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I’m not a fan of Apple at these levels


Apple unveiled the latest smartphone model, the iPhone 13, as well as a new watch and iPad on Tuesday.

Here are five experts on what the new product releases could mean for Apple stock.

Delano Saporu, founder of New Street Advisors, said he is adding to his position in the name.

“It’s more just adding on any near-term weakness … We had the Epic ruling [last] week and we saw a little bit of a drawback in the share price, and I think investors that are kind of long-term bullish on a company like Apple should be adding on any near-term weakness … The stock has been rather sleepy for the better part of a year and now investors are starting to bid up. I think one of the reasons why, if you look at it on a trailing 12-month basis, price to earnings are about 29 times, which is lower than most of the FAANG names. I think there’s room for multiple expansion.”

Quint Tatro, president of Joule Financial, takes a contrarian view on the stock.

“It’s had that characteristic of late. When the market is weak, I think people flock to Apple. It’s got a consistent cash flow, it’s a steady name, but I have to take the other side of the trade here. I know it’s not a popular view, but I’m not a fan of Apple at these levels … Forward multiple of 35 is tough to justify when if they hit their numbers those numbers are growing at 10%. Meanwhile, the company has levered up its balance sheet. Now it’s a proxy for the market — 6.2% of the overall S&P. So if people are continuing to be bullish on the market and add passive index funds, it will continue to participate, but I just think there’s too many other opportunities out there that are of value.”

Stephanie Link, chief investment strategist at Hightower, sees the stock as a stable performer.

“I have a market weight. It’s 6% of my portfolio. So I want to go over my skis given the concerns that I have, and, oh by the way, 76% of the sellside likes this thing. Everybody owns this. I don’t know what the incremental buyer is … I just don’t think you’re going to see a rush to see buying in the name. Now, if it were to pull back substantially, I definitely would take a look again. I’ve been overweight the name, but right now I think it’s prudent to be market weight.”

Tom Forte, senior research analyst at D.A. Davidson, said the new iPhone’s secret weapon is that it’s 5G-enabled.

“I think the good news for Apple for this year is similar to last year. The real star of the show is the 5G network. So I don’t think they need to have anything spectacular in the iPhone 13. It’s getting consumers a 5G device as they slowly but surely build out the 5G network. I think it will be very strong sales for iPhone for that reason, which is good news for Apple and its stock.”

Krish Sankar, senior research analyst at Cowen, said Apple should be able to weather materials shortages and supply chain squeezes.

“Apple probably has a better position than most other device makers to weather the [supply chain] storm, so largely I think at this point it’s probably going to be inline pricing similar to last year’s iPhone.”



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Erik Roth is the Director of Enterprise Partnerships at Shipshape Solutions Inc

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