The Motley Fool’s Munarriz: Buy Apple, Sell Microsoft

invisibleSHIELD case for iPad“We all saw the passing ships last week. A buoyant Apple (AAPL) overtook a diminishing Microsoft (MSFT) to become the country’s second-most-valuable company in terms of market cap,” Rick Aristotle Munarriz writes for The Motley Fool.

“The only sensible thing to do right now is load up on Apple and dump Microsoft,” Munarriz writes. “Heresy? Blasphemy? Truth.”

“Shares of the Cupertino cult leader have more than tripled since bottoming out 17 months ago. The stock is nearly a 20-bagger over the past six years. Equities that rack up significant gains often carry bloated valuations, but that’s just not the case with Apple. It’s more than earned its upticks, as its attractive earnings-based multiples attest,” Munarriz writes. “Apple is fetching less than 20 times this fiscal year’s projected profitability, based on last night’s close. The company’s trading at a reasonable 17 times next year’s bottom-line estimate.”

Munarriz writes, “Oh, and keep in mind that Wall Street’s expectations are a moving target. Apple has consistently smashed through analyst models, forcing the pros to revise their numbers higher.”

“Close your eyes. Imagine where Apple will be in three years. Will there be more iPhones out there? There should be. Even before considering an international push, the inevitable end of AT&T’s exclusivity will make this a game changer for Verizon and any other carrier fortunate enough to market the smartphone that everyone secretly craves. In the meantime, iPhone revenue still soared 124% in its latest quarter,” Munarriz writes. “After selling 2 million iPads in less than two months, the future seems bright for Apple’s latest drool-worthy gadget.”

“iPod unit sales suffered a 1% year-over-year decline in Apple’s latest quarter, but the average price per unit rose sharply, pushing revenue growth into the double digits. Besides, since higher-priced iPhones and iPads double as iPods, this is still technically an expanding market,” Munarriz writes. “Then we get to Apple’s roots in computing. You’re not hearing a lot about Macs and MacBooks, but Apple sold 33% more computers during its latest quarter than it did a year ago.”

Munarriz writes, “Whether Apple’s innovative products carve out new markets or cannibalize existing ones, the company has found itself during Wall Street’s lost decade. You’ll be surrounded by more iPhones, iPads, and Macs in three years — I can practically guarantee it.”

Much more in the full article here.

19 Comments

  1. “Apple is fetching less than 20 times this fiscal year’s projected profitability, based on last night’s close. The company’s trading at a reasonable 17 times next year’s bottom-line estimate.”

    An estimate that is wildly off the mark. I love those guys. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  2. What an exquisite sense of timing.

    When Prince Alwaleed and I was buying every share of AAPL we could afford (Alwaleed somewhat more than me), it was after Jobs had come back and his influence was yielding brilliant new products like the iMac, OSX, and something call an iPod. Apple was making money, had no debt, and $1.5B in the bank. Which I guess was why Motley Fool hated it, and every dumbass analyst declared they were going out of business.

    Ironically, after rising by a factor of 33, AAPL is still a buy.

  3. In 5 years Apple is up about 600%, Hewlett-Packard Company is up a 125% (Dell is about down -60%) and Microsoft got up to about 40% in 2008 and is now down to about the same 0% growth after 5 YEARS! AND YOU SEE IT NOW!

    It is called DEAD MONEY!

  4. Yes, ChrissyOne. I second your “No Shit?” What gave them the first clue?

    $26.05 today
    $23.70 in Jun 2, 2005
    $26.85 in Jun 2, 2000
    Yes, they had a big run up into their 2000 Y2K disaster that they caused. THAT WAS 10 YEARS AGO. Now they see it. Clueless idiots! IT IS DEAD MONEY NOW!

  5. See Apple’s chart:
    http://finance.yahoo.com/echarts?s=AAPL#chart1:symbol=aapl;range=my;indicator=volume+macd;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

    Went from low $30’s in the Y2K in 2000 (Yes, I got my first shares at that $64 a share price) and dropped to $7 something soon after the bubble. (Yes, I got more on the way down.) And in 2003 it started this tsunami surge up to today’s $260.64. I call it my 401K. Hope you got some too!

  6. “Buy Apple, Sell Microsoft”

    So does that mean all of us are ahead of our time? We’ve been telling people to do this for well over a decade, with detailed justification.

    Or is it that stock analysts are so out-of-touch, behind the time?

    It’s good to see they are at long last starting to catch up and catch on.

  7. “Shares of the Cupertino cult leader…”

    Isn’t it fascinating that Apple is the #1 technology company in the USA and dipshites like this are still desperately clinging to the ‘CULT’ mythology?

    Just laugh.
    ;-D

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