Apple and Retail …Still Underestimated

Ten years ago I started Wallstrip.

I had flown around the country enlisting bloggers at the time to contribute, promote and rally behind this idea of a modern opening bell piece of content.

The idea was to cover one stock at or near all-time highs and dive into the reason I thought the stock could continue rising. Our first show dove into Apple. At the time I was fascinated by Apple and their retail stores. I felt the stores were a catalyst for the stock to continue rising. This was before the iPhone.

It turns out to be a pretty good call (the stock was $11):

Flash forward to today:

1. I love my iPhone 7 which has great battery life, a fantastic screen and a sick camera. These are the most important features most people care about.

2. Apple stores remain incredibly under appreciated to a long term growth story for Apple.

3. The execution by Apple is still relentless and almost flawless – even Samsung imploded this quarter by shipping bad Note phones.

4. Apple is over 11 percent of the Nasdaq 100.

5. Apple has FIVE Netflix’s in cash and has a services business bigger than Hollywood. In a few years their services sales will exceed Disney’s.

6. Apple stores while not as crowded (good) as the heady days of the iPod and early iPhones are more important today as end points for service. As Apple numbers show…services is the future.

Not everything is rosy for Apple.

The easiest number to get worried about today is Apple’s sales growth

Revenue Growth, YoY%$FB: +52%$NFLX: +32%$AMZN: +29%$GOOGL: +22%$AAPL: -9%

— Charlie Bilello, CMT (@MktOutperform) Oct. 27 at 01:56 PM

I don’t care (at least for now).

Apple (and Schwab) are the only two companies in my portfolio that I do not own for sales growth.

Apple is not being valued for it’s sales growth and I believe undervalued for their retail and services opportunity.


Also published on Medium.