You Probably Own This Company. Is It Time to Sell?

Michael Robinson

Tuesday, November 14, 2023

Every so often, a friend of mine will call me and yell my ear off:

“That’s it,” he’ll shout. “I’m selling my Apple stock. Its glory days are through!”

And every time, I just shake my head and roll my eyes. Then I remind him that if there’s one company he should have in his portfolio, it’s Apple…

And the same thing goes for your portfolio. Today I’ll tell you why.

I Get It

To be clear, I understand where my friend is coming from.

In his mind, Apple’s knack for innovation appears to have run its course. The same thing happens every year. And if you tune in to the company’s presentation every fall, this conclusion actually makes sense.

You see, every September, Apple releases the latest version of the iPhone. But unlike the early years, when the newest model had notable changes — edge-to-edge display, facial recognition, Touch ID — the latest iPhones aren’t that different from the previous version. There’s usually an improved camera, display, or battery life. But that’s it.

It’s this slowdown in smartphone innovation that skews my friend’s perception of Apple, and apparently convinces him to call me up and declare his breakup with the nearly-three-trillion-dollar company.

But make no mistake: Apple is still one the leaders of innovation.

It’s just that you might not have noticed it…

A “CIP” Play

Apple is what I like to call a “constant innovation player,” or CIP. Essentially, it’s a term for companies I believe put innovation at the forefront of every business decision.

We’ve seen the company innovate with respect to tech gadgets like smartphones, portable music players, headphones, and watches. But more recently, Apple has branched out beyond consumer electronics.

It has Apple Music, a streaming service that competes with Spotify and Pandora. It has Apple+, the video-streaming service akin to Netflix and Hulu. It even started making its own chips, ending a 15-year relationship with Intel back in 2020 and electing to power its line of laptops with Apple-made chips.

Last year, though, Apple unveiled its latest innovation…

A feature that could potentially save your life.

The Path to “Network Earth”

With the release of the iPhone 14 in 2022, Apple customers had access to the company’s Emergency SOS service. Simply put, this turned any new iPhone into a satellite link that could enable messaging from remote locations — the kinds not covered by traditional cellular networks.

Being able to connect to satellites from almost anywhere brought Apple one step closer to enabling what I call “Network Earth.”

Why do I call it that? Because we’re at the dawn of an era where nearly every electronic product in the world will soon be linked to a system of interrelated networks.

That’s why the satellite communications sector offers so much potential for tech investors. In fact, Verified Market Research reports that the global satcom market will double in size between 2020 and 2028, reaching more than $131 billion.

News about satellite communications continues to make headlines — just last week, Northrup Grumman was awarded a $732 million contract by the Space Development Agency for 38 satellites…

And it’s this wave that Apple is riding…

Follow the Innovation

For its satcom service, Apple is partnering with Global Star (GSAT), a company with a $2.5 billion market cap. Under the agreement, Apple will cover 95% of the capital expenditures made by Global Star to build its network. The small-cap provider projects to bring in around $300 million in revenue by 2026.

Sure, you could pick up shares of GSAT. But from what I’ve seen, the company has yet to deliver consistent earnings. For regular investors, it’s a bit too risky.

Instead, I recommend buying Apple.

As you’ve learned, this company continues to innovate, whether through new tech gadgets or streaming services or entire communications networks.

I’ll always encourage my friend to keep shares of Apple in his portfolio.

And I encourage you to do the same.

Cheers and Good Investing,

Chief Investment Officer
Trend Trader Daily

Tags: apple