Apple and 10 Big Companies That Hoard the Most Cash

NEW YORK (TheStreet) -- Sometimes you can actually have too much cash.

The corporate cash pile for U.S. non-financial companies rose to new highs in 2014, but that trend is expected to somewhat soften this year, according to Moody's (MCO) Investor Service.

U.S. companies held $1.73 trillion in cash and liquid investments in 2014, up 4% from 2013 and more than double the cash level in 2007, according to a May 7 report by Moody's. Cash flows from operations rose to an all-time high of $1.6 trillion, but is expected to dip to $1.5 trillion due to reduced capital expenditures in the energy sector this year, according to Richard Lane, the report's author and a senior vice president at Moody's.

Company cash used for capital expenditures, dividends, and share repurchases also hit record highs in 2014, while spending on acquisitions rose 20%, according to Moody's. In comparison, aggregate revenue for companies in the report rose 5.6% in 2014 to $11.8 trillion, while company debt rose 7.3% to $4.72 trillion.

The report, published by the Moody's corporate finance group, analyzed 1,137 Moody's-rated U.S. companies as well as unrated companies like Facebook (FB), Yahoo! (YHOO), SanDisk (SNDK) and Nvidia (NVDA), given their significant liquidity, it said. The group does not cover financial services companies, which were excluded from the report.

Of that $1.73 trillion, nearly two-thirds ($1.1 trillion), was held overseas in 2014, up from $950 billion in 2013, the report said.

"Because domestic cash is consumed by dividends and share buybacks and is used to pay for the majority of acquisitions, we expect that overseas cash balances will continue to grow unless tax laws are changed to encourage companies to repatriate money," Moody's said.

The tech industry held nearly 40% of total cash in 2014, according to Moody's. Other cash-flush industries included health care/pharmaceuticals, consumer products and energy.

So, here they are, the 11 companies that are hoarding the most cash. Together, they are hoarding a whopping $637.2 billion, 37% of the total hoarded cash reported by Moody's. 

TheStreet added ratings from TheStreet Ratings for added perspective.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Note: Year-to-date returns are based on June 17, 2015 closing prices. Total cash amounts are as of year end.

GM Chart GM data by YCharts

11. General Motors (GM)
Market Cap: $57.5 billion
Sector: Consumers Goods & Services/Automobile Manufacturers
Total Cash: $28.2 billion
Year-to-date return: 2.6%

General Motors Company designs, builds, and sells cars, crossovers, trucks, and automobile parts worldwide. It operates through GM North America, GM Europe, GM International Operations, GM South America, and GM Financial segments.

TheStreet Ratings: Buy, B
TheStreet Ratings said:
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, impressive record of earnings per share growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 343.7% when compared to the same quarter one year prior, rising from $213.00 million to $945.00 million.
  • GENERAL MOTORS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.48 versus $1.64).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, GENERAL MOTORS CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.1%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.33, it is still below the industry average, suggesting that this level of debt is acceptable within the Automobiles industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.79 is weak.

 

 

MRK Chart MRK data by YCharts


10. Merck & Co. (MRK)
Market Cap: $15 billion
Sector: Health Care/Pharmaceuticals
Total Cash: $29.2 billion
Year-to-date return: 2%

Merck & Co., Inc. provides health care solutions worldwide. The company offer therapeutic and preventive agents to treat cardiovascular, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss, and fertility diseases. It also offers neuromuscular blocking agents for use in surgery; anti-bacterial products for skin and skin structure infections; antidepressants; ophthalmic and cholesterol modification products; non-sedating antihistamine; and vaginal contraceptive implants. In addition, the company provides products to prevent chemotherapy-induced and post-operative nausea and vomiting; to treat brain tumors and melanoma; to prevent diseases caused by human papillomavirus, as well as vaccines for measles, mumps, rubella, varicella, chickenpox, shingles, rotavirus gastroenteritis, and pneumococcal diseases. Further, it offers animal health products, including antibiotic and anti-inflammatory drugs to treat infectious and respiratory diseases, fertility disorders, and pneumonia in cattle, horses, and swine; vaccines for poultry; parasiticide for sea lice in salmon; and antibiotics for, and vaccines against bacterial and viral disease in fish.

TheStreet Ratings: Buy, B+
TheStreet Ratings said:
"We rate MERCK & CO (MRK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins, notable return on equity and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • The debt-to-equity ratio is somewhat low, currently at 0.63, 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 1.09, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for MERCK & CO is currently very high, coming in at 94.01%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MRK's net profit margin of 10.11% significantly trails the industry average.
  • 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. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, MERCK & CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • MRK, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

 

 

MDT Chart MDT data by YCharts

9. Medtronic Plc (MDT)
Market Cap: $108 billion
Sector: Health Care/Health Care Equipment
Total Cash: $31.1 billion
Year-to-date return: 4.9%

Medtronic plc, a healthcare solutions company, provides medical technologies, services, and solutions worldwide. It operates through three segments: Cardiac and Vascular Group, Restorative Therapies Group, and Diabetes Group.

TheStreet Ratings: Buy, A
TheStreet Ratings said:
"We rate MEDTRONIC PLC (MDT) a BUY. 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • MDT's very impressive revenue growth greatly exceeded the industry average of 21.9%. Since the same quarter one year prior, revenues leaped by 60.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, 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 this, the company maintains a quick ratio of 2.68, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $1,912.00 million or 43.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.83%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

 

 

QCOM Chart QCOM data by YCharts

8. Qualcomm Inc. (QCOM)
Market Cap: $108.5 billion
Sector: Technology/Communications Equipment
Total Cash: $31.6 billion
Year-to-date return: -10.5%

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, and the United States.

TheStreet Ratings: Buy, B-
TheStreet Ratings said:
"We rate QUALCOMM INC (QCOM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • QCOM's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • QCOM's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.86, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, QUALCOMM INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 67.17%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.27% trails the industry average.
  • QUALCOMM INC's earnings per share declined by 44.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $4.40 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($4.79 versus $4.40).

 

JNJ Chart JNJ data by YCharts

7. Johnson & Johnson (JNJ)
Market Cap: $273.8 billion
Sector: Health Care/Pharmaceuticals
Total Cash: $33.1 billion
Year-to-date return: -5.6%

Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Device.

TheStreet Ratings: Buy, A-
TheStreet Ratings said:
"We rate JOHNSON & JOHNSON (JNJ) a BUY. 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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • JNJ's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JNJ has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, JOHNSON & JOHNSON has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • JOHNSON & JOHNSON's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JOHNSON & JOHNSON increased its bottom line by earning $5.70 versus $4.82 in the prior year. This year, the market expects an improvement in earnings ($6.14 versus $5.70).
  • JNJ, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

 

ORCL Chart ORCL data by YCharts

6. Oracle Corp. (ORCL)
Market Cap: $196.1 billion
Sector: Technology/Systems Software
Total Cash: $44.7 billion
Year-to-date return: -0.13%

Oracle Corporation develops, manufactures, markets, hosts, and supports database and middleware software, application software, cloud infrastructure, hardware systems, and related services worldwide.

TheStreet Ratings: Buy, A
TheStreet Ratings said:
"We rate ORACLE CORP (ORCL) a BUY. 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, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

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

  • ORCL's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • ORACLE CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.39 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($2.86 versus $2.39).
  • ORCL's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.48 is very high and demonstrates very strong liquidity.
  • After a year of stock price fluctuations, the net result is that ORCL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

 

CSCO Chart CSCO data by YCharts

5. Cisco Systems Inc. (CSCO)
Market Cap: $147.1 billion
Sector: Technology/Communications Equipment
Total Cash: $53 billion
Year-to-date return: 4%

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide.

TheStreet Ratings: Buy, A
TheStreet Ratings said:
"We rate CISCO SYSTEMS INC (CSCO) a BUY. 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, solid stock price performance, notable return on equity, reasonable valuation levels and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

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

  • CSCO's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, CISCO SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 11.4% when compared to the same quarter one year prior, going from $2,187.00 million to $2,437.00 million.

 

PFE Chart PFE data by YCharts

4. Pfizer Inc. (PFE)
Market Cap: $209.2 billion
Sector: Health Care/Pharmaceuticals
Total Cash: $53.6 billion
Year-to-date return: 9.1%

Pfizer Inc., a biopharmaceutical company, discovers, develops, manufactures, and sells healthcare products worldwide.

TheStreet Ratings: Buy, A-
TheStreet Ratings said:
"We rate PFIZER INC (PFE) a BUY. 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PFE has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PFIZER INC is currently very high, coming in at 86.14%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PFE's net profit margin of 21.87% significantly trails the industry average.
  • PFIZER INC has improved earnings per share by 8.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PFIZER INC reported lower earnings of $1.42 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($2.04 versus $1.42).

 

 


GOOGL Chart GOOGL data by YCharts

3. Google Inc. (GOOGL)
Market Cap: $186.2 billion
Sector: Technology/Internet Software & Services
Total Cash: $64.4 billion
Year-to-date return: 3%

Google Inc., a technology company, builds products and provides services to organize the information.

TheStreet Ratings: Buy, B
TheStreet Ratings said:
"We rate GOOGLE INC (GOOGL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • GOOGL's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 11.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Although GOOGL's debt-to-equity ratio of 0.05 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.28, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for GOOGLE INC is rather high; currently it is at 69.99%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.77% is above that of the industry average.
  • Net operating cash flow has significantly increased by 50.69% to $6,617.00 million when compared to the same quarter last year. In addition, GOOGLE INC has also modestly surpassed the industry average cash flow growth rate of 41.44%.

 

MSFT Chart MSFT data by YCharts

2. Microsoft Corp. (MSFT)
Market Cap: $373 billion
Sector: Technology/Systems Software
Total Cash
: $90.2 billion
Year-to-date return: -1%

Microsoft Corporation develops, licenses, markets, and supports software, services, and devices worldwide. The company's Devices and Consumer (D&C) Licensing segment licenses Windows operating system and related software; Microsoft Office for consumers; and Windows Phone operating system.

TheStreet Ratings: Buy, A-
TheStreet Ratings said:
"We rate MICROSOFT CORP (MSFT) a BUY. 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, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

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

  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.65 is very high and demonstrates very strong liquidity.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for MICROSOFT CORP is currently very high, coming in at 74.02%. Regardless of MSFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MSFT's net profit margin of 22.94% compares favorably to the industry average.
AAPL Chart AAPL data by YCharts

1. Apple Inc. (AAPL)
Market Cap: $733.4 billion
Sector: Technology
Total Cash: $178 billion
Year-to-date return: 10.8%

Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, watches, and portable digital music players worldwide.

TheStreet Ratings: Buy, A
TheStreet Ratings said:
"We rate APPLE INC (AAPL) a BUY. 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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • Powered by its strong earnings growth of 40.36% and other important driving factors, this stock has surged by 37.00% 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 40.4% 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 two years. We feel that this trend should continue. During the past fiscal year, APPLE INC increased its bottom line by earning $6.43 versus $5.66 in the prior year. This year, the market expects an improvement in earnings ($8.97 versus $6.43).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 32.7% when compared to the same quarter one year prior, rising from $10,223.00 million to $13,569.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 33.3%. Since the same quarter one year prior, revenues rose by 27.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.

 

 

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