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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
  • File format: Text
  • Number of pages: 2

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Apple Inc. is a multinational corporation which engages in the design, manufacture, and marketing of mobile communication, media devices, personal computers, portable digital music players and digital media streaming services. The company operates through different geographical segments, all combined would cover the entire globe. Founded by Steven Jobs, Ronald Wayne and Stephen Wozniak on April 1, 1976. Today, Apple is valued at $170bn and is labeled as the most valuable brand in the world for a seventh consecutive year. (forbes.com) Apple's products exponentially gained popularity around the world and continues to do so. Their devices make news' headlines months before the actual release making apple a safe investment.

 

Apple racked up a total cash reserve of about $250bn, majority of which is stashed offshore as a tax haven, however president Donald Trump's new tax code would allow that cash to repatriate without being hit with a huge levy. The company represents about 4 per cent of the $21.7 trillion that makes up the entire S&P 500 benchmark stock index according to Reuters news agency. (independent.uk.)

The company's return on equity which measures a firm's efficiency at generating profits from every unit of shareholders' and shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desirable. However as of September 30th 2017 Apple is operating with a ROE of 36.87%. AAPL recorded earnings per share of $9.20. EPS measures the company's earnings per outstanding share after subtracting the dividends of preferred stocks from the total net income. Over the next five years, the analysts that follow this company are expecting it to grow earnings at an average annual rate of 11.17%. This year, analysts are forecasting earnings increase of 21.44% over last year. Analysts expect earnings growth next year of 3.49% over this year's forecasted earnings. (Nasdaq.com/gurufocus.com) The past 4 quarters the company recorded an average earnings surprise of 6.345%, with a 10.7% just in the last quarter. Over the next five years, the analysts that follow this company are expecting it to grow earnings at an average annual rate of 11.17%. This year, analysts are forecasting earnings increase of 21.44% over last year. Analysts expect earnings growth next year of 3.49% over this year's forecasted earnings. (Nasdaq.com)

The beta is a quintessential aspect of stock analysis. AAPL currently has a beta of 1.34. The beta is a measurement of volatility in comparison to the market.  A beta of 1 or lower indicates that the stock is less volatile than the market.  Anything over 1 indicates that it is highly volatile and unpredictable. The beta proves the Apple being a safe investment, protecting from unpredictability and volatile risk. (finance.yahoo.com) Overall, Apple Inc. is a safe investment that insures future earnings growth.

After evaluating all four stocks, I determined that each of 4 stocks would be good investments as all four are guaranteed to yield earnings. BABA's marketplace for retail and wholesale has a worldwide reach with heavy control on the Pacific east Asian market the stock is bound to recover strong. AMZN however could be too volatile now (ß:2.66). According to the Arora Report, there is a 35% probability of Amazon hitting $1,300 over the next year. There is a 45% probability of Amazon hitting $700 over the next year. (marketwatch,2017) Although the percentage is higher for the stock to dip, it depends on how much you value risk. I'm betting on the stock to grow further. Amazon never seems to lay low, they make earnings regularly and they look to grow further with their latest move acquiring wholefoods in August that sent their stock on a huge run. GE appears to be in a difficult spot and tumbled 9.3% in November, as new Chief Executive John Flannery's turnaround plan unveiled in November failed to assuage investor concerns. On Thursday, GE shares tacked on 0.1% in premarket trade, after the company said its power business was cutting 12,000 jobs, given “significantly lower volumes” in products and services. (marketwatch,2017) Moving forward, the company seems to be making moves to satisfy investors, makes buying shares while it's on the low-end intriguing. After all, if the new CEO succeeds in his plans then the worst might just be over for GE. Overall, investing right now seems like a good move as the stock market is headed into a bliss with the recent tax code adding fueling the fire.

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