- By Christian Hudspeth
$1,000 per share.
That's what Topeka Capital Markets analyst Brian White expects Apple's (NASDAQ: AAPL) stock price to be valued at within 12 months.
That would boost Apple's market cap enough to make it the first trillion-dollar company -- far and away the largest publicly traded corporation in the world.
And that's a "modest" valuation according to Mr. White.
Topeka's analyst projections have seemed outlandish in the past -- but they've come through. Last fall, the group projected that Apple would reach $666 -- a bold prediction seeing as though the stock was trading around $400 at the time. Just six months later, Apple shares reached new highs of $640.
Over the past 10 years, Apple's stock has grown from just $12 per share, to $580 -- giving investors who held the stock an incredible return of 4,500%. If you invested $1,000 in Apple in April 2002, you could potentially cash your shares for $48,333 today.
By comparison, if 10 years ago you were to spread a $1,000 investment across the 500 largest companies trading in the U.S. stock market -- which would include companies like Wal-Mart, Exxon, GE, AT&T and others -- you'd end up with just $1,250 today.
So what makes Apple so special? How did it grow to become the world's largest and most valuable company?
It's simple. Behind every winning stock is a company with a strong brand image, a lasting competitive advantage, an ever-growing profit and a knack for keeping its shareholders happy for the long haul.
Our investment research team exclusively recommends companies with these successful traits in our Forever Stocks investment advisory. We call them "forever" stocks -- stocks you can buy today and profit from for decades without having to worry about economic slowdowns, market crashes or rising interest rates.
Believe it or not, it's not hard to find companies that have the qualities of Apple, if you know what to look for.;
Here are a few winning "forever" qualities that propelled Apple's stock over 4,500% in just 10 years:
Apple is the "Coca-Cola" of its industry, with lasting competitive advantages.
The Apple brand has become as recognizable as "Coca-Cola," with products that can be imitated, but rarely replaced.
Between Apple's talented marketing team and development/design team, the tech-giant has not only made computers, smart phones and MP3 players slick, it's made them mainstream.
Today, Apple's audience reach knows no bounds. Seniors use iPhones to make calls and play bridge, three-year-olds use the iPad to watch cartoons and play video games and journalists listen to iPods while they type. And when Apple users want more apps or music, they buy direct from the iTunes store.
And no one says they want a "tablet PC." They want an "iPad" -- or at least its equivalent.
It's the "Coca-Cola" of its industry, and many consumers would prefer not to drink any other brand.
Apple rakes in ever-increasing profits, every year.
Apple's net income has grown an unprecedented 5,067% over just 10 years -- from $65 million in 2002, to today's $33 billion. That's double the profit that behemoth Wal-Mart takes in every year.
One of Apple's secrets behind its skyrocketing profit growth? The company manages to keep its manufacturing costs low, and always finds new ways to generate a higher profit for each new product it introduces, every year -- recession or not.
Apple started its early adopters small with iPods eight years ago. Over time, the "wow" experience of the product and "cool factor" of the brand convinced them -- and their friends -- to upgrade to the more expensive iTouch, iPhone and then iPad.
In 2002, Apple made a profit of $1 for every $100 iWidget sold. Today, Apple makes 26 times more profit off of each sale -- a whopping $26 profit for every $100 iWidget sold.
Increasingly fattened profit margins, combined with an annual growth in number of iWidgets sold have helped Apple reach record profits every year for the past decade -- profits that it can use to grow the company and thereby further increase its stock's value.
Apple vows to reward its shareholders through good markets -- and bad ones -- for decades.
Apple's incredible 26% profit margins -- and $33 billion a year profits -- are some of the largest in any industry, so of course investors have been salivating over the stock in recent years.
But Apple doesn't want its stock to be a fling or a flash-in-the-pan investment that shareholders get tired of and just sell after a few years. The company wants to keep current shareholders -- and their valuable investment dollars that fuel Apple's future development and expansion -- happy for decades.
What's the easiest way Apple can increase the value of its company over the long term? Of course through sustainable and consistent growth, but more so by utilizing its strongest asset -- its massive cash hoard.
With its debts paid off long ago, the company has been able to sock away large chunks of its profit into its savings. Its cash hoard reached a gigantic $97.5 billion in March -- nearly enough cash to buy McDonalds or Bank of America outright.
That's cash that the company can use in the future to soften the blows of market downturns or recessions. Cash that can be used to develop the next, multi-billion dollar iProduct. Cash that can be used to acquire a smaller company that can help Apple continue growing. And it's cash that can be used to reward its shareholders with billions of dollars in dividends.
Apple is prepared for rainy days, it's prepared to seize opportunities, and above all, it's prepared to please its shareholders for many years to come.
The Investing Answer: With everything Apple has going for it, it's not hard to see why investors have collectively poured more than $540 billion into its stock. If Apple's market value grew 85% larger to $1 trillion -- as some analysts expect it will -- it wouldn't surprise me.
All of these qualities -- a strong brand, a lasting competitive advantage, an ever-growing profit and a desire to keep shareholders happy -- have made Apple the multi-billion dollar company it is today, and have given shareholders returns of 47.4 % per year.
And while I don't expect Apple to keep up that pace forever, I do expect that it will continue to be successful, and will reward its shareholders with sustainable growth and value for decades to come.
My investment research team and I strongly believe in investing in great companies with these "forever" qualities. In fact, we've created an entire investment advisory devoted to them, called Forever Stocks. We recommend high-quality securities that you can count on for strong, steady returns -- year after year -- all while ensuring you get a good night's sleep. To learn more about Forever Stocks, click here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.