Six Reasons Why Apple's Still a Buy
Monday's Gartner report that showed weakness in thesmartphonemarket failed to identify the elephant in the room thatthe3GiPhone wasn't even available in Q2. Instead ofidentifyingthisprincipal reason for the slower smart phone growthnumbers,Gartneroffered up a misleading conclusion,
"The current economic environment continues tonegativelyimpactthe market, limiting consumer spending andreplacementpurchases ingeneral."
What should have been said is that all competitors totheiPhoneare seeing their growth rates diminished. It seemslikeeveryonewithin the industry is trying to find alternativeexcusesfor theirbad performance, they just can't come out and saythatit's becauseof the iPhone. 
Asan investor, youmust understand this fact. After themisleadingGartner report themarket sold off Apple (AAPL) with therest of the smart phone groupina practice that has become all toocommon in 2008-throwing thebabyout with the bath water.
Lone Peak Asset Management (lonepeakportfolios.com)hasofficiallyput Apple on our conviction buy list. Thecurrentconsensus on thisstock can be summed up by two recentarticles.The first, written byJim Goldman of CNBC infers that thisstock issuffering fatiguebecause of too much hype. Goldman, who isa longtime Apple bull,wonders if the company is a victim of itsownsuccess. The secondarticle, written by Jim Cramer, statesthatApple is in a bear marketand will be for some time. Westronglydisagree. This is not the timeto be jumping from thestock, it isthe time to be buying for itsseasonal run. Here arethe catalysts:
1) The Steve Jobs health debate is coming to an end.
2) Investors have figured out that the P/E method ofvaluingApplestock is not accurate. Accuracy will be restored asinvestorsfocuson P/Free Cash Flow (link).
3) Seasonality is on Apple's side. For the past threeyears,Applestock has averaged a 45% return between now and theholidays.This isApple's time to break through the $200 barrier.
4) International iPhone sales will be boostedfromdistributiondeals in Russia and China. The iPhone willreplacelaptop computersin many emerging markets.
5) Microsoft (MSFT) will continueto lose market share to Apple (link).Mac sales could reach3million in the current quarter.
6) Apple's new game plan of gaining market shareovermargins(link) will begin to playitselfoutafter Tuesday's event. This company is at a positivetippingpoint.
The best time to buy Apple is when sentiment is contained.Wearein one of those moments. Don't be a seller when you shouldbeabuyer.
Disclosure: Long AAPL
Posted by SeekingAlpha
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