The U.S. markets have been calm so far in 2019, with the S&P 500 and the Nasdaq both rising more than 10% amid plenty of noise about political and macroeconomic risks. All of that noise might discourage investors from buying stocks.
But today, three of our Motley Fool investors will highlight a trio of high-quality American stocks that are still worth buying…
Apple looks beyond the iPhone
Leo Sun (Apple): Apple lost its mojo over the past year as its iPhone shipments declined amid sluggish demand in China. Its new iPhones were widely considered too expensive and lacking in new features, and sales of the cheaper iPhone XR cannibalized sales of the pricier iPhone XS.
Moreover, Apple’s controversial decision to stop reporting iPhone shipment numbers spooked analysts and investors, and the abrupt resignation of retail chief Angela Ahrendts raised questions about its future retail and marketing strategies.
Apple’s ongoing dispute with Qualcomm will also likely delay its launch of 5G iPhones, which could cause less loyal customers to switch to 5G-enabled Android devices. Apple’s Services revenue rose 19% annually last quarter and accounted for 13% of its top line, but it failed to offset a 15% drop in iPhone sales.
Those issues support the bearish thesis against Apple, but its upcoming event on March 25 could excite investors again. Apple is expected to make some announcements regarding its long-rumored streaming video platform and Apple News subscriptions services — which could both strengthen its Services unit and lock in more customers. There’s also a chance that Apple could introduce new AirPods, a new entry-level iPad, and its long-delayed AirPower wireless charging pad.
If Apple impresses investors with its presentation, its stock could rally on optimism about its future beyond the iPhone. After all, the stock is cheap at 14 times forward earnings, and investors can collect its 1.6% dividend as they wait for its long-term plans to pan out.
Can this retail stock keep climbing skyward?
Dan Caplinger (RH): The retail industry has gone through a lot of turmoil over the past several years, and home-furnishings specialist RH has had to make even bigger changes than most in order to adapt to changing conditions among retailers. After having experienced huge financial challenges, RH transformed itself, going to a membership-based business model and focusing on the upper end of the luxury retail niche. The results have been…
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