyone who religiously follows the cult of Mac, it's a shoo-in to knock out Pandora (P) — with others like Spotify likely to follow.
Remember, Apple already dominates the entire music industry with iTunes. Its hostile takeover of streaming radio is next.
Finally, let us not forget about Apple's coming foray into biometrics and watches. I've often argued that the reason that Apple is taking so long for a watch offering is due to the fact that when they do release it, I expect it to be worlds better and worlds more functional than the offerings that we currently have. Its obvious competitor would be the Galaxy Gear smartwatch from Samsung (OTC:SSNLF). I'm predicting Apple's offering — similar to how the iPhone was when it came out - will blow the doors off of anything we've seen so far, in true — old school — Apple fashion.
I continue to contend that Apple is one of the best long-term investments you can put your money in and these three reasons should account for reason to keep your money in the company for quarters to come. The company still has massive growth potential, namely through Mac and ecosystem, and it dominates the music business. With the addition of a Spotify-like service that is being rumored, Apple has nothing but continued room for growth and innovation ahead of it. Apple is going to easily handle Amazon's TV offering, will likely continue to buy back stock, and will make an innovative impact with the new products they have coming down the line. I am bullish long term on Apple.