This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple Stock a Temptation to Resist

Apple (AAPL - Get Report) should feel proud because Microsoft (MSFT - Get Report) will be emulating its hugely successful chain of retail outlets.

But as is the case with companies dependent on the diminished spending power of consumers, Apple's stock is still best approached with a healthy degree of caution.

Even the continuing popularity of Macs, iPhones and iPods won't provide Apple immunity from the current economic contraction, analysts warn. The consensus estimate is for Apple's per-share net profit to dip to $5.20 this year from $5.26 in fiscal 2008 (ended in September) before recovering to $5.97 next year. As can be seen in the accompanying table, Apple's net for the 12 months ended Dec. 31 was $5.39.

Stock Rating

With Apple's growth prospects muted by the worldwide economic downturn, Ratings' quantitative model evaluated the stock's price-to-earnings ratio of close to 20, based on this year's estimated net, and its recent level of nearly four times book value per share, and assigned the stock a "risk grade" of D-plus.

However, Apple's ability to remain profitable during the recession and its anticipated return to growth next year prompted the model to give it a "reward grade" of B on its grade scale that ranges from A-plus to E-minus. The stock's overall grade from Ratings is a C-plus, which equates with a "hold" recommendation but remains just one notch away from "buy."

Concerns about the health of Apple's iconic CEO, Steve Jobs, remain a factor influencing the firm's stock price. Last month, the visionary leader announced he was taking a medical leave until the end of June, saying health-related issues "are more complex than I originally thought." Jobs added, however, that, "as CEO, I plan to remain involved in major strategic decisions while I am out."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 0.00%
IBM $145.27 0.00%
HPQ $12.12 0.00%
MSFT $50.61 0.00%
FB $118.57 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs