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Saturday, January 25, 2014

Sell Google (GOOG) buy Apple (AAPL)

Make no mistake folks, the next big wave for Apple will be wearable gadgets and medical devices. And if I am correct, the money to be made in the gadgets space (wearable or not) is even more than the revenue Apple takes in from the iPhone. In fact, the iWatch is just a fraction of the business. Imagine for example all the wearable gadgets that can work with either the iPhone or in conjunction with the iWatch. Just in the medical devices business alone, the possibilities are endless. Maybe that's why Apple has begun selling third party gadgets on their site lately. I am assuming they are kicking the wearable gadget tire to test the waters. And if Credit Suisse is correct, the wearable devices and personal accessories industry (in biomedical and fitness technologies) will balloon between $30 and $50 billion in the next 3-5 years from now. My opinion is that these numbers will be upgraded upwards several times once Apple starts rolling out these devices, because like I said, the possibilities (and the revenue from these devices) are mind boggling. Also if I am correct, the market will start to discount all these possibilities. Like I have said before, Apple is not an expensive stock. Currently it sells for about 12x forward earnings. However It can easily sell for 20 times earnings, if the market begins discounting all these possibilities. That means that the stock has the potential for an upward move, even in the absence of an earnings rise. Now if we combine the share repurchases (that by default act as a pillow under the stock), with the possibilities for Apple in the gadgets space, then not only is Apple a safe haven at the moment, but probably a two bag no brainer also.

2 comments:

  1. I truly how it's easy on my eyes and also the information are well written. I am wondering how I can be notified whenever a new post has been made.

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    1. Retta, you can sign up as a follower to the blog to receive notifications. Also follow me at Seeking Alpha. Here is a link! http://seekingalpha.com/author/christopher-f-davis

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