Apple at current prices is a no-brainer to own. Yes, the upheaval in China will probably crimp growth this year. I get that. But Apple is already essentially priced as a no-growth company. There is already a lot of disappointment priced into Apple’s shares at these prices. If Apple is able to muster even modest growth over the next two years, Apple’s share price could double and still not be wildly expensive.
Meanwhile, rival Microsoft is looking attractive at current prices as well. Longer term, competitive threats to Office are a concern. But in the meantime, Microsoft is a profitable, cash-rich company trading at a very modest earnings multiple.
Disclosures: Long MSFT and AAPL
Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.