Apple Inc. (NASDAQ:AAPL)‘s rapid descent from its all-time high has some investors panicking over their losses and others licking their chops, wondering what would be a great entry price.
My personal perspective with Apple at $430.47 as of this writing is that Apple is:
- Too expensive to be a cigar butt or other form of deep-value pick,
- trading about where it should be if it were a stagnant, no-growth company, and
- facing strong competitive headwinds in industries that it, until recently, completely dominated.
As a result, I’m not buying, but may reconsider if its shares fall farther. Given what’s publicly known right now, $350 a share seems like a reasonable price for me to be willing to pay for Apple’s stock. That estimate takes into account both the new competitive risks it faces and the reality that its balance sheet and operations still remain incredibly solid.
Another way to potentially buy
If you’ve got a bit more cash to allocate to Apple Inc. (NASDAQ:AAPL) than I do, though, there are other options open to you if you’re interested in buying stock but think its shares are still too pricy. There are even ways available now to potentially buy its shares below that $350 mark.
If you write (sell) what’s known as a cash-secured put option, you agree to be obligated to buy the company’s stock at a predetermined price, on or before a predetermined date. As of this writing, the Apple Inc. (NASDAQ:AAPL) January 2015 $420 puts have a bid price of $73.70 and an ask price of $75.50. If you were to write those puts, you would receive around $73.70 per stub. If those shares were to be put to you, your net price to buy Apple’s stock would be around $346.30 per share.