“None of the strategies rated Apple a ‘strong interest,’ but more than one found the stock of ‘some interest,'” Reese reports. “Meanwhile, AT&T earned ‘strong interest’ ratings from two strategies.”
“Here are some of the features the guru strategies like about Apple. Its earnings per share have increased in each of the past five years, showing solid, consistent earnings growth,” Reese reports. “The stock has a relative strength of 87, meaning it has outperformed 87% of the market over the past year. And you aren’t paying much for its dynamic growth. The company’s price-to-earnings relative to growth, or P/E/G, ratio is a mere 0.33, given its 22.68 P/E and 68.83% growth based on the average of the three-, four- and five-year historical EPS growth rates. A P/E/G of 1.0 or less is acceptable, and below 0.5 is great.”
“One last factor worth mentioning is Apple’s debt: It has none,” Reese reports. “Apple may be on the cutting edge of technology, but it is conservative in terms of its financial management.”
Reese reports, “Apple’s stock price is near its 52-week high, so one has to wonder if it has room to move up a whole lot more. Of course, skeptics have been wondering about Apple’s stock price for some time — and they have been proven wrong. Both companies dominate their respective markets and are financially strong, and both are worth considering as additions to your investment portfolio.”
Full article here.
[Thanks to MacDailyNews Reader “Johnny Bravo” for the heads up.]
When it comes to Apple, all the experts are guessing because they don’t have anything to compare it to. No investment comes with a guarantee, but lately Apples is about as close to that as any company.
with a very highly eps of more than $14 in fy 2010 apple’s P/E is still 19, not the 22.68 the author mentiones.
Hmm…that doesn’t give me much faith in their financial strategies. I view AT&T;as a rather precarious pick. They are dependent wholly upon Apple for their recent success, and as soon as the exclusivity of the iPhone is over, they are likely to see some considerable defection. Of course, at that time, the shortcomings of Verizon and others will be exposed and everyone will be whining about them as well. At least then, the pain will be evenly spread around.
Apple is an obvious pick, but his “analysis” only results in “some interest.” AT&T;has an inflated record due to the iPhone that is going to be deflated at some point, but his analysis results in “strong interest.”
I don’t think any intelligent investor will trust this analyst.
@RePlay – The pain AND the pleasure.
It may be at the 52 week high but the 52 week low is coming up fast!
And about $52 of the stock price is the many billions that Apple has in the bank.
A T & T needs Apple’s blessings. Not the other way around and they just dropped the ball again. At some point, Steve Jobs will have had enough of A T & T’s problems and open up the iPhone.
In other words, a P/E/G of .33 means even at this price, AAPL is dirt cheap. Seems nobody wants to acknowledge the powerful and consistent growth of the company, nor the vast profits they are making while single-handedly inventing the 21st century.
With a far more modest and wildly inconsistent rate of growth, Adobe sports a P/E more than twice Apple’s. Go figure. Analysts have focused on the sales of CS5 without understanding how many professionals have to hold their noses to keep upgrading that 20th century hairball. Nor does Wall Street consider Adobe cannot possibly win the battle over Flash.
Wish I had the money right now to get in. Maybe in a month or two.
Apple is going to rule the tech world during the 2010 – 2020 period.
From a pure investment standpoint, the one big weakness in Apple is the cash horde. It only earns about 1% (if that) annually, although other cash might be in short term investments that earn higher. The cash level actually pulls Apple down, since it has shown little interest in using it. There aren’t a lot of investment opportunities that might interest them (Electronic Arts is one which would give me a hardon).
They make so much money, the cash hoard doesn’t go down even with massive R&D;investment. Twenty years ago, they had to invest in their own manufacturing, now they use China, so they make cash hand over fist.
How about a cash dividend. In today’s economy $21/share in a one-time dividend would be wonderful!
Even a broken watch is right twice a day.