“Apple Inc. (AAPL) is definitely ripe for the picking. After reaching a 52-week high of 202.96 on Dec. 27, 2007, the stock plunged to a low of 80.49 on Nov. 20, 2008. (It closed at 82.58 on Nov. 21),” Gene Marcial writes for BusinessWeek.
“It’s time for investors to ‘think different.’ The strong consumer appeal of Apple’s products is widely known, but it is the compelling attraction of Apple’s stock that needs renewed reflection. The case for Apple is simple: Its stock is cheap based mainly on strong earnings and sales growth, and the outlook for further expansion of sales and profits. And the stock’s profile based on such benchmarks as its technical chart pattern and price-earnings ratio affirms Apple’s attraction,” Marcial writes.
“‘We believe Apple’s valuation is compelling, given its cash of $27 a share and prospects for $10 a share in free cash flow in fiscal 2010,’ says Ben Reitzes, tech analyst at Barclays Capital (BCS),” Marcial reports. “He rates Apple, a client, overweight with a 12-month price target of 113 a share. Apple ended its fiscal fourth quarter with $24.5 billion in cash. In that sense, ‘Apple has turned into a free-cash-flow-generating machine,’ says Reitzes.”
Marcial reports, “Based on fourth-quarter results, the iPhone has emerged as the largest revenue and income generator in Apple’s product portfolio, says Charles Wolf, tech analyst at investment bank Needham, who owns shares. He is maintaining his rating of strong buy, with a 12-month price target way above those of other analysts: $240 a share.
Marcial reports, “Of the 34 analysts who track the stock, 27 call it a buy, and five rate it a hold. Despite the gloomy economic outlook, only two analysts tag it a sell.”
Full article here.
bought 2 more!
Wasn’t Ben Reitzes at UBS?
“12-month price target of 113 a share” WTF?
We will see $113 before MacWorld 2009.
When the “press” says “buy” it usually means you should sell.
Because if a stock is hot, there is no doubt to buy it. You’ll know it when you see it.
But when the press needs to “plug” a stock, it usually means it’s being shorted and buyers lose.
First off, most people are cutting back like never before because most of their income is going to over priced mortgages. This leaves little disposable income for other things. Apple is a CONSUMER ORIENTED COMPANY, and the consumer is in SEVERE ECONOMIC PAIN right now.
Yes Greenspan fscked up by keeping the prime too low for too long to defeat deflation caused by the cheap Chinese goods, creating the real estate bubble, but how many times in history does this happen? There isn’t enough experience fighting this sort of thing.
And actuality, the prime again is very low to stimulate inflation, they didn’t learn from the last time!
Since Apple doesn’t really have a “corporate presence” where they provide essential necessary devices for the corporate world, they don’t get to sell HUGE orders for computers and other devices like HP does.
HP’s stock is going UP even in these bad times!!!
Apple COMPLETELY MISSED THE BOAT and essentially allowed HP to beat the pants off of Dell.
Apple had the chance to beat Dell out of the corporate space, because people were getting sick of the cheap Dell experience and crappy XP. But Apple didn’t play, they went to the Consumer Market and now that is failing them due to the economy. Which will last for quite some time as people’s incomes have to rise to pay for expensive housing.
Winter is coming, the new year will bring Inflation caused by the billions of bailouts/handouts etc, possibly even HYPER-INFLATION. People will be VERY TIGHT WITH THEIR MONEY.
This is bad for consumer stocks, so I would wait until the BULL MARKET RETURNS before buying APPL.
This way even if you buy the stock and it tanks a little, it will come back in short time because the market is going up anyway.
But if you buy during a BEAR Market, it could tank soon after you buy it, and stay there or even go lower for many months even years afterwards. All that time waiting for it to come back up so you can sell it is very troublesome experience.
Still under 10 times forward cash flow, with no debt. Get it while it’s a steal!
Warning: I’ll be selling around $300/share, so you might want to get out before I dump. I figure my sale will decrease the share price by about $0.00000000012.
@MacGenius:
You said: “…they went to the Consumer Market and now that is failing them due to the economy.”
Please, provide some proof where Apple is actually failing as you stated above.
There are far more consumers than corporations. Its always been the little guy that makes the difference.