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Don't count Apple out yet

|Includes:Apple Inc. (AAPL), BBRY, DELL, GOOG, HPQ, SGI, SMCI, TDC

Today Apple (AAPL) stores across the country will be closed around 10AM so that store employees can watch the memorial service for Steve Jobs live.  Never since the days of Ford and Edison has a company been so tied to the image of the founder.  There is one big question on all investor's minds:  Can the company continue to innovate in the future as well as it has in the past?  Over the last 25 year the stocks price has grown 13, 076% and some are predicting it will go on.  The monthly price graph of the last 7 1/2 years provided by Barchart shows the momentum:

 

 

 

Apple Inc.(AAPL) , together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. 

 

In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. 

 

The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California. (Yahoo Finance profile)

 

Factors to consider:

 

Barchart technical indicators:

 

  • 96% Barchart technical price momentum buy signal
  • Trend Spotter technical buy signal
  • Trading above its 20, 50 and 100 day moving averages
  • Trading up in 3 of the last 5 trading session and up 5.48%
  • 32.78% price gain in the last 12 months and only1.05% off its 1 year high
  • Relative Strength Index 66.81% and rising
  • Barchart computes a technical support level at 412.19
  • Recently traded at 422.24 with a 50 day moving average of 387.24
Fundamental factors:
  • This is and always has been a Wall Street darling and as each new month passes another brokerage analysts initiates coverage
  • Analysts project sales to increase by 67.80% this year and another 24.50% next year
  • Earnings estimates are off the chart with an expected increase of 84.20% this year, 19.40% next year and a 5 year annual increase of 22.95 forecasts
  • These numbers resulted in 28 strong buy, 23 buy, 3 hold and one sell.  Since that BWS Financial sell report on 10/6/2011 the stock has climbed another 11.81%
  • PLEASE NOTE:  The recent earnings report was not what analysts expected and the stock may take a short term hit.
  • THIS MAY BE THE REASON The company delayed the new iPhone 4S product launch till this quarter so none of the last quarters results have these sales in them.
  • The company enjoys an A++ financial strength rating and has had very good price growth persistence
  • Tim Cook has really been in the driver's seat for some time and it appears this was a planned leadership succession
General investor interest:
  • This is the most widely followed stock on Motley Fool and 26,912 readers have expressed an opinion on this company's future
  • The readers voted 92% that the stock would still beat the market
  • The more savvy All Stars voted 96% for the same result
  • Fool notes that 59 of the 60 Wall Street columnists they follow are writing positive articles about the company
A sample of columnists that have picked the stock:
  • Robert Walbe on 1/2007 - up 346% since the pick
  • Tobin Smith on 4/2007  - up 323% since the pick
  • Charles Payne on 3/2008 - up 195% since the pick
Competitors and sector leaders:
 
Its always a good idea to compare a stock's price action for the past year with that of their major competitors - Apple (NASDAQ:AAPL) is up 36%, Google (NASDAQ:GOOG) down 2%, Hewlett-Packard (NYSE:HPQ) down 40% and Research in Motion (RIMM) down 51%:
 

 

APPL is a member of the SIC 3571 Electronic Computer sector and some of the other members have also has positive price movement in the past year with Teradata (NYSE:TDC) up 59%, Super Micro Computers (NASDAQ:SMCI) up 39%, Silicon Graphics (NASDAQ:SGI) up 64% and Dell (NASDAQ:DELL) up 13%:

 

 

Summary:  Apple (AAPL) has enjoyed great success and I predict that Steve Jobs left the company in good hands.  The new products like the iPhone 4S and the others in the pipeline will continue to attract the cult following that have paid premium dollar of their products in the past.  If the numbers projected are made investors could still see an annual return in the 21% - 23% range for at least the next 5 years.

 

 
Jim Van Meerten is a Marketocracy Master

 

 

 

 

 


 



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Stocks: AAPL, GOOG, HPQ, BBRY, TDC, SMCI, SGI, DELL