jgffa's  Instablog

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Harvard Biology Undergrad, Babson MBA, Lab Technician at National Institutes of Health, Investment Research Analyst.
My company:
First Financial Advisors
My blog:
First Financial Advisors
  • Hidden Pocket Of Growth Will Drive AAPL Higher 0 comments
    Mar 13, 2014 4:01 PM | about stocks: AAPL

    The market has priced in a slowdown in growth of global smartphones, from 40% to 20%. This has depressed the multiple and earnings expectations of Apple.

    However, there is a pocket of hyper-growth within the overall smartphone market, which the stock market is not yet pricing in to the relevant stocks. The pocket of hyper-growth is the shift to 4G enabled phones in China, which is being driven by China Mobile's new 4G network and the Apple iPhone 5S.

    With the 5S and the China-Mobile deal, Apple is perfectly positioned to capture the lion's share of this pocket of hyper-growth in the Chinese smartphone market. One recent survey shows the Apple 5S-4G combo to be the market leader in China, at more than 40% of "pent-up demand," compared to its current market share of less than 10%.

    However, the average analyst estimate for the March and June quarters right now does not adequately factor in this pocket of hyper-growth for Apple. Therein lies opportunity on the long side of AAPL right now.

    We have an $800 per share price target on AAPL.


    Disclosure: I am long AAPL.

    Stocks: AAPL
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