To Buy or to Sell Apple Shares, That Is the Question

Apple watchers say the company's stock valuation is too attractive to ignore, even with concerns about Jobs already being factored in. Most analysts trust Apple to have a good succession plan in place, should its iconic CEO be leaving soon, getting back on track and sustaining its record of innovation.

ThinkPanmure analyst Vijay Rakesh says, "We think it's a buy. You haven't seen a valuation on Apple as low as this probably since July or August of '06. It's basically being impacted by near term consumer (weakness)."

Other researchers expect Apple to push out some low-end products, to tap new markets, Reuters reveals. Kaufman Brothers analyst Shaw Wu offers a positive forecast. "The fact of the matter is that Apple has become an institution, a culture, that transcends more than one individual," Wu explains.

"We think the stock is pretty attractive here. A lot of bad news is priced in. It's trading at 10 times 2009 free cash flow. If you factor in their cash, which is $27 a share, or $25 billion, the stock is trading at only 6.5 times. That's very attractive."

"It's actually fairly inexpensive compared to its competition: IBM (IBM.N) and HP (HPQ.N) trade at about at 9 times," he adds. "Microsoft (MSFT.O) is trading at about 10 times. I think Intel (INTC.O) is at 13 to 14 times, and Cisco (CSCO.O) is up there as well. If you look at Apple's growth prospects compared to a lot of these other companies, it's arguably the most promising."

Wu concludes that "[Apple's] fundamentals haven't really changed. Apple still has big competitive advantages." "We think a lot of the innovation, a lot of his style, his thinking, a lot of that has been ingrained into the company's DNA."

Analysts are on the same side of the fence this time around. Surprisingly, even with Jobs not coming back to Apple from his medical leave, company watchers still believe the next six months will be a good test for Cook, allowing Apple to materialize any possible succession plan.

"Even in the worst case that he does not come back [...] it does not imperil the innovation," ThinkPanmure analyst Vijay Rakesh, who also thinks investors are to fell more confident, once the company reports its quarterly results on Jan. 21, maintains.