AAPL Stock Is Ready to Grow
By Jeff Reeves
Editor, InvestorPlace.com and The Slant
Everyone knows the basics behind Apple (AAPL) — AAPL stock has a decent forward P/E of 12, which is lower than the market broadly and especially large cap tech. There’s also $146 billion in cash in the bank, a $60 billion buyback plan running through 2015 and a nice 2.2% yield.
These are powerful arguments for stability. But what about growth?
Consider these three reasons why AAPL stock should keep growing:
China: We recently got confirmation of a deal between AAPL and China Mobile (CHL) to put the Apple iPhone into the biggest telecom market in the world. Considering that the Apple China market share was just 5% to start 2013 … that’s a lot of untapped customers.
e-Commerce: Sure, Android has an edge on raw market share. But tech giant Adobe (ADBE) recently estimated that iOS-based devices from Apple drove 77% of holiday e-commerce done on mobile devices. Android? Less than 5%. So while market share matters, don’t discount the power AAPL has to connect with actual transactions. Remember, Android and Motorola don’t contribute anything to Google (GOOG) earnings right now — and profits are what investors watch most.
Momentum: In this market, a year can change a lot. And now Apple stock is testing new 52-week highs and has snapped back 40% since July. Sure, AAPL stock may not top $700 again anytime soon. But in the next few years anything’s possible — and in the short term, $600 seems to be the next stop. Don’t bet against a momentum play in this market — especially one like Apple where there are still plenty of bears out there to keep the stock honest.
As of this writing, none of the contributors had a position in any of the aforementioned securities.