Apple Inc. (NASDAQ:AAPL) has had its ups and downs over the past few months, and that’s saying it lightly, but one insightful columnist with Yahoo! Finance thinks that investor psychology needs to be brought into the conversation. Throughout our recent coverage, we’ve increasingly noticed that shares of Apple seem to be caught between the technical and fundamental analysts (see this article in particular), but Michael Santoli’s commentary hits the nail on the head.
In an interview with CNBC’s “Fast Money” today, Santoli, who maintains a rather thought-provoking blog on Y!, said that he thinks Apple is “becoming – slowly – just another stock.” More importantly, the columnist shared that:
“In six months, is this going to be a stock approaching $700 again? That psychology has to change, that in six months, this thing could make your money back. But […] a two percent dividend yield – who thought you’d ever have to talk about the yield with Apple […] it starts to matter a very little bit if you say it yields more than Treasuries, it’s cheaper than the market […] You hope it becomes just something that’s traded because of what’s going on at the company, for its value, as opposed to hopes and prayers and performance reasons and tax reasons and everything else that’s just being handed back and forth.”
In short, it appears that Santoli is bullish on Apple Inc. (NASDAQ:AAPL) at its current price, but is worried that this strategy may not work if the markets continue to ignore the fundamentals. When looking at the basic financial health of the tech giant, it’s hard to miss that shares trade below 10 times forward earnings, and their earnings growth valuation (PEG) is a mere 0.63. Sell-side analysts expect the company to earn roughly $49-$50 in EPS next year, and estimate five-year annual growth to average between 19-20%.
When determining if Apple Inc. (NASDAQ:AAPL) is a buy at these levels, Santoli’s comments about investor psychology must be adhered to. To the majority of value seekers and long term supporters of the stock, a return to rationality is obviously desired, but we’re still waiting for such a shift to occur. Let us know your thoughts in the comments section below, and if you are buying AAPL at the moment, or if you’re sitting on the sidelines.