Apple Leaps 1822% Since Our Quant Ratings Service Named It a 'Buy'

TheStreet's Quant Ratings stock-modeling service is reaffirming its "Buy" recommendation on Apple (AAPL) , which is Monday's "Stock of the Day" at our premium Web site Real Money. In fact, AAPL has rallied some 1822.4% in the nine years since we upgraded the stock to a "Buy" from a "Hold" on April 13, 2009.

Quant Ratings evaluates thousands of stocks on a daily basis using a quantitative model that combines fundamental analysis of a firm's latest financial statements with technical analysis of a stock's price moves.

If you prefer exchange-traded funds to holding individual stocks, you may want to consider funds with a large percentage of holdings concentrated in Apple stock. An astounding 15 exchange-traded funds have Apple as a cornerstone holding with more than 10% of fund assets invested in this tech giant.

Six of those funds with the highest percentage of their assets in Apple are not just Buy rated but also earned our top grade of A+: iShares US Technology ETF (IYW) with 17.0%, Vanguard Info Tech Ind ETF (VGT) with 15.8%, Technology Select Sector SPDR (XLK) with 14.5%, Fidelity MSCI Info Tech Idx ETF (FTEC) with 13.9%, iShares Edge MSCI MF Technology (TCHF) with 13.3%, and iShares Global Tech (IXN) with 12.3%.

Below is an excerpt from Quant Ratings' latest analysis of AAPL:

Recently, TheStreet Quant Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Quant Ratings has this to say about the recommendation:

We rate APPLE INC as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Quant Ratings goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 17.1%. Since the same quarter one year prior, revenues rose by 16.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Powered by its strong earnings growth of 40.11% and other important driving factors, this stock has surged by 37.79% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • APPLE INC has improved earnings per share by 40.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, APPLE INC increased its bottom line by earning $9.20 versus $8.27 in the prior year. This year, the market expects an improvement in earnings ($11.75 versus $9.20).
  • You can view the full analysis from the report here: AAPL

-- Reported by Kevin Baker in Palm Beach Gardens, FL

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet, Inc. or any of its contributors.

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