There are times when a stock's popularity is just too big to ignore. IBM was such a company in the 70's as was Micrsoft in the 90's. For those 2 readers who don't know about them Apple (AAPL) designs, manufactures and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. To the rest of the world Apple will take us to places we have never even dreamed of going and do things we didn't even know were necessary. Apple just doesn't fulfill a need they create one.
Whenever I want to fell ancient I just go to an Apple Store and stand behind some 8 year old and watch them play with the new Apple products. I find myself talking like Steve Urkel but instead of saying" Did I do that?"; I find myself saying " I didn't KNOW I could do that!"
Why do I think Apple is the most popular stock on the planet? Over on Motley Fool 23,758 members have given an opinion on the stock -- more than any other. 21,803 are positive to the 1955 that think it can't beat the market. Even the experienced All Stars vote 4559 to 235 that it will beat the market. Fool notes that all 45 of the last articles about the company have been positive. If that isn't hero worship I don't know what is.
Wall Street is also in awe with 37 buy, 4 hold and only 2 under perform reports published. Sales increases of 61.60% this year and 16.80% next year are estimated with earnings increases of 46.70% this year, 15.10% next year and a 5 year compounded EPS growth rate of 16.47% expected.
There seems to be no doubt that Apple will grow but with all the herd following them are they worth their 20.4 price earnings ratio? The growth in I-Pad sales and new products that they always seem to create have analysts looking for a price between 400 and 480 in the next 5 years from the 250 where it is selling now.
The stock has lost 7.61% in the last 30 days but that is less than the 11.89% the market as measured by the Value Line Index has lost.
The stock is presently trading below it's 20 day moving average but still above its 50 and 100 day moving average.
Citibank and Bank of America may not be too big to fail but it seems that Apple may be too popular to fail.
Jim Van Meerten is an investor who writes on investing on Barchart Portfolio Blogs and Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: No position in AAPL at the time of publication
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