Apple Inc (NASDAQ:AAPL) has been on a downturn over the last two months since peaking at more than $700 per share, but whether it's time to buy the stock yet has had some mixed reviews from analysts. Earlier Thursday, analyst Dominic Chu was on Bloomberg TV to talk about the bearish moves by the stock, and gave his outlook for the future along with concerns from investors about Apple (AAPL) moving forward.
"There are really three concerns they are citing right now," Chu said. "First, tablet market share. The iPad used to be the No. 1 product out there. They still are, but the iPad made up 66 percent of the market at this time last year. Now, it's down to 50 percent." That report is according to a recent quarterly survey by IDC.
"Also, the iPhone 5," Chu continued. "Yes, tremendous demand for that product, but if there's so much demand and they can't meet that demand, can they continue to sell that many phones? And iPhones are key, because they make up two-thirds of Apple's profit. And of course there is management turmoil right now, with (iOS software head) Scott Forstall and (retail chief) John Browett no longer with the company. All of a sudden, you have a very glistening Apple losing a little bit of its shine."
However, Chu was quick to pivot to the positives of Apple Inc (NASDAQ:AAPL) and why it might be a good stock to buy in the near future. "From a price-to-earnings perspective, Apple trades as 12 times earnings, while the S&P trades at 14, so it's on sale compared to the (broader market)." He also pointed out that Apple Inc (AAPL) stock is selling at 3.3 times sales, which is nearly three times the rate of the broader market (a 1.3 ratio), which is a premium, but he added that the stock is currently posting a nearly 2 percent dividend, slightly below the overall market.
What do you think about the fundamentals and the future of Apple Inc (NASDAQ:AAPL) stock? Would you jump in now, strengthen your position, or would you take a wait-and-see perspective as the holiday shopping season heats up? Do you think this is a time for investors like billionaire David Tepper of Appaloosa Management LP to adjust holdings? We'd like your feedback!