By Zach Scheidt
This post Apple Loves Trump appeared first on Daily Reckoning.
“You don’t have to buy me the iPhone X, Dad… There’s nothing all that special about it.”
This is what my 13-year-old daughter said as we drove home from her cheer practice.
I breathed a sarcastic sigh of relief. And no, there’s no way I would pay $1,000 to upgrade my daughter’s “entertainment device” to the newest iPhone version.
So far, Rebekah’s assessment of the new phone is in line with critic’s review of the phone. Shares of Apple have dropped 15 points — or nearly 10%. And investors are openly wondering if this is “the beginning of the end” for Apple.
Despite the lackluster reviews, Apple is still a strong American corporate icon. Its stock is still an excellent investment. And today, I’m going to give you three reasons why you need to buy shares of Apple in your account today — before it rebounds any further…
Apple Buy Reason #1: A Growing Horde of Cash
At last check, Apple’s cash balance was at a record $261.5 billion dollars. That’s billion with a “B” — a number that is larger than the projected GDP of (not-so) small countries like Venezuela, Finland, Peru or New Zealand.1
Not only is Apple sitting on hundreds of billions in cash, but that level is actually growing, thanks to Apple’s steady profits. Last quarter, Apple’s cash balance grew by 13% year-over-year. And this was a quarter that did not include a major new product launch to drive profits higher.
This huge and growing cash balance makes shares of Apple very attractive to long-term investors.
And although the share price for AAPL moved lower after announcing the new iPhone X, the company’s cash balance did not.
So that means you can buy your portion of this giant cash pile at a discount today. The cash is still in the company’s coffers. You just get a lower price to own a piece of this wildly profitable firm.
Apple Buy Reason #2: A Weak Dollar Makes Apple Stronger
It may sound counterintuitive, but the weak U.S. dollar has actually helped Apple grow profits.
To understand how a weak U.S. currency helps Apple sell more iPhones, let’s look at an example.
A customer in Europe wants to buy an iPhone. At the beginning of this year, it took $1.05 to exchange for 1 euro. If you do the math, you’ll find that it costs this customer about 952 euros to pay for a $1,000 phone…
But today, it takes $1.175 to buy one euro. That’s because the U.S. dollar has weakened, so it takes more dollars for every euro.
Now, the same phone that costs $1,000 in the states will go for 851 euros. In other words, a European customer gets a 100 euro discount from what he would have paid at the beginning of the year. That makes the new iPhone more attractive to international buyers, even if the new features aren’t what everyone was hoping for.
That same scenario is being repeated across the globe.
Thanks to the falling U.S. dollar, …read more
Source:: Daily Reckoning feed
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