Great companies are few and far between. They offer investors an opportunity to invest for long-term growth. And they generate tremendous cash flows, which can provide the capital for new ideas, while still rewarding shareholders along the way.
That’s a lot to ask for. But over time, many companies have delivered on that promise. One company, however, has managed to stand head and shoulders over the rest while doing so.
That company? Apple (AAPL). The leader in consumer technology is one of the best money-making machines in history. But it just hit what will likely be a tiny speed bump along the way, with the company pulling sales of its smartwatches.
That’s a fraction of the business compared to computers, iPhones, and the iTunes store. It may lead to a small hit for earnings once that happens. However, the rest of the business generates massive amounts of free cash.
Action to take: Buy Apple up to $200. At current prices, shares pay a 0.5 percent dividend, with an increasing history of growth. Plus, the company has one of the largest share buyback programs in history, which helps keep the share price trending higher.
For traders, the March 2024 $205 calls, last going for about $4.55, could see mid-to-high double-digit returns in the coming weeks as shares shake off this latest news and continue their long-term trend higher.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.