Apple: Cheapest Big Tech Stock Despite Market Turbulence
Apple screens as the cheapest of the big US technology stocks. For anyone thinking the worst of the March sell-off is over & it’s time to resume buying dips, Apple looks interesting. But there are health warnings.
At current levels, Apple sits 8.4% below where macro fundamentals say the stock “should” trade. In the chart below when our Fair Value Gap is greater than zero, Apple is rich to overall macro conditions. When it’s below, it’s cheap.
Right now we’re at the cheap end of the recent range.
Currently, model value sits at $232.05. That’s where the stock “should” trade given where macro fundamentals like growth & inflation rates are.
What’s interesting is that eyeQ confirms that the company can be viewed as a defensive bet. Many commentators argue the company is so cash rich & has such a big “moat” that it is a good place to hide in bad times.
On eyeQ, Apple’s stock price wants weaker growth, falling inflation & stress in credit markets. All demonstrate that the stock is indeed a safe haven.
That doesn’t mean it’s immune to the fall-out from the uncertainties coming from Trump’s government. At the end of February model value was $247.66 so model value has fallen 6.3% over March. Put another way, macro conditions have deteriorated in recent weeks.
Putting it altogether, the macro environment is getting worse, but the stock off has sold off by more than is currently justified - a fair degree of bad news is in the price. That could present an opportunity for the more tactically-minded investors.
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