Premium Essay

Apple: Stock Research Analysis

In:

Submitted By BUAD441
Words 964
Pages 4
Apple: Stock Research Analysis

Apple (AAPL) is one of the most high profile stocks in the world. Regarding its valuation, people are often confused by its high price. Even though the price is high, Apple's valuation is significantly lower than its historical earnings growth rate and, more importantly, its forecast growth. Consequently, we believe that this high-profile growth stock that has recently began paying a dividend is undervalued at these levels.

About Apple, taken directly from its website:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Earnings Determine Market Price

The following earnings and price correlated FAST Graphs™ clearly illustrates the importance of earnings. The Earnings Growth Rate Line or True Worth™ Line (orange line with white triangles) is correlated with the historical stock price line. On graph after graph, the lines will move in tandem. If the stock price strays away from the earnings line (over or under), inevitably it will come back to earnings.

Earnings and Price Correlated Fundamentals at a Glance

A quick glance at the historical earnings and price correlated FAST Graphs™ on Apple shows a slight picture of undervaluation based on the historical earnings growth rate of 35.9% and a current P/E of 15.8. Analysts are forecasting the earnings growth to continue at about 22%, and when you look at the forecasting graph below, the stock appears undervalued (it's outside of the value corridor of the five orange lines -- based on future growth).

Apple: Historical Earnings, Price, Dividends and Normal P/E Since

Similar Documents

Free Essay

Research in Motion Analysis

...George Leong B.Comm.: Research In Motion Limited (NASDAQ:RIMM) appears to be rising from the ashes, as investors dive back into the stock of the once-fabled maker of the “BlackBerry.” For Research In Motion (RIM), it has been quite the journey after the investment community, including myself, thought the end was near for this former Wall Street star. Since the emergence of Apple Inc. (NASDAQ:AAPL), the BlackBerry and RIM’s “Playbook” tablet have proved to be horrible failures, based on my stock analysis. But something strange is happening in the equities market, as RIM has surged 168% since trading at $6.43 on September 21, 2012; Apple, on the other hand, has declined 29% in the same period, according to my technical analysis. My stock analysis shows an opening gap on the RIM stock chart on January 22 on a bullish moving average convergence/divergence (MACD) as indicated by the circles; while this is bullish, be wary of the stock’s overbought condition. Chart courtesy of www.StockCharts.com The smartphone and tablet markets continue to be extremely competitive, and I expect this competition will heat up further, based on my stock analysis. My stock analysis suggests that Apple dominates the tablet market, but there is strong competition from Google Inc.’s (NASDAQ:GOOG) “Nexus” tablet and Samsung Electronics Co. Ltd.’s “Galaxy” series. (Read “Why Apple Needs to Refocus Its Energy.”) Some believers are also surfacing as RIM gets ready to launch new its new line of devices...

Words: 527 - Pages: 3

Premium Essay

Ms Manager

...5/28/2014 Apple Ife Matrix Analysis - Research Papers - Alexpadron MOZHISH1 UPGRADE Get Access to over 1,709,571 More Essays. Upgrade Your Account Now. RESEARCH DOCUMENTS BOOK NOTES AP NOTES Home » Miscellaneous Apple Ife Matrix Analysis By alexpadron | March 2008 Add to Library (0) Download Print Report this Essay Page 1 of 1 Apple IFE Matrix Analysis It was pretty surprising to me to find that all the different groups came up with fairly similar ratings in their IFE matrix for Apple Inc. My group, management, had the second highest rating at a 2.78 and I felt that we were fairly critical of the different strengths and weaknesses for the company. The groups that pertained to a more financial aspect like finance and accounting seemed to have lower scores, which were not as far above the average for utilization of resources internally. This seems interesting because many companies use resources outside their company to assist them in correcting financial problems. Also, there were a few strengths and weaknesses that every group mentioned in their matrix and they were: Steve Jobs leaving and then returning(W), large increase in inventory(W), products are globalized(S). It was interesting to see that Steve Jobs leaving and then returning was on everyone groups list because with out him these last few years Apple Inc. would probably not be where it is at today. The only downside to this is that there seems to be this great dependency on one person in...

Words: 591 - Pages: 3

Premium Essay

Asdasd

...Apple Computers 2011 Financial Statement Analysis Abhaya Chauhan, Surya Dantuluri, Vininder Singh Apple Computers 2011 Financial Statement Analysis Abhaya Chauhan, Surya Dantuluri, Vininder Singh Contents 0 Introduction 2 Assets and Liabilities 2 Analysis of Various Ratios 2 Liquidity Analysis: 2 Current Ratio: 2 Quick Ratio: 3 Solvency Analysis: 3 Liability-to-Equity: 3 Times Interest Earned: 3 Profitability Ratio: 4 Return on Assets: 4 Return on Equity: 4 Activity Ratios: 4 RNOA (Return on Net Operating Assets): 4 Net working Capital: 5 Accounts Receivable Turnover: 5 Footnotes Analysis 5 Research and Development 5 Stock performance 6 Stock-Based Compensation 6 Provision for Income Taxes 6 Inventories 7 Property, Plant and Equipment 7 Accounts Receivable 7 Off-Balance Sheet Arrangements 7 Commitments and Contingencies 8 Lease Commitments 8 Accrued Warranty and Indemnifications 8 Conclusion 8 Appendix 9 References: 13 Introduction Assets and Liabilities Analysis of Various Ratios Ratio analysis is done from the values from the company’s balance sheets, cash flows, operating statements and income statements. These ratios give an overview of the company and these ratios can be compared with other companies. We have calculated various ratios from the financial statements given and explained how profitable for a shareholder to consider investing in Apple. Liquidity Analysis:...

Words: 2671 - Pages: 11

Premium Essay

Doc, Docx, Pdf, Wps, Rtf, Odt

...SWOT Analysis for Apple’s new iphones Apple is a very successful producer of computer software and hardware that leads in its competitive industry. To evaluate the progress, success, and faults of the company, the SWOT analysis is used. The SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats to the organization. This model is used to help it identify internal and external areas that need improvement and internal and external areas that prove to be successful. Strengths: Over the years, Apple has grown by offering superior products compared to competitors. Apple has positioned itself to be a pioneer in the personal computer industry. It is one of the original hardware producers in the market that controls both the manufacturing of its products as well as its operating system. Apple is self- sufficient and creates its own internal components for the core of its iphones. Apple has set standards for high quality products in order to meet customer satisfaction. It is dedicated to research and development in order to create new products, which are expected to make Apple’s products more efficient and feasible to use. As a result of the company’s commitment to excellence, most of its products are compact and simple to operate. Apple is known for its loyal consumers who purchase its products for quality, regardless of price. Apple has ascended to a brand of distinction in the computer industry, which yielded a successful...

Words: 975 - Pages: 4

Premium Essay

Apple vs Microsoft

...Introduction Microsoft and Apple are in the electronic equipment industry, and have a NAICS code of 334111. Microsoft participates in the provision of developing and marketing software and hardware services. These products include, computers, phones, and intelligent devices. They also specialize in everyday software products such as Excel, Word, and PowerPoint. Microsoft’s target market is expansive. The Microsoft Suite is aimed for anyone that can use a computer. According to Yahoo Finance, Apple is considered to be one of Microsoft’s main competitors and allies in this industry. Apple engages in the design and manufacture of cell phones, media devices and computers. Some of the products designed and manufactured by Apple includes the iPhone, iPad, Mac and Apple watch.They also have consumer and professional software applications under the iOS, OS, and X brands. However, Apple also implements many of Microsoft’s software like Word and Excel in their products. Apple’s target market is very broad. They make their products for people of all ages that are consumer involved with simple innovative technology. As a business, not only is Apple Inc. (AAPL) significantly bigger than Microsoft Corporation (MSFT), but also has been growing at a fast pace. However, looking into investment opportunities, Microsoft has been outstanding. While the forecasts mention increase in growth for Microsoft Corporation over the next few years as indicated below, Apple Inc. is forecasted to decrease...

Words: 3313 - Pages: 14

Premium Essay

International Business

...A) The name of the company is Apple. The reasons of choosing this company to explore its experience using the concepts of International Business are as follow: Global pattern of trade * Apple is the global company in the retail industry. 43,000 of Apple employees in the United States to work in the 30,000 Apple stores. Apple retail store employees to do more than the average wage of employees, and provides money for universities, as well as a gym membership, 401K plans, health care plans, product discounts and lower prices for the purchase of shares. * Apple has 453 retail stores (such as in March 2015) in 16 countries and 39 countries in the online store. Each store is designed to meet the requirements of the position and the regulatory authorities. Apple has received numerous architectural awards for its store design, especially its location on Fifth Avenue in midtown Manhattan on. Competitive advantage * Before the company advertised its products are being made, the late 90s of the last century the United States; however, as a result of the outsourcing plan in 2000, almost all of the manufacturing process is now abroad. According to a report the New York Times, Apple insiders "that huge overseas factories, as well as flexible, diligent and industrial skills of foreign workers have to make more than their American counterparts that" Made in USA "is no longer a viable Alternatively, for most Apple products. " * The company's production, procurement and logistics...

Words: 1506 - Pages: 7

Premium Essay

Apple Business Analysis Part I

...Apple Computers Inc. is an American-based multinational company that creates consumer electronics goods and computer software. Known for predominantly manufacturing personal computers and facing rocky sales and low market share during the 1990s; In 2001 the introduction of the iPod music player established Apple as a leader in the consumer electronics industry. Their latest success came when the company expanded its range of products and launched the iPhone, iPod Touch and it newest brainchild the iPad. Among their popular line of products are the iPad, iPhone, and Macintosh computers. The software products include the Mac operating systems, iTunes, iLife suite, and iWork suite. Today, Apple is the largest technology firm in the world, with annual revenues of more than $60 billion. Apple continues to expand its portfolio by branching out into other sectors of the technology industry with development, designing, and creative marketing campaigns of personal computers, communication devices, servers, network solutions, portable digital music devices, and all their related accessories. http://en.wikipedia.org/wiki/History_of_Apple Managing the finances of a company such as Apple is not an easy job. The responsibility of the fund manager is to be knowledgeable of the pulse of the market and to ensure the welfare of the their clients to acquire a good returns on their investments. Extensive market research is required to stay abreast of the trends. In some cases, specializations...

Words: 1669 - Pages: 7

Premium Essay

Apple Ios Impact on Telecommunication

...Running Head: Apple iOS IMPACT ON TELECOMMUNICATIONS Apple iOS impact on Telecommunications NETW505 Project Plan Devry University Professor Shamin Bevil July 17, 2014 I chose to do my research paper on Apple iOS impact on telecommunications because it is one of the few companies that use its own software with its hardware. Apple Inc. was founded in 1977 and is headquartered in Cupertino, California. According to Yahoo Finance, Apple has 80,300 full-time employees. The company designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players all over the world. It also sells software, services, peripherals, networking solutions, and third-party digital content and applications related to its products. Some of its products are the iPhone, which is a smartphone that has a phone, music player, and Internet device; iPad, which consist of multi-purpose tablets that use Apple’s iOS Multi-Touch operating system; Mac, which consist of desktop and portable personal computers; and iPod, a line of portable digital music and media players; iCloud; and various applications and accessories. I intend to seek information for my research paper in Devry library database, the Internet, and by talking to others with Apple products. The research will focus on the requirements mandated by the course project, such as the overview and current status...

Words: 439 - Pages: 2

Premium Essay

Business Analysis of Apple

...Mutual Fund Manager (Apple) MGT/521 V5 Management Susan Coke University of Phoenix Online October 3, 2011 Financial statements are historical documents. They tell us what has happened during a particular period. It is essential to try and predict what will happen in the future. Financial ratios help assess the financial health and future prospects of a company. I have reviewed Apple, Hewlett Packard and IBM’s income statements, balance sheets and cash flow. I will review my findings along with their statements that I have included that were found on Yahoo Finance. Apple increased revenue from 32,479,000 in 2008 to 65,225,000 in 2010. Hewlett Packard had an increase in revenue of 118,364,000 in 2008 to 126,033,000 in 2010. IBM’s revenues went from 103,630,000 in 2008 to 99,870,000 in 2010. There is a direct correlation between Apple’s innovative technology and diversified business is a direct contributor to their increased revenues. While Apple spent 782,000 on research in 2007 they spent 1,782,000 in 2010; Hewlett Packard spent 3,543,000 in 2008 compared to 2,959,000 in 2010 and IBM spent 6,337,000 in 2008 and 6,026,000 in 2010. Apple was the only one of the three companies to increase their spending on research in the last few years. Because of increased research they have been able to broaden their spectrum and have more innovative products which in turns lead to increased revenues. One of the concerns I see is that Apple overall seems to increase...

Words: 1961 - Pages: 8

Premium Essay

Financial Analysis of Apple Inc:

...Financial Analysis of Apple Inc:  Financial Analysis of Apple Inc Subject: Financial Management Group Members : Ms. Ouch Kanika Ms. Hour Kimhun Mr. Pen Vanndarong Lectured by: Mr. Sok Ousa Academic Year: 2011-2012 1 Table of Contents:  Table of Contents Introduction Horizontal Analysis Vertical Analysis Ratio Analysis – Profitability Ratio Analysis – Efficiency Ratio Analysis – Liquidity Ratio Analysis – Leverage Conclusion & Recommendation Limitations of the Analysis 2 Introduction:  Introduction Corporate Facts: Name: Apple Inc. Founded: April 1976 Founders: Steve Jobs Steve Wozniak Ronald Wayne Head Office: Cupertino, California Industry: Computer hardware Computer software Consumer electronics Digital distribution Products: iPhone , iPad , iPod, iMac, Mac Books and other related hardware and software Marketing: Direct: retail and online stores Indirect: resellers & cellular network carriers 3 Introduction:  Introduction Reportedly, Apple is one of the most successful technology companies in the world. Apple business strategy focuses on research & development in order to compete in technology world. Based on Forbes (April 2012), Apple’s market capitalization worth $546 billion, which is: Almost twice of Microsoft ($273.5 billion) More than twice of IBM ($238.7 billion) More than twice of General Electric ($213.7 billion) More than twice of Wal-Mart ($208.4 billion) More than twice of Google ($203.2 billion) More than thrice of Coca Cola ($158.8 billion)...

Words: 2034 - Pages: 9

Premium Essay

Stock Market Case

...Stock Market Project August 25, 2008 The purpose of this paper is to explain the outcomes and decisions involved in investing one million dollars in four various stocks. Choosing a stock to invest in and how much to invest can be very difficult. There are many web sites available online to make the decision a little easier. This paper will explain why AT&T, Exxon, Apple and Wal-mart were the chosen four and the final outcome of the investment after four weeks. There are an overwhelming amount of stocks available for purchase on the stock market. The first thing to do is come up with a list of investing objectives. Some primary objectives should include earnings growth, recent earnings surprises, price/earnings ratios, dividends, the market cap or size, the industry and relative strengths or weaknesses. Most of the information needed for proper research can be found on any company’s income statement, balance sheet and cash flows statements. Most of these statements can be found on a company’s annual reports or its financial statements; which can be gathered directly from the company’s website or sites such as Hoovers.com, Forbes.com and many others. Another way to determine which stocks to choose is to look at the AGR scores of a stock. AGR scores are based on statistical analysis of accounting and governance risk factors. Lower scores indicate a corporate integrity risk. One million dollars was made available to invest in four companies. In order...

Words: 920 - Pages: 4

Premium Essay

Marketing Strategy of Apple

...Financial analysis As of now Apple’s shares according to NASDQ data are touching $42.62 which is a Good figure. Though the stock prices of Apple had dipped after the fmous resignation of Steve Jobs from the position of CEO followed by appointment of Tim Cooks in the same position; financial analysts now say that Apple is all set to conquer expectations in the 2nd quarter. After Tim Cook joined the board he drove major financial ventures like increasing Apple’s buyback intentions to a figure of 90 billion dollars from 60 billion dollars which in turn drove up dividend by 8%. The robust financial performance of Apple seems to be a direct result of Apple’s broader price range on I phones and increased portfolio. Obviously portfolio diversification has fueled sales and nearly 50% of activations that happened in the last year came from new sales. Apple’s gross profitability ratios are pegged at 44.11 and it is quite higher than the average of 43.5 (Morningstar 2012). The retail outlets owned by Apple helps allocation of selling and distribution expenses in an efficient manner and this way the discount fee which is paid to wholesellers is avoided. The industry average ratio of net profit is 26.97 while Apple’s figures show that its nets profit is 26.97 (Morning star, 2012). Apple’s market share is 29% in smartphone segment and 60% in tablet segment. The low price to earnings ratio of Apple (14.5) confirms that is a lesser risky investment (Garner, 2012). The current ratio of Apple is...

Words: 2674 - Pages: 11

Premium Essay

Payout Policy Analysis – Apple Computer

...Title Payout Policy Analysis – Apple Computer Word Count: 1,952 Contents Page Executive summary 1 Introduction 2 Main Body 2 Conclusion and recommendations 7 Bibliography 8 Executive summary The main aim of this report is to interpret Apple’s recent change in payout decision and to evaluate the impact of the new policy on shareholders’ value and Apple’s strategy. Firstly, previous and current payout policy will be described separately. Then, by analyzing firm’s previous and current circumstance including the change of the CEO, some considerable changes in Apple and the underlying reasons, are worth to discuss. This report concludes that the current payout policy—paying dividends along with the buyback plan—is more suitable for current company. Finally, implications of the new policy will be analyzed through using relevant and irrelevant theories as well as relevant data of competitors in the same industry. This report predicts that under the current good momentum of development, if Apple can hold this situation, it is prioritized to maintain this new policy. Introduction It is a Payout policy appraisal of Apple Computer which is reported to the firm’s shareholders or investors. The objectives of this report are shown below: * Analyze the pros and cons on recent change in payout policy. * Evaluate implications of the new policy on shareholder’s value and Apple’s financing and investment strategy. For a more detailed image analysis, some secondary...

Words: 2316 - Pages: 10

Free Essay

Strategic Management

...Apple Computers Strategic Audit Guillermo Magana Embry-Riddle Aeronautical University Abstract This paper analyzes Apple Computers current state as a business and industry leader. Each part of their strategic audit is dissected and broken down to have a better understanding of it. From the company’s current performance and strategic posture to its leader, Steve Jobs, and the team that drives the company to its incredible success. Strengths, Weakness, Opportunities and Threats (SWOT) analysis is discussed to determine how External and Internal factors affect the decisions being made by management. Finally and attempt is made to provide alternatives and a strategy to further the success Apple currently enjoys. So kick back play your favorite song on iTunes, check your stocks on your iPad and make sure to put your iPhone on silent before we start. Apple Computers Strategic Audit Current Situation Current Performance: Strong financial results for the third fiscal quarter in 2011; no debt. Best quarter ever recorded with $28.57 Billion in revenue. Record $7.31 Billion in net profits. The number of retail stores amounted to over 300 retail stores worldwide. Strategic Posture: The company strategic posture is clearly stated, and is also backed up by its strong performance. Mission, Apple is committed to bringing the best personal computing and music experience to its customers. The company has a unique ability to design and development its own hardware and software...

Words: 1953 - Pages: 8

Premium Essay

Apple Financial Stock Analysis

...Introduction: Apple is an American multinational corporation located in Cupertino, California. The company manufactures and sells personal computers, software applications, cell phones, portable digital music devices, and networking solutions. Most importantly, it specializes in designing and producing unique products such as: iPhones, iPads, MacBooks, iPods, iCloud, and certain operating software. Apple Inc. was founded in April 1, 1976 by Steve Jobs, Steve Woznaik, and Ronald Wayne. According to the CNN Money website, Apple has about 453 retail stores and 92,600 employees in 16 different countries as of March 2015. Furthermore, Apple’s stocks are publically traded in the NASDAQ stock exchange market. The MacRumor website states that the value of Apple’s stock prices continues to rise competing with other fortune 500 companies like Exxon Mobil, Google, Wells Fargo, and General Electric. As of July 24th, 2015 at 4:08 PM EDT, Apple’s stock price closed at a value of $124.50. The company uses its core competencies which is brand power and high sales volume (Revenue of $182,795 million in the first quarter of 2015) to achieve a sustainable competitive advantage in the business market (Fortune 500, 2015). However, as Apple continues to grow and expands its product line and entry into new markets, the company has to guard against stiff competition from companies like Google and Samsung. Apple is committed towards providing the best computing experience to its customers through...

Words: 2106 - Pages: 9