Apple Inc. (NASDAQ:AAPL) has made changes recently to the iPhone operating system, with the iOS 7. Others have speculated about an iPhone 5S release, smartphones with bigger screens, and a more affordable iPhone that could be marketed to developing nations. However, Apple Inc. (NASDAQ:AAPL) has not outright confirmed these rumors. That leaves investors questioning what Apple Inc. (NASDAQ:AAPL) might be up to, and whether there is potential for the stock’s price to soar again.
Fear not, earnest investor, Apple Inc. (NASDAQ:AAPL)’s stock has only paused before the next upward swing. And with a share price that has fallen 35% since its high of $705 last September, there is a lot of room for growth. Though enthusiasm for the firm’s latest releases has been weak, even if one of the rumors proves true, this stock could jump significantly in probably a one-day spike, and then gradually climb thereafter.
After all, this is the same company that has essentially changed the way much of the world communicates. Just like how the New York Yankees can’t win every World Series Championship, Apple Inc. (NASDAQ:AAPL) can’t change the world with every new gadget it releases. But be patient, because this is a company at the top of its league.
New release is needed to trigger higher share price
Apple’s financials indicate the firm could be stagnant or drop if it doesn’t release a popular product. The firm hasn’t grown sales in the past year and is actually losing market share. Also, the company is experiencing a decline in profit margin, which fell slightly to 23.46% last year. However, the industry also experienced a slight decline. With a PE ratio of 10.1, investors have an average growth expectation for the firm. If the PE ratio reaches 10.6, investors believe the company has a brighter future, RBC Direct Investing stated.
Others looking to make major releases
As if that isn’t enough to invest in this company, the firm has also released dizzying financial statements. The return on equity is among the highest in the sector. I can’t deny the advancement that Google is openly making, and my optimism about revolutionary products has me on the verge of potentially picking up shares of this stock sometime this month.
Samsung Electronics Co., Ltd. (KRX:005930) has shown that instead of inventing new products, it is able to take technology, tweak it, and market the heck out of it. This company knows sales better than anything, and recent moves to pre-release Jay-Z’s next album only on a Samsung Electronics Co., Ltd. (KRX:005930) app is genius. Furthermore, the firm looks to have tapped the developing world and is able to price its products for that crowd. According to the Hindustan Times, Samsung is subsidizing its price to attempt to build market share in Brazil. Cuts are estimated to be around 30%, the report stated.
Profiting from the developing world would be a huge boost to a stock that is showing signs of slowing down. With a PE ratio of 8.2, investors have a low growth expectation for the firm, as the industry average is 28.3. Also, the firm is losing market share by not being able to grow, stated RBC Direct Investing. However, look for the recent release of the Galaxy S4 Active to change that. The device is advertised as being shockproof and waterproof.
Breaking it all down
Innovation is the name of the game with tech titans, and a few years of a drought in good ideas at a company such as Apple can begin to erode confidence. Stellar breakthroughs can impress the masses and send them flocking to purchase a stake in the company’s growth. However, releasing a product as innovative as the smartphone, tablet and Mac isn’t as easy as pushing a button. There is no app for that, so those already invested in these firms should hold tight until Apple, or another one of these titans, changes the world once again. Those who aren’t invested in these companies can use this period of stagnant growth to purchase shares, before they experience a hike following another breakthrough.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Apple Needs to Invent Something New originally appeared on Fool.com is written by Phillip Woolgar.
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