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Apple a Good Investment

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Apple, A Good Investment?

1. Provide a rationale for the U.S. publicly traded company that you selected, indicating the significant factors driving your decision as a financial manager. As the financial manager, I have decided to recommend to my investor that they invest heavily in the stock of Apple Incorporated. There are several reasons why I am going to advise my investor to invest in Apple Incorporated. The first of these reasons that have caused me to recommend Apple as a good investment is because at the end of 2012 according to Bernstein analyst Toni Sacconaghi Apple alone was (2012) “responsible for seventeen percent of the gains of the entire Standard and Poor’s Five hundred. The next reason for my recommendation of investment in Apple is because of its long-term performance over the previous ten years. Since 2002 Apple’s stock has soared some 7,800 percent verse 54 percent for the S&P Five hundred. (Birger, 2012) In my opinion this strength over the past ten years shows that this stock is a reliable investment now and will continue to be a reliable investment well into the future. Furthermore while in the past Apple has been considered specifically a growth stock, currently I would consider it not only a growth stock but also a value play. The reason for this consideration is because according to Birger (2012) it has seen a “66 percent earnings growth over the prior four quarters as well as a 1.8 percent yield and a price/earnings ratio of 13, lower than the S&P 500’s 16 P/E”. All of these reasons show that even though Apple’s stock has taken a significant hit, dropping 33 percent since their historic high of 700 dollars, it still is a strong investment. Moreover in August of 2013 Carl Icahn invested a large amount in Apple saying that he thinks, “It is extremely undervalued”. Lastly Apple is known for its innovation. In recent years it

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