Time to Buy AAPL (again?)

Apparently this blog is turning into a AAPL stock blog. I guess that shows where my interests are and I shouldn't fight it ;-)

A while ago, I posted this suggestion saying that it was time to buy Apple stock. Subsequently, the stock took off in a tear... just in the wring direction. My suggestion was based on trends that have taken place with the stock for several years and on the strength of the companies business. I still think that the company is the one best positioned to grow by huge amounts over the next few years.

That being said, there are a lot of pressures around the stock: recession, or at least the CNBC fueled fear of it, The fears of consumers that they may lose their homes and jobs, fears of inflation and just about every other fear that can be created around a company.

The most recent pressure on the stock is tied to a reduced order of NAND memory. This is the memory that goes into iPods. The basis of the argument has been written under articles with titles like "Apple 'slashes' NAND orders" and "Apple 'drastically reduces' NAND orders" all feeding into the "Apple is going under" argument that surfaces every year.

I think it's being painted as a different story than it actually is. The orders have been "slashed" and "reduced" by only about 12% of Apple's projected *growth* of NAND orders for the year. All this Slashing and reducing is coming from one NAND supplier, and it appears to be coming off internal estimates, not from some existing order sheet cancellation.

Let's look at things a different way: Apple will only be ordering 127% of the NAND that they ordered last year instead of 132.2% - I get why it's disappointing that the smaller number is bad. but I don't think this is and "end of the world" type number. In fact, it looks pretty good considering all things.

Of course, I'm not the only one seeing this missing piece of the puzzle, Fortune actually has some good points around why this might be less of a bad thing than some people think. Take a look. They also mention that while initially, this may look slightly negative for Apple, it may actually be a positive. With the NAND orders sinking for all NAND providers, the prices drop and Apple catches a windfall of extra profits for the unites that they do sell.

Less could be More.

-Don

Vote for Ron Paul.

If I can't have Gore, then I'll just have to take my constitution back.