Apple Is An Impossible Dream Come True

Aug. 24, 2011 11:38 AM ETApple Inc. (AAPL)10 Comments
John Tobey, CFA profile picture
John Tobey, CFA
Apple pictureWatching the stock market move up nicely and perhaps confirming a double bottom (see “Double Bottom? This Powerful, Positive Indicator Could Be Forming”), I decided to do an unusual screening. With stocks having been beaten down and growth forecasts being dismissed, why not screen for the perfect growth stock--the company that makes an inordinate amount of money, has high growth built on large sales increases with real profitability not dependent on a short-term burst or the “clever” use of financial leverage -- and whose stock is “cheap.”
So, I opened up my screener and started loading in all the desirables. Step-by-step, the universe of stocks dwindled down, until I was left with only one: Apple Inc. (NASDAQ:AAPL).
So, was this a surprise? Not really, since Apple is one of my five growth stock positions -- the others are Boeing (BA), Caterpillar (CAT), JPMorgan Chase (JPM) and KKR (KKR). However, it was a reminder of how outstanding Apple’s growth and profitability is, how attractive its stock valuation is and how strong its stock has been through this rocky market period.
The other surprise
Until the very last hurdles, my screens had produced a short list of 14 companies, including Apple. However, the last two hurdles proved too much for 13. These hurdles were the stock price above the 200-day simple moving average and within 15% of its 52-week high. When the stock market begins to turn, leading stocks have already begun to show relative strength – like Apple. And, in this case, only Apple. The other 13 stocks didn’t barely miss, either – they were well below their 200-day averages and well more than 15% below their highs. (The 13 companies are listed at the end of this article.)
The hurdles and how Apple measured up
Starting with all

This article was written by

John Tobey, CFA profile picture
I am the founder and editor of Investment Directions. My career has been managing and consulting to multi-billion dollar funds. Using the widely accepted “multi-manager” approach, I have worked with top investment managers throughout the country, gaining a high level of expertise. My career has spanned many market environments, and I have hands-on experience searching out opportunities and avoiding risks in all of them. I now devote my time to Investment Directions, with the goal of helping investors further their understanding and improve their investing skills. I am currently serving on: The AAUW Investment Advisers Committee and The City of Vista Investment Advisory Committee.

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