Liftoff to $500

Stock (Symbol) Stock Price

Apple (AAPL)


Data is as of Expected to Report Sector

February 1, 2012

Apr 20


Sharek’s Take
David SharekNote: the data in this article, charts and tables is from February 1, 2011 when the stock was $457. I’m writing the article on February 14th after the stock hit $500 yesterday.
Apple (AAPL) stock is finally tearing it up. This stock has been undervalued for YEARS. Undervalued by at least 50%. Now the stock is on a tear because Apple just posted earnings up 116% while obliterating estimates. Althouth people might think the stock’s too expensive, AAPL has a P/E of only 11.
After reporting earnings, AAPL’s CEO said growth in China is “staggering”. China will fuel growth in 2012. In 2013 TV’s could be 11% of Apple profits — and provide the company with the next catalyst for growth opportunity. 
One-Year Chart

Here’s the one-year chart of AAPL. Sure the stock’s made gains but the P/E in the chart is only 11.
Look at the Annual EPS Growth on the right side of the chart. From $0.36 to $42 in eight years — that’s a 100-fold move.

Earnings Table

Profits jumped 116% last quarter. Revenue growth the past nine quarters has been: 32%, 49%, 61%, 67%, 71%, 82%, 82%, 39% and 73% last quarter.
The best news in this report was AAPL annihilated analyst estimates. The company made $13.87, trouncing the $9.68 estimate. Previously, the most the company ever made in a quarter was $7.79 — so last quarter was almost double the old record. For comparison purposes, AAPL made $15 in all of 2010.
Annual Profit Estimates jumped big time. With a P/E of only 11, the stock can’t get any cheaper. Huge upside and little downside risk.
Quarterly profits surged  — the next three quarters rose by more than a dollar each, and profit growth is set to average 44% during that time. Also, AAPL has a history of beating the street so profit growth of 50% or more could be headed our way. 

Fair Value
AAPL is $500 but its still a long way from its Fair Value. I think the stock can make a parabolic move higher now that it has momentum.
Ten-Year Chart
Such a pretty ten-year chart. You could take a line and put it on the stock price from 2004 to today and see little deviation. The stock quickly regained traction after the stock market crash in 2008 & 2009.
Yearly EPS Growth is much higher than Yearly Stock Growth. That tells me the stock has some catching up to do. The P/E verifies this.
Power Ranking Bottom Line
Growth Portfolio

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Last quarter was Apple’s best quarter ever and pushed the stock into new high territory. The stock is still the most undervalued in the market and is set up for a parabolic move higher.
AAPL is the best stock in both the 20 stock Growth Portfolio and the 10 stock Aggressive Growth Portfolio Power Rankings.
This is the best investment in my lifetime.
Aggressive Growth Portfolio

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