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Why You Should Buy Apple Now

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STOCK AND TRADE
DailyFeed

If you’ve been kicking yourself that you didn’t get in on the ground floor in September 1984, when Apple (AAPL) debuted its IPO at $26.50 -- or even on November 10, 2001, the day before the iPod was released and shares were a scant $18.60 -- there’s still time to make money in Cupertino. A lot of money.

According to Topeka Capital Markets analyst Brian White, Apple stock is still in the bargain bin. As a technology company, Apple may come a long way, having just celebrated the most profitable quarter in market history. But its still got a long way to go.

“In CY12, we believe Apple is poised to generate the highest annual net income of any publicly traded company ever,” read a note White wrote to clients Monday morning and was then shared with Boy Genius Report. “We believe investors should think of Apple’s market cap potential in terms of trillions, not billions.”

As such, White rated Apple a Buy and put a target of its stock at $1,111, which nearly doubles the $584.49 share price Apple was trading at this report’s publishing.

White cited as precedents the “rich P/E ratios” reached by Exxon (XOM) and General Electric (GE) and specifically the “monopoly-like market share positions” held by fellow tech giants Cisco (CSCO), Intel (INTC), and Microsoft (MSFT) once they hit similar market thresholds. Unlike these companies, Apple -- with its $544 billion market value -- does not dominate its share of its market.

“With Apple trading at just 8.4x our CY13 EPS estimate (ex-cash; or 10.4x straight P/E), the stock’s valuation is a fraction of the average P/E of over 80x for the three tech companies that crossed the $500 billion level and the over 60x average for all five companies.”

So what exactly will force Exxon to pass the most-valuable-publicly-traded-company-on-the-planet torch to Apple this year? White thinks the fall launch of two products: the much-anticipated sixth-generation iPhone, or iPhone 5, that already has fans creating 3D renderings based on leaked features and specs alone; and a much cheaper iPad, the “mini iPad,” offering less storage but the same resolution.    

Also possibly coming out of Apple’s product pipeline before year’s end is the Apple HDTV. Let’s just hope they get it right this time around.

(See also: Apple Has Never Been More Lame)
POSITION:  No positions in stocks mentioned.

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