Apple’s a Good Buy

Stock (Symbol) Stock Price

Apple (AAPL)


Data is as of Expected to Report Sector

May 11, 2015

Jul 20 – Jul 24


Sharek’s Take
David SharekApple is one of the most undervalued stocks I follow. I think AAPL could go up another 27% this year and 36% by 2016. What’s fueling the growth is the iPhone which had sales growth of 55% year-over-year. Emerging markets are doing especially well (sales +63%) but WSJ says smartphone sales in China fell 4% last qtr. Apple is taking share from Google’s Android to achieve results. With a P/E of just 14 the stock is cheap, the company is buying back billions in stock and also just upped the dividend to a little more than $2 a year. Within Apple’s product mix, iPad sales fell 29% and Mac sales rose 2% last qtr. Demand exceeds supply with the Apple Watch, but the company may have scrapped plans for an Apple TV. This stock offers solid upside, but profit growth around the turn of the year is expected to be in the low single-digits. Also, after a quick jump up to the $130 mark, AAPL’s move higher has stalled.  
One-Year Chart
AAPL_2015_Q2Great profit growth the past couple of qtrs, but AAPL is a tough stock to trade so don’t get too excited. Estimates show solid growth the next 2qtrs, but growth is expected to slow into the low single-digits the following 2 qtrs. P/E of 14 makes the stock a good buy.
Earnings Table
AAPL_2015_Q2_EPSLast qtr AAPL put out 40% profit growth on sales growth of 27%.
The company also beat estimates, this time by 24 cents, less than the 54 cents the qtr earlier.
Annual Profit Estimates
 continue to increase at a healthy rate.
Quarterly estimates show good growth the next 2qtrs, followed by slower growth, but these rates are increasing.
Fair Value
AAPL_2015_Q2_PHI feel AAPL can potentially get to 18x earnings, considering its expected to grow profits 13% a year and the dividend is close to 2%. Good upside with this stock, but its hard to handle.
Ten-Year Chart
AAPL_2015_Q2_10yrAAPL is a bit extended in the ten-year chart but the P/E is so low I’m not really concerned.
60% in Power Ranking Bottom Line
Growth Portfolio

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Apple continues to put out solid results, and has good upside potential. Unfortunately the stock doesn’t always move when or where we want it to. Also, profit growth could slow later in the year.
AAPL ranks 6th of 23 stocks in the Growth Portfolio Power Rankings and 7th of 8 stocks in the Aggressive Growth Portfolio Power Rankings.
Aggressive Growth Portfolio

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