Your Top Stock Pick—Apple

September 8, 2009

Apple Is Better Than MSFT, But Not Great

All in all, if I had to pick between the two, I would rate Apple as the winner. This stock is an OK investment, since one or two good product offerings could send shares soaring, and Microsoft is very slow when it comes to new ideas. But I would hardly mortgage the farm for this tech pick. My Portfolio Grader stock-screener (a FREE tool available to all investors) gives this stock a B overall, meaning it makes the grade but is not at the head of the class.

But remember, this is just my take on Apple RIGHT NOW. As the past year has taught us, things can change on Wall Street. Here are some things I’d like to see happen at AAPL before I give this stock a ringing endorsement:

Renewed Focus on Computers: I’ll admit that I’m part of the Apple army, and I use a MacBook Air laptop when I’m on the road. But if this company wants to continue to maintain its presence in the computer market, it needs to continue to innovate and manage its products with the same zeal as its consumer gadgets. The iPod and iPhone were smash hits, but Apple needs to be competitive with its operating system and computers if it wants to really grow and thrive.

Less Focus on CEO Jobs: I don’t know how to make the future of Apple less linked to Steve Jobs’ medical records, but it needs to happen for me to have faith in this stock. As of right now, all it takes is one blog post about Jobs to send shares reeling—and that doesn’t sit well with me. I want a stock to move based on its sales and profits, not on the rumor mill.

More Impressive Numbers: For all the hype, the company’s earnings performance hasn’t been as impressive as I like. Yes, the company has been growing its bottom line even in a recession; margins are at about 36%, so earnings and revenue are moving in lockstep. A larger profit margin would help earnings explode higher on even a small uptick in revenue—or allow the company to significantly grow earnings even if sales stay flat.

YOU Decide Which Stock Is Next!

Remember, I need you to send me the companies that are on your mind for next Tuesday’s Stock of the Week! You can email your picks to me at stocks@navelliergrowth.com, and I’ll discuss the companies that matter most to you next week.

You can also post your suggestions at the bottom of this article via our IntenseDebate comment tool. That way, your fellow investors can also share their opinions on stocks. It’s a great way to get a feel for what other people are thinking, so I encourage you to use the forum below to discuss any stocks in your portfolio.

That’s all for this week. I’ll be in touch with you again with another one of your stock picks on Tuesday, September 15. Take care!

Sincerely,

Louis Navellier

P.S. Don’t forget to send me your stock ideas! Email them to me at stocks@navelliergrowth.com. I look forwarding to hearing from you!