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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Apple's Stock Is an Undeniable 'Buy' Right Now (Update 1)

Updated from 10:06 a.m. EST to provide additional analyst comments regarding products in the eighth paragraph.

NEW YORK (TheStreet) -- Apple (AAPL) has wildly underperformed other technology stocks of late, making the shares a bargain as the company enters the holiday-shopping season with a new iPhone, iPad mini and Mac laptops. That's what many Wall Street analysts are saying.

Over the past three months, Apple shares have lost 18.6%, compared to a loss of 7.3% for the technology benchmark Nasdaq. Year-to-date, the stock is up 38% vs. a gain of 11.5% for the Nasdaq.

Topeka Capital Markets analyst Brian White believes the recent under-performance might be over. He called the sell-off in Apple shares "insanely insane," given the valuation at which Apple shares are trading. According to White's calculations, Apple is trading at 7.6 times 2013 earnings, excluding cash.

"Those investors that have missed Apple or have been under-weight the stock, now have another opportunity to buy Apple before sentiment takes a turn for the positive during what has historically been the strongest quarter of the year for the stock," White wrote in his note. He has a buy rating on Apple with a $1,111 price target on the stock, the highest on Wall Street.

There are several theories why Apple shares have slumped. They include consumers tiring of Apple products, a lack of innovation, and competition from the likes of Samsung, Google (GOOG), Amazon (AMZN) and others.

There is also concern that Apple's incredibly wide gross profit margins may shrink, as the company announces new products at lower price points (Apple's iPad Mini: What It Means for Investors) and gets squeezed by suppliers.

There are factors outside of the technology industry that are weighing on the stock as well. The so-called fiscal cliff in the U.S., a weak European economy and year-end tax-related selling are among them.

Apple: Here's Why the Stock Will Go On an Epic Run

Though Apple has had its share of negative press, the company has bright prospects going into the all-important holiday-shopping season -- and into 2013. The iPhone 5 is a hit, having sold 5 million units its first weekend. The iPad mini has been well-received by journalists and consumers alike.

The redesigned iMac, scheduled for release later this month and in December, was the most eye-catching product at Apple's October product launch. In other words, Apple has plenty going for it.

The added speculation of an Apple-branded television set could also be a major catalyst, says Baird Equity Research William Power. "Though timing and approach remain unclear, this remains a sizeable potential opportunity, and importantly could help reaffirm its innovation edge," Power wrote in his note. He rates Apple at outperform with a $750 price target.

>>> On Tuesday, November 20 at 6pm ET, TheStreet will host a Trade Credit Insurance webinar with Todd Lynady, Senior Underwriter for Zurich in North America and Mike DeLuca, Senior Partner of One Source. Register now.

Topeka Capital Markets' White isn't the only analyst on Wall Street who's super-bullish on Apple. The average price target on Apple is $760, according to data compiled by Thomson Reuters. That's 44% higher than where Apple shares closed on Friday.

Apple shares are sharply higher in Monday's trading, up 5.82% at $558.38 on volume of more than 19 million.

Interested in more on Apple? See TheStreet Ratings' report card for this stock.

--Written by Chris Ciaccia in New York

>Contact by Email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,985.61 +78.99 0.47%
S&P 500 1,972.83 +9.12 0.46%
NASDAQ 4,419.0340 +27.5710 0.63%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs