Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL): Bull Vs. Bear

Apple Inc. (NASDAQ:AAPL) just continues to take a merciless beating in the markets. The carnage continued Wednesday, as some bad news regarding a key supplier has triggered the stock to fall more than 6 percent at one point today to a 52-week low. And as some negative reports are coming out that Apple might actually post earnings below expectations in its next earnings report due out next week, which followed what was a disappointing report in January (despite a revenue number that was larger than at any point in the company’s history), and with the stock now dropping 40 percent since its all-time high just seven months ago, the lingering question is out there again …

Has Apple Inc. (NASDAQ:AAPL) reached the end of the line as a growth company? Is it time to cut bait, nestle Apple in as a nice blue-chip stock and move on?

Jony Ive, Apple Inc. (NASDAQ:AAPL)

There is a lot of debate that will rage in the coming days, and will probably last until after Apple reports its earnings. There are the bears who are winning in the market, but are they still going to be loud if Apple dips back to the $390 level where it was when CEO Tim Cook first took over the company? There certainly is a case for the bears to continue growling.

Shoot, even a couple of writers who try to make a bull case for Apple Inc. (NASDAQ:AAPL) fall into the trap of having to revert back to bearish qualities in the company and having to defend their stances with “but …” statements. Granted, some of the “but …” statements are pretty compelling, especially at this levle, where Apple could certainly be called a value (gasp!) stock.

But now that the company is reaching levels  that weren’t thought of seven months ago (at least not this quickly anyway), the discussion will likely begin in earnest: At this level, is Apple a buy? is this company the same company that was the most valuable company in the world just a few months ago?

Before you answer and figure out your position on Apple Inc. (NASDAQ:AAPL), let’s look at the bears and bulls on this stock.

First, let’s get the bears out of the way since they seem to be winning over the Apple Inc. (NASDAQ:AAPL) investor class:

* Earnings have been down, and are expected to drop further in this next quarterly report. This can be enhanced with the latest report that iPad Mini sales were likely to tank in anticipation of the refresh later this year.

* The legendary, lofty profit margins are shrinking and likely will continue if Apple follows through with a mid-range smartphone.

* More cash than the company knows what to do with … literally. Yes, bears see this as a bad thing.

* No definite vision for the company from any executives, including CEO Tim Cook.

* There is no word of any truly revolutionary devices coming down the pike. Everything seems reactive to what customers are saying or what competitors are doing. Except NFC, which Apple has so far refused to utilize.

* The flagship device, the iPhone, is not an innovative market-changer anymore. And with more intense competition and cheaper phones on the horizon, it’s hard to argue for the premium price of an iPhone.

That latter point is certainly compelling, no doubt. And unless Apple Inc. (NASDAQ:AAPL) moves forward with something that takes innovation to a whole new level, the Apple iPhone may very well be just another smartphone in the market … and a very expensive one, at that.

On the other hand, the Apple Inc. (NASDAQ:AAPL) bulls say this:

* Apple’s stock is dirt cheap at 9 times earnings, which is 67 percent below the S&P average of 15 times earnings.

* Willingness to produce a mid-range smartphone shows an ability to be flexible and a willingness to consider growth more important than profits. While that may not look good on the bottom line of the front page of a quarterly report, that certainly could portend some big revenue numbers in coming quarters.

* The Apple management team may not be visionary like Steve Jobs, but it is very smart. Most of the key people who have created the developed the current crop of devices  since 2007 are still with Apple.

So what is the verdict here?

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.