Apple: A Fundamental Analysis, As We Await Earnings

| About: Apple Inc. (AAPL)

When we look at the fundamentals of Apple (AAPL), we can see quite clearly the basic facts of the rise of the most remarkable stock (and company) of the past 20 years, and why the stock continues to be purchased at current levels.

First, we note the last 6-month price per share action:

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Apple Inc. (NASDAQ:<a href='' title='Apple Inc.'>AAPL</a>)

  • On November 25, the price was $363.57/share
  • On April 13, the price was $605.23/share even in the face of a dip of 7% from it's recent "intra-day" high of $644.00/share
  • An increase of approximately 85% within this time frame
  • With relatively few days of profit taking the share price has driven nearly straight up.

Based on just the price action, Apple has been the most amazing stock that I have seen in a very, very long time.

When we take a look at the financial fundamentals, it tells an even more remarkable story (all factual, not pie in the sky fictional):

  • It has settled in for now at a $560 billion dollar market cap after going over the $600 billion mark, and is the most valuable company on the planet
  • It's trailing PE of 17.5 and forward for 2013 is 13%. The entire market right now has a PE of about 25 so Apple is well below that and would seem to have another 50%-75% potential move to the upside based on this fundamental
  • Apple's operating margin of 34% is astounding given the crowded playing field, and is roughly 12% higher than anyone close
  • The 74% YOY growth has not been seen in ANY stock with a PE as low as Apple currently has and is yet another indication of the power of this company
  • With more than $100 billion in cash, and just about NO debt is another fundamental reason that this stock has performed to this massive extent
  • The recent announcement of a dividend yield of roughly 1.8% has placed it on dividend seeking investors radar
  • The astounding 45% ROE for a company this size if mind blowing

Now, we add the product pipeline:

  • Recent launch of the new iPad has produced the usual spectacular sales numbers right from the start
  • The iPhone 4S has shattered all sales records and is the gold standard
  • The use of siri technology and cloud technology has eclipsed everyone's wildest imaginations
  • The imminent launch of the iPhone 5 is only a few months away
  • The rumored Apple TV using all of it's integrated technology could become a reality later this year or early next year
  • The new Apple PC's and laptops are quickly becoming more spectacular each quarter and sales of those are beginning to rise

Now, we look at the market place:

  • Apple IS the reason for the Nasdaq rise in 2012
  • Apple has only 9 million shares 'short" which would take less than 1/2 day to turnover
  • 70% of all outstanding shares are held by institutions
  • ESS rates it as very bullish, and analysts across the globe have increased their share price estimates with some now well over $1,000/share
  • There are 44 analysts right now following Apple with 24 strong buy recommendations, 23 buy recommendations, 5 hold recommendations, 1 under-perform and 1 sell recommendation

This is a complete basic overview of all of the actual fundamentals of Apple, its financial breakdown, its products, and its share price, as well as analyst recommendations.

I will not argue with any of it. It has and is a dream stock to have owned, and potentially to own right now.

My Opinion

I have written about Apple since October of last year from various points of view (all bullish by the way), and by looking at my articles, you can see my overall opinion. Is Apple the most perfect stock in history? It certainly appears that way.

Will you buy shares right now?

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.