Why You SHOULDN'T Buy Apple's Stock (Until You Watch this Analysis) #AAPL

should you put your money into Apple let's explore its business and determine whether it's a good long-term investment or not I'm going to share with you a pessimistic narrative and then we're going to look at the business itself and see if the metrics either reinforce that pessimism or debunk it Apple's stock is often considered overvalued with a high price to earnings ratio this can limit the potential for future price appreciation and make the stock less attractive compared to other undervalued options a significant portion of Apple's Revenue comes from iPhone sales if iPhone demand declines or if competitors offer better Alternatives it could negatively impact Apple's financial performance critics argue that Apple's rate of innovation has slowed in recent years with incremental updates rather than groundbreaking new products this could reduce the company's competitive Edge over time the smartphone market including Apple's primary products is highly saturated this saturation limits the potential for growth in key markets like North America and Europe Apple faces intense competition from companies like Samsung Google and Huawei which could erode its market share especially in the smartphone and wearable segments apple is under intense scrutiny from Regulators around the world for issues related to antitrust privacy and monopolistic practices legal battles and potential fines could impact profitability Apple relies heavily on a global supply chain particularly in China disruptions due to a geopolitical tensions pandemics or other factors could affect production and Supply leading to financial losses Apple generates a significant portion of its revenue from China economic downturns political tensions or changes in consumer behavior in China could negatively impact Apple's sales and profits Apple's dividend yield is relatively low compared to other Blue Chip stocks investors seeking income might find better options elsewhere reducing the attractiveness of Apple stock for dividend Focus portfolios Apple has been heavily involved in stock BuyBacks which can artificially inflate the stock price some investors believe that indicates that the company lacks better ways to use its capital for growth okay that gives us our pessimistic narrative but what do the numbers actually say about the business we can see here the company's Financial Health based on its earnings growth which ideally we want to be at 20% or better its profit margins which we want to be at 40% or better its operational effectiveness which we want at 80% or better its average employee value which we want at $400,000 or higher and its debt stated on its quick ratio which we want at 2.5 or better we then can determine how robust the business is by adding the points given to each metric we can clearly measure from a total of 25 points whether the business is healthy enough either disproving our pessimistic narrative or reinforcing it with weak metrics next we can see the opportunities afforded to shareholders in the company important for f folks like you and me who are thinking of buying the stock based on its dividend yield which ideally we want at 4% or higher its payout ratio which we want at close to 0% its cash and its equivalent which we want at $75 billion or higher and stock returns to a maximum of 10 years which we want at 15% or higher we then can determine how much you're benefiting as a shareholder but at the same time how much the company is spending to accommodate these shareholders by adding the points given to each metric we can clearly measure from a total of 20 points whether you're more likely to be seen as an investor of the stock or merely speculating on it third we can see the business valuation of the stock based on its PE ratio which we want as low as possible its PEG ratio which we also want as low as possible its 200 day simple moving average which we want to be -10% or Worse its short float which ideally we want to be as close to zero and the average Wall Street rating which we want to be as close to one as we can get we can then get a pretty good idea whether the stock is too optimistic about its business thus proving our pessimistic narrative or if we're looking at a real bargain by adding the points given to each metric we can clearly measure from a total of 25 points now we can add up our 14 metrics and it'll give us a point total which we can compare with our pessimistic narrative based on a 0 to 70 point scale we total our metrics to get us our business grade if the number is above 35 which is an average business we have successfully disproven our pessimistic narrative making the company a good business to own but if that number is further down the point scale we can be justified in saying that our pessimistic narrative can be justified based on the numbers the company is putting out next we're going to determine the company's intrinsic value I base the intrinsic value on my 30-year intrinsic value model which incorporates a 10% margin of safety since I only look for long-term Investments the longer I project out the more search in I can be of the numbers since I assume after 10 years the company begins to accelerate its decline to the point where it's slow by 5% every year until the end of time which makes a more conservative estimate So based on my model we can see the Stock's intrinsic value as well as its relative value compared to its current price as of this video the scale is from 0 to 100 with 50 points being a fairly priced stock and anything over that means the stock is undervalued relative to its current price I do put some stock into the intrinsic value but only 10% of my analysis accounts for it it's important because I do believe that the intrinsic value is subjective on your belief in the company's future whether you're overly optimistic or if you're extremely bearish on it this is mostly a baseline number you can anchor to before we continue join my patreon you'll get access to every grade for every company I've analyzed it's updated all the time go to patreon.com grth shares or click on the link in the description I'm now going to combine the point totals for the business and the intrinsic value to get our company's final grade we have our pessimistic narrative and now we have our final grade based on these weighted factors to compare whether our narrative matches up with the company the scale is from 0 to 100 with 50 being an average investment and any total above that being a good or even great investment this final grade is my base and it will supplant the pessim istic narrative I drew up at the beginning of this video or it'll reinforce it if the final grade is below 50 now I want to note here about investing with your emotions I know many of you watching our new investors and like many at the beginning of their Journey it can be difficult if you own this stock and my conclusion was different from what you wanted to hear it's important to take emotion out of the equation if you disagree with me in any way you shouldn't take it personally even if you do have a financial stake in the stock realize this if the stock is as good as you believe it is it'll go up regardless of what either of us say so if you're wondering what kind of investor you are you can take my quiz on just that it's a quick 10 question assessment that'll let you know whether you're a value investor a growth investor or anything in between I left a link to the video in the description if you found this analysis helpful consider liking this video and subscribing invest wisely and as always take care of your money