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03.07.2012
It's almost too good to be true. Apple is the most valuable company in the world with a market cap of nearly $500 billion.
Excuse me, a tech company that makes gadgets that you can play games on surpassed an oil giant like Exxon, and a bellwether like General Electric? Who would have guessed that with the financial and economic collapse the world has been through that this kind of a company would emerge the victor?
Well, I bet Apple Inc. (AAPL) did.
But now that the company has hit this major new threshold, what's next? Are there any reasons to buy Apple stock right now?
The answer is a resounding yes, and there are four major reasons why you should love this company right now:
I don't think it came as any real surprise, but Apple announced that they are releasing a new iPad.
The device will have the Retina display for better, clearer images that will make reading and surfing easier on the eyes. The screen will have over 3.1 million pixels which they claim will be the most ever in a mobile device and four times more than the iPad2.
And it's going to have an iSight camera that that will take high-def photos and video at 1080p resolution. And, as expected, the new device had voice dictation software just like on the iPhone 4S.
And here is what everyone has been waiting for… It will come with 4G LTE wireless!
This is all very cool stuff that users have been clamoring for. I have no doubt that the device will be a hit–no matter how much grumbling you hear from tech reviewers in the coming days (because they always do that).
I know I'll be upgrading my current iPad for this new and much-improved version, but will you? Let me know by casting your vote below.
Now that you've heard what it can do, are you planning to buy the new iPad?
Well, if you answered "1" or "2", you could very well be joining the ranks of tens of millions of satisfied iPad owners—and you can pre-order your device now or start camping in front of a store for the official release on March 16. According to MarketWatch, over 40 million iPads flew off the shelves in 2011, putting $25 billion in sales right in the pockets of Apple Inc. As it stands, the iPad has brought in more annual revenue than any other Apple product and currently makes up nearly a fifth of the company's revenue base. And what's more is that with 62% global market share, the iPad is now the best-selling tablet around.
So whether you've going to dive into the iPad craze or remain on the sidelines, there is no excuse why you shouldn't take a bite of the big AAPL by picking up shares before they climb even higher. But, the buck doesn't stop with the iPad and its other premium gadgets–Apple is also setting records with its wildly successful business in application software, also known as "apps."
iTunes and the app store have revolutionized the way we listen to music and interact with the world around us. The iTunes app store now boasts 550,000 apps to choose from–and people are downloading those apps as fast as their fingers can push the button.
On Monday, Apple announced that more than 25 billion apps have been downloaded from its apps store to date. And all of these downloads came via an Apple device–incredible!
People around the world are hooked on these fun (and oftentimes free) apps that allow them to do everything from getting directions to tracking their workouts to launching animated birds across an interactive screen. If you can think of it, there's probably an app for that.
Of course, how can we tell that the Apple brand is more than just a fad? In the end, is it really worth shelling out over $500 a share for another tech stock? If you're asking yourself this, that's a fair question. But, that leads me to the third reason that I love Apple...
It's one thing to have a hot product. It's quite another to consistently turn sales into profits and attract shareholders. And Apple has been able to do just that.
In the most recent quarter, the company sold over 37 million iPhones (a 128% jump over last year), over 15 million iPads (a 111% increase) and even over 5 million Macs (a 26% jump).
So, it's no wonder that company leadership announced first-quarter operating performance that knocked estimates out of the park. Total sales jumped 73% year-over-year to $46.33 billion, trouncing the $38.85 billion consensus estimate by 19%! Over the same period, net profit more than doubled to $13.06 billion, or $13.87 per share. The analyst community forecast earnings of $10.08 per share, so Apple posted a 30% earnings surprise!
And, an earnings announcement like this proves just how financially sound this company is. If you take a look at my report card for AAPL, you'll see that the company scores top marks down the line; from sales growth to earnings growth to return on equity, the company scores no lower than a "B" in terms of its fundamentals. This, coupled with fantastic buying pressure, makes Apple an A-rated stock.
As impressive as these stats are on their own, when you stack them up against the competition Apple's dominance is even more impressive:
So, it's really no wonder that AMZN and GOOG have only appreciated in the single digits over the past twelve months while AAPL has zoomed ahead over 50%! Meanwhile, HPQ and RIMM have been on a downward spiral for the past year.
So for those that question the steep price of Apple's stock, let me say this: You get what you pay for.
Apple is an innovator through and through. Just when you think you've seen it all, they come out with something smaller, faster, lighter or much like the debut of the first iPad, something we've never seen before.
It has acquired such a devoted fan base that even small upgrades are highly-anticipated and make normally reserved people camp out in front of Apple stores for days just to be among the first to get their hands on the new must-have device.
And 2012 is shaping up to be another great year for Apple as new-and-improved products hit stores. Of CNET's 16 most anticipated technology products of 2012, Apple is the only company with FIVE products dominating the list:
It's anybody's guess if all of these officially come to market in 2012, but there are windfall profits at stake even if only a few make it to market. After all, Apple has proven that it is the poster child for customer loyalty, and not even the worst recession in decades was able to derail this train. So, even with the untimely passing of Steve Jobs, I don't see this trend letting up.
Apple Inc. is a global force that weathers even the most intimidating market fluctuations and you can expect continued strong sales growth, good earnings, and continued profits. So, whether you're a Mac or PC user, an iPad or Droid devotee, an iPad or Kindle fan, Apple is a great stock to buy now.
Have a great day.
Sincerely,
Louis Navellier
