Apple (AAPL) manufactures and sells a range of technology products, including smartphones, personal computers, tablets, and headphones. I am bullish on the stock.
If you could only buy and hold one stock and then someday bequeath it to your grandchildren, AAPL would be as good a choice as any.
It's a legacy business with vast influence, to the point where people willingly cough up $1,200+ for a smartphone mainly based on Apple's reputation.
Apple's not a big dividend payer, as the forward annual yield is a meager 0.51%. However, Apple's trailing 12-month price-to-earnings ratio of 31.4 suggests that its stock isn't overpriced. (See Analysts’ Top Stocks on TipRanks)
Indeed, the stock is so attractive that one company has been hoarding millions of AAPL shares - and this should bolster any Apple investor's confidence.
The Poster Child for BuybacksGreat companies love to invest in themselves - literally. Apple is no exception to this rule, and one financial expert spotted a clear trend when it comes to stock-share repurchases.
According to recent data from S&P Dow Jones Indices Senior Index Analyst Howard Silverblatt, around 53.8% of third-quarter stock buyback activity was fueled by the top 20 companies.
Can you guess which company was at the top of Silverblatt's top-20 list of third-quarter buyback kings?
Of course, it's none other than Apple. Reportedly, the company repurchased a staggering $20.45 billion worth of its own shares during the quarter.
"Apple continued to be the poster child for buybacks as it again spent the most of any issue, with the Q3 2021 expenditure ranked eighth highest in S&P history," Silverblatt commented.
This is significant, as it indicates Apple's confidence in itself as a successful business venture. In light of the company's major self-investment, anyone sitting on the fence should consider a long position in AAPL stock.
Stable Manufacturing DataDon't get the wrong idea - investors shouldn't buy a stock just because the company's buying it.
With a gadget maker like Apple, manufacturing data is essential in assessing the company's future prospects. Fortunately, Apple's recently released numbers are absolutely outstanding.
According to Morgan Stanley analyst Katy Huberty, iPhone build rates in the December quarter "remain stable," coming in at an 82 million-unit quarterly rate.
That throughput rate is quite impressive in a time when tech components are in short supply.
Furthermore, the Morgan Stanley analyst observed that the lead times for the iPhone 13 Pro and Pro Max models, as of December 21, were down to just two days, from 20 days one month prior to that.
Not only that, but China posted iPhone shipment growth of 46% year-over-year for the quarter through November. Again, it's evidence that Apple won't be slowed down even amid global supply-chain issues.
Wall Street's TakeTurning to Wall Street, Apple has a Strong Buy consensus rating, based on 21 Buys, four Holds, and one Sell assigned in the past three months. The average Apple price target of $175.28 implies 0.6% downside potential.
The TakeawayMost Wall Street analysts seem to be bullish on AAPL stock, and who could really blame them?
Apple's P/E ratio suggests that the shares aren't particularly expensive - and the company's stock buybacks indicate the company's supreme confidence in itself.
So, it's likely that the buy-side analysts are spot-on with their optimistic outlook on AAPL stock. If you're in the market for an asset to buy, hold, and forget about, Apple is a core investment you can probably count on.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >
Apple (AAPL) is executing its operations remarkably well amid persisting chip shortages and other manufacturing disruptions. Continued demand for its products and services, including the iPhone, Apple TV+, and Apple Fitness+ are moving the company forward.
Financial Health is a BoonApple’s strong balance sheet and cash flow generation capabilities instill confidence in investors. Cash & marketable securities at the end of its fourth quarter of Fiscal 2021 were recorded at $190.52 billion, compared with $118.72 billion of term debt (active loan repaid in installments over a set period of time), leaving the company enough net cash to pursue growth strategies.
Significantly, the company returned $24 billion in the last reported quarter, of which AAPL dividends constituted $3.6 billion.
Focus on Virtual and Augmented RealityApple's focus on autonomous vehicles and augmented/virtual reality (AR/VR) technologies, which present lucrative long-term growth opportunities, are currently attracting Wall Street analysts to Apple stock.
Apple has acquired several small firms dealing in AR hardware, 3D gaming, and VR software over the last few years, including Spaces, SensoMotoric, Flyby Media, and Emotient, among others.
Additionally, Apple’s ARKit framework is aiding the development of AR experiences for its iOS platform by third-party developers.
The industry is anticipating the release of Apple’s AR/VR headset around the end of 2022, causing many analysts to revise their stance on the company’s prospects.
Wall Street Weighs InRecently, J.P. Morgan analyst Samik Chatterjee reiterated a Buy rating on AAPL stock and raised his price target to $210 from $180. He said that Apple is his top stock pick for 2022. Incidentally, Wedbush analyst Dan Ives and Evercore ISI analyst Amit Daryanani also count Apple stock among their favorite picks for the upcoming year.
The optimism on Wall Street is reflected in the Strong Buy consensus rating for Apple based on 21 Buys, 4 Holds, and 1 Sell. The average AAPL price target of $175.28 indicates that shares are currently fully priced, however, the top end of the price forecasts over the next 12 months indicates almost 20% upside potential from current levels.
Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >