Apple’s Undervaluation Brought To Light After 2016 Q3 Earnings

Apple (AAPL) announced its third quarter (Q3) results on Tuesday and largely beat expectations. Some key points:

  • Quarterly Revenue: $42.4 billion (beat by $310 million)
  • Quarterly Net Income $7.8 billion
  • Diluted Quarterly EPS: $1.42 (beat by $.04)
  • Gross Margin: 38%
  • $.57/share dividend declared (yield is currently 2.34%)
  • Service revenue grew 19% year-over-year. It now represents 11% of Apple’s revenue (up from 8%).

A flood of positive sentiment and articles came out almost immediately after Apple’s earnings release. Apple stock closed up 6.5% yesterday, which is great because I think the company is undervalued. That said, I initially thought the market reaction was abnormally bullish based on Apple’s only moderate beats, in my opinion. In reality, the beat was simply a wake up call to bearish investors who had allowed a temporary decline in Apple’s growth to rule the stock price.

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Opening a Brokerage Account

Before you can start buying stocks, you need to open a brokerage account. For some, that concept may sound foreign or complex – but it’s not and today I am going to discuss how to get started. There are two core ways to invest your money: self-directed or managed. When I say self-directed, I mean that you have 100% control over your brokerage account. You choose the stocks/bonds/etc. to invest in yourself. Managed money is when you have a professional broker or robo-advisor choose your investments for you. Your investment portfolio becomes hands-off. We’ll talk about managed money and robo-advisors more in a future article. Continue reading

Managing and Budgeting Your Money in the Digital Age

In my emergency fund article last week, I referenced the greek phrase know thyself mostly in context. Well to expand our conception of Greek philosophical sayings, I now declare that to truly know thyself you must also know thy finances. Luckily we are living in 2016 and understanding your financial position has never been easier. You don’t need to be an accountant or financial advisor to understand the basics of where you are at financially. And that’s a good thing because understanding your finances is absolutely necessary to budget, save, and spend your money appropriately.

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General Motors and the Future of the Car Industry

The Auto Industry

Let me start off by saying that my research into the car industry is some of the most difficult investment research I have ever done. There are so many critical factors affecting the industry and its future right now that it is just flat-out hard to get a grasp on. Since the recession and GM’s old demise, the car industry has rebounded nicely. Continue reading

Apple and Skyworks Solutions: Cheap Enough to Buy?

Now that we’ve covered stock valuation for beginners, this is the first [exciting] edition of Stock Analysis Thursday where I will discuss stocks that I have done research on, usually in the same sector. As an FYI, I will tend to be bullish on the stocks I discuss. The reason why is that I will be sharing the research that I’ve already done for my own personal investments. When I come across a deal-breaker characteristic of a stock, I often stop and do not complete my full research into that stock. As a result, I cannot discuss those stocks. That said, in the future for the purpose of this site, I will attempt to complete my research into any stocks I look into and thus there will be some bearish articles too. Enough said, let’s begin. Continue reading

How to Begin Valuing Individuals Stocks

As we start our discussion about stocks, I want to begin by saying that most people should not be investing in individual stocks.  Beating the market is ultimately a fool’s game. Not even most hedge funds can beat the market after fees. Take a look at Warren Buffet’s million dollar bet that over ten years he could outperform a “high-powered hedge fund” team by simply investing in a market fund (VFINX, a Vanguard mutual fund that tracks the S&P 500). The bet is almost over and his investment is up 65.7% compared to 21.9% for the hedge fund folks. That’s a single instance, sure, but the large majority of regular investors lose to the market and that’s the truth.

So if individual stock investing is a fool’s game, why would anyone do it? Well after you secure the funds you need for your future in well-diversified market-tracking investments (more on that in a future article), investing in individual stocks can be a great “game” with your excess savings. If you’re young, that game may end up paying well if you happen to buy into the next Amazon or Apple. And just like any game, if you spend time practicing, you may get good at it! And then, perhaps, you can count yourself in the small minority of market-beaters.

Onto valuation. Continue reading

Welcome

Welcome to the Knight Investor! The goal of this blog is to share some personal finance advice that I have acquired through trial, error, mentorship, and education so that average people can build wealth and passive income. In addition to general personal finance discussion, I intend on sharing my thoughts on specific stocks and investments as I do research on them.

Some background on myself. My name is Zach and I am a 24-year old forensic accountant living in Manhattan. I graduated with a degree in finance and accounting from Villanova University (go Nova!) back in 2014. I opened my first brokerage account on my 18th birthday and have been investing ever since. My investing strategies have shifted significantly through the years and I want to share what I have learned with the world.

As a note, I am not an accredited financial adviser. Do not make any decision solely on what you read on this blog. Do your own research because it is your money and any action you take is at your own peril! I may have an interest in stocks I talk about or recommend. Furthermore, in the future this blog may compensated via advertisements, affiliate marketing, or other methods.

Check out my About page for more information on my background and the start of this blog.