In the August 20, 2018, issue of Barron’s, Rupal Bhansali of Ariel Investments discusses why investors should not own the Apple stock:

People think of Apple as the poor man’s technology stock. At 16 times forward earnings, it is cheap, compared with Facebook and Netflix. But Apple isn’t a technology company. It’s a consumer-electronics company, and consumer-electronics companies have lot of hits and misses. Second, you want to be wary of a company that is losing its competitive advantage. When the iPhone came out in 2009, it was revolutionary. Fast-forward nearly a decade, and the iPhone X was a commercial flop. When you offer a high-end phone, you need high-end differentiation. Apple doesn’t have it anymore.

The bulls will argue that the U.S. is a mature market for Apple and that emerging markets offer a great growth opportunity. In emerging markets, this phone is so overpriced. The per capita income isn’t there to support this phone. And other players are coming up with neat phones at a very competitive price. Even though Apple had a bad quarter in terms of revenue, they announced a bazooka of a share buyback-$100 billion-which is why earnings per share came up. That’s what IBM did not that long ago; General Electric did the same thing. That is financial engineering. You can only kick the can down the road for so long.

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