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Split Expert Takes a Bite of Apple
09/24/2020 5:00 am EST
Apple shot up immediately after the announcement and has been quite volatile since the split delivery on 8/31, but has now settled back down to below the level of a month ago.
As we noted at the time, Tesla is just too speculative to consider — but Apple is another story. Indeed, it would be nice if we could acquire AAPL during a further dip but it’s impossible to know when that might come.
As a result, I’m going to pull the trigger now. Following our strategy, AAPL will now remain in the 2 for 1 Index for the next 30 months.
Before getting too gloomy over the price we have to pay for Apple, consider these few items. Over the last twenty years, AAPL’s average return, not including dividends, for all 30-month intervals, has been 94%.
Past performance is no guarantee of future results, but the odds seem pretty good that in 30 months, Apple’s stock price will be higher than it is now.
As of this writing, Apple is the largest company in the world with a market cap just under $2 trillion dollars. Microsoft (MSFT) is a distant second. Valuation numbers are higher than the “normal” "2 for 1" company — but Apple isn’t even close to being a normal company.
The company earns over $55 billion dollars a year, after taxes, and those earnings have been increasing at a double-digit percentage rate year after year. That increase will be reflected in its stock price over the coming few years.
In every niche where it operates, Apple’s products set the gold standard all around the world. To cap it off, of all the high tech companies, in my opinion, Apple is #1 in terms of corporate governance, social responsibility, and environmental awareness. I’m pleased to include it in the 2 for 1 Index.
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