Investors advised to buy Apple stock after 'insanely insane' selloff
After eight weeks of Apple's plummeting value, one analyst believes the selloff has reached a point of being "insanely insane."
Brian White of Topeka Capital Markets is baffled by the sharp selloff of Apple stock during the company's strongest quarter of the year. In the latest downturn, the company's value is off 28 percent from its peak in September.
He noted that Apple has delivered annual growth that is 13-fold greater than the S&P 500 over the last eight years. Despite this, Apple trades at a 20 percent price-to-earnings ratio discount when compared to the S&P 500.
"While we don't expect Apple to grow (earnings per share) by 92% per annum over the next five years, we believe 20-30% growth is reasonable based on the company' slow market share in mobile phones and PCs, combined with growth opportunities in tablets and new potential areas such as Apple TV," White wrote in a note to investors on Monday.
Apple had $121.3 billion in cash at the end of its fiscal year 2012, amounting to nearly $128 per share, or 24 percent of the company's stock price. Even if Apple decides to pay out a higher dividend to investors, White believes Apple will still hold nearly $204 billion in net cash by the end of fiscal 2014, which would amount to $212 per share or 40 percent of the current stock price.
"As such, the dividends that Apple can afford to pay out in the future are significant," White said, "and there is no reason why Apple should not currently be paying out at least a 3-4% dividend yield (or $16-$21 per share) versus the current 2% yield (or $10.60 per share)."
Despite recent losses, Topeka Capital Markets is standing by its $1,111 12-month price target for AAPL stock.
Brian White of Topeka Capital Markets is baffled by the sharp selloff of Apple stock during the company's strongest quarter of the year. In the latest downturn, the company's value is off 28 percent from its peak in September.
He noted that Apple has delivered annual growth that is 13-fold greater than the S&P 500 over the last eight years. Despite this, Apple trades at a 20 percent price-to-earnings ratio discount when compared to the S&P 500.
"While we don't expect Apple to grow (earnings per share) by 92% per annum over the next five years, we believe 20-30% growth is reasonable based on the company' slow market share in mobile phones and PCs, combined with growth opportunities in tablets and new potential areas such as Apple TV," White wrote in a note to investors on Monday.
Apple had $121.3 billion in cash at the end of its fiscal year 2012, amounting to nearly $128 per share, or 24 percent of the company's stock price. Even if Apple decides to pay out a higher dividend to investors, White believes Apple will still hold nearly $204 billion in net cash by the end of fiscal 2014, which would amount to $212 per share or 40 percent of the current stock price.
"As such, the dividends that Apple can afford to pay out in the future are significant," White said, "and there is no reason why Apple should not currently be paying out at least a 3-4% dividend yield (or $16-$21 per share) versus the current 2% yield (or $10.60 per share)."
Despite recent losses, Topeka Capital Markets is standing by its $1,111 12-month price target for AAPL stock.
Comments
insanely insane
"Steve Jobs would never have gone meta."
Apple Fan and Stock Holder
Quote:
Originally Posted by Farshad Foroudi
its not about what they are doing. its about what will drive growth in the future. Apple TV is starting to feel distant and how many more ipad variations can they really do ?
Apple Fan and Stock Holder
While Apple's hardware receives most of the focus, I think their greatest potential lies with their software. This is where the real profits lie, and they have only scratched the surface, here.
jobs is dead and apple stock will continue to drop because of all the other alternatives on the market
besides apple investements are in other countries they are not here as for capital gains remember you re elected the person in office romney offered 9.5 million jobs obama zero now we all will take a bite of the s*** sandwhich
Originally Posted by PhilBoogie
Strange. Would be good advice when the stock was 530, but not right now at 630. Oh well, the world investors live in...
See, you're listening to AI for your stock advice, which is a ludicrously bad idea since the thing has been broken for months.
Apple is at 550, up 25 already today.
But when people see an Exec selling, people panic. lol, thinking it's some type of sign.. I swear.. Wall Street is worse than a 15 year old teenager when it comes to rumors and junk.. It really is like it's run by he said/she said.. there is no true reasoning behind it anymore.. sad really.. Might as well as read the funnies to get your stock advice!
Apple TV was always going to be the next growth center. Im not seeing enough rumors to support that anymore. Possibly car integration ? But even that has a limited profit center.
Holding Long.
Originally Posted by Farshad Foroudi
I see the OS becoming more like the iPad. Im not sure this is what computer users want if windows 8 launch is any indication.
Windows 8 ? iOS
Windows 8 ? OS X
Windows 8 ? anything relevant for comparison
What will Apple do to get new iPhone customers, not existing ones. Thinner iphone? Faster iPhone?
Why can't you think of any meaningful features? Like a Passbook that handles all manner of purchases.
Apple TV was always going to be the next growth center.
Why? I mean sure, yeah, it will, but.
Apple also has a lot of potential in the enterprise for their mac computers and software. I hope they take advantage of the momentum they have gained with the iPad and iPhone.
Apple can greatly increase its sales, just by expanding in heavily populated areas of the world, where their current presence is minimal.
Where I think the real opportunity is going to be, is mobile, but not in handheld. I'm thinking CARS! Forget dongles and bluetooth, just put the iOS in the car. You've got everything from the cloud now - music, podcasts, internet radio, navigation, phone, text, contacts, calendar, email, Facebook, all integrated in the car with Siri voice control. You don't even need your iPhone in the car.
Originally Posted by Farshad Foroudi
They keeps showing they don't care about their pro users. Lets see if Cook changes direction.
And you think that has anything to do with the stock price?
What he failed to mention is that seven of those eight years were while Steve Jobs was still living. The fact that Apple's co-founder and visionary leader is now dead should factor highly in any analyst's opinion. I would take this recommendation with a very large grain of salt. Apple's days of insanely rapid growth are behind it. The stock is more likely to settle into a narrow trading range typical of an equity that pays dividends, much like Microsoft's stock has.
Smaller iPhone? Wearable iPhone? Wrist Pad?
Wearable screens?—which would be a wearable, 3D, Apple TV?
When it comes to personal and portable, Apple is an invention machine. I'm not worried about future growth.
Then there's China . . .