You Should Buy Apple Stock

Farhad Manjoo thinks Apple still has nowhere to go but up
By Kevin Spak,  Newser Staff
Posted Feb 16, 2012 10:37 AM CST
In this March 25, 2011 file photo, customers wait outside the Apple store in Munich before the start of sales of the iPad 2.   (AP Photo/dapd, Lukas Barth, File)
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(Newser) – You might think that with its stock north of $500 a share, after rising 30% in six months, that Apple has peaked financially. But you'd be wrong, writes Farhad Manjoo of Slate. Apple's price-earnings ratio is still a humble 14—cheaper even than Google, Amazon, and even beleaguered Yahoo. And "not only is Apple not peaking, it is likely not even close to reaching its potential earnings," which are almost too vast for investors to comprehend. "The numbers are just too big."

Apple earns 75% of all smartphone profits, and the smartphone market has lots of room to grow; right now, smartphones account for only three of every 10 phones. Its tablet dominance is even greater, and sales have doubled every year. Sure, some of the magic may be gone without Steve Jobs. "But Apple's future isn't in magic. It's in math," Manjoo argues. "Instead of buying the next iPad, buy one share of AAPL. Unlike the tablet, it will only get better with time."

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