Zacks highlights commentary from People and Picks Member «MightyMo».

For more Voice of the People, visit http://at.zacks.com/?id=7872

Featured Post

AAPL: Why Apple is a flat out BUY Recommendation Now

The fundamentalists will tell you Apple, Inc. (AAPL) is currently under-valued.

I see seven  reasons why:

(1)  CEO: The health status of Steve Jobs has put a deep cloud of uncertainty over the company.

(2)  Cut in Index weighting: The S&P 500 slashed the weighting of it’s index of Apple as it considered it to carry too much over-all weight in the index. Many passive funds were forced to sell their holdings on AAPL.

(3)  Physical Price per Share:  AAPL sells for over $300 per share. Although considered relatively cheap the physical price of the shares drives many retail investors away. A split in the share price will bring in more buyers. AAPL probably doesn’t want to do this as a lower share price will cause more volatity in option plays. A lower price per share makes it’s easier to perform complex option plays.

(4)  Dividends. AAPL has a huge horde of cash but doesn’t pay a dividend. Many players will not buy a stock that doesn’t pay a dividend. AAPL could pay a 2-3% dividend without denting it cash horde.

(5) Japan: There is speculation that the Japan diasters this year have slowed down production of elements needed for AAPL products, There is no factual information that this  actually is happening however, no guidance from  Apple to this regard.

(6) Seasonality: APPL in the last five years has seen it’s share price drop in May from 1st quarter and bottom in June. However it tends to climb from that point on into the 4th quarter.

(7)  Tech Sector:  The overall tech sector, as indicated by the Nasdaq index and MSX tech index has been relatively weak this year carrying AAPL with it.

As you can see, now of the above relate to fundamental reasons. Apple’s story;  growth prospects, products, cash flow and valuations have been stated many times. I do not need  to rehash them here. AAPL has a low P/E of 16 for a tech stock although its growth prospects (double-digit growth, earnings, and revenue rates) continue to be huge.

On Nov 17, 2010 we listed our top ten super growth stocks which included AAPL then at a recommended buy at 300. It has moved up only 35 points. Based on analysts’ projections there is plenty of more room for AAPL.

Analysts projections of AAPL include the following:

Price targets:  $500 at Credit Suisse, $440 at S&P;  Wedbush is at $450, Oppenheimer at 450, UBS at 495 and Ticondergora at 612.

In my opinion, given the current undervalued price of AAPL, this is a great time to continue to hold AAPL or buy in. We liked APPL at 300 and we like it even better at current levels.

 Updated item May 31, APPLE to announce icloud !

 

The most recent picks by «MightyMo» are:
A buy rating on Apple, Inc. (AAPL),
a buy rating on Chipotle Mexican Grill (CMG) and
a buy rating on NetFlix (NFLX).

About the Zacks Community

In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more about People And Picks, visit http://at.zacks.com/?id=7870

Follow us on Twitter: http://www.twitter.com/PeopleAndPicks

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=7867.

 
APPLE INC (AAPL): Free Stock Analysis Report
 
CHIPOTLE MEXICN (CMG): Free Stock Analysis Report
 
NETFLIX INC (NFLX): Free Stock Analysis Report
 
Zacks Investment Research