Time for Apple Picking?

The Wall Journal reported today the Apple’s quarterly profits rose 4.9% to $11.03 billion and revenue increased to $52.90 billion. and revenue rose while iPhone sales slipped as shipments fell 1%. This rise in revenue is the second consecutive quarterly increase after three consecutive declines. This reverses a trend of weak sales and falling profits. Is it time to buy Apple?

The better than expected results combined with Apple’s surging cash hoard of $256.8 billion is good news for both the company and investors. The Journal also indicated that Apples returned $25 billion to shareholders in the form of buybacks and dividends. If the proposed tax changes on cash repatriation are enacted, even more cash may be available for distribution.

The above results are positive but the Apple may have a blemish. Shipments of iPhones were down 1% due to weakness in sales in China. Sales in greater China are down 14%. Customers seem to be waiting for the next model which is expected in the fall. Apple is also losing market share to less expensive Chinese phone models. Apple’s stock price is down in early trading today so clearly there is concern that the bad news outweighs the good.

Current Apple stockholders should consider holding on as the Apple may ripen later this year. The seeds for price growth have been planted. Prospective buyers have reason to consider a purchase although it may be an aggressive move at this time. You would be purchasing stock in the world’s most valuable company at a time when the price has risen substantially. Those who buy should do so during down days on the market and in small bites.