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Welcome To The Big Apple

|Includes: Apple Inc. (AAPL)
Welcome to the Big Apple

Apple (AAPL,$AAPL) Hits Market Cap Milestone

Apple hit another milestone yesterday as its market cap exceeded $623 billion and it became the largest company in US history. Apple's stock-market value now beats second-place oil giant Exxon-Mobil by more than $200 billion. Of course, historically Apple still lags its old nemesis Microsoft in inflation-adjusted dollars--barely, but when was the last time Apple lagged Microsoft in anything other than theoretical terms?

Recent price gains show that the death of Steve Jobs has had little effect on investor sentiment--so far. But, serious questions remain as to how Apple can continue to grow at such an impressive rate. When a company is already so huge, can further refinements to mainstays like the iPhone and iPad provide enough earnings----the stock is up 64% this year-- to make even bigger gains? For now, our models remain smitten with the stock.

ValuEngine has issued a BUY recommendation for APPLE INC on Aug. 21, 2012. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, risk and 5-year annualized return.

Based on available data as of Aug. 21, 2012, we believe that AAPL should be trading at $595.14. This makes AAPL 11.76% overvalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For AAPL, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $42.97, forecasted EPS for the next four quarters of $50.33, and correlations to the 30- year Treasury bond yield of 2.93%.

 

 

ValuEngine Forecast

   
 

Target Price

Expected Return

1-Month

667.97

0.42%

3-Month

675.59

1.57%

6-Month

686.67

3.23%

1-Year

704.14

5.86%

2-Year

721.45

8.46%

3-Year

743.21

11.74%

 

Valuation & Rankings

     

Valuation

11.76% overvalued

Valuation Rank

23

1-M Forecast Return

0.42%

1-M Forecast Return Rank

58

12-M Return

87.63%

Momentum Rank

96

Sharpe Ratio

0.81

Sharpe Ratio Rank

99

5-Y Avg Annual Return

31.39%

5-Y Avg Annual Rtn Rank

99

Volatility

38.71%

Volatility Rank

64

Expected EPS Growth

17.13%

EPS Growth Rank

50

Market Cap (billions)

621.96

Size Rank

100

Trailing P/E Ratio

15.48

Trailing P/E Rank

62

Forward P/E Ratio

13.22

Forward P/E Ratio Rank

52

PEG Ratio

0.9

PEG Ratio Rank

51

Price/Sales

4.18

Price/Sales Rank

19

Market/Book

5.85

Market/Book Rank

16

Beta

1.23

Beta Rank

44

Alpha

0.55

Alpha Rank

96

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.