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Apple: Prudent Pick

10/14/2013 8:00 am EST


John Buckingham

Editor, The Prudent Speculator

We believe that the iPhone will be a terrific seller in markets without carrier subsidies, forecasts value investor John Buckingham, editor of The Prudent Speculator.

We think that a new camera, Touch ID biometric technology, a better high-speed LTE cellular connection, and a much-improved iOS 7 operating system, will make the premium iPhone 5S tremendously popular with consumers around the world.

We are glad that the initial supply shortage concerns seem to be diminishing and that both new iPhone models are receiving generally upbeat reviews from critics and users.

Though shipping delays are pushing many deliveries into November, the company still sold over nine million handsets on the opening weekend.

We also think that the launch of iTunes Radio should be a value-add, and are pleased that the tech giant was able to reach agreement with major Japanese mobile provider NTT DoCoMo (DCM) to finally offer its millions of customers the latest iPhone models.

Additionally, there seems to be momentum in securing an agreement with China Mobile to offer the new phones.

Apple (AAPL) offers a diversified product line that is appealing to business and retail customers, both in price range, and device type.

The stock is very much a value investment, given that it has a low P/E ratio (less than 13 times earnings), a superb balance sheet, a big share buyback program and a generous 2.6% yield.

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