Wednesday, January 25, 2012
In a season of mediocre earnings reports for 2011 fourth quarter, with tech companies like Yahoo (YHOO) and Google (GOOG) trailing behind, there is one company that made historic treads. Apple Inc. now the most valuable company in the world, reported earnings that "single handedly erased a drop in the S&P 500 for the December quarter" according to Bloomberg LP. Wall Street was estimating an average earnings of $10 a share. But similar to their products, the stock exceeded all expectations, rounding out at $13.87 a share and $48.6 billion in revenue. The stock price, which is trading at a resistance of around $449 a share, sets the company worth over $400 billion. Overall during the fourth quarter, Apple sold 37 million iPhones, and 15.5 million iPads.
Is Apple still a good buy?
A hold position would be better. Apple still needs a price adjustment after shooting up $30-$40 a share in seconds, but also there will soon be some major activity within the company. Apple is sitting on a cash hoard of almost $100 billion, enough to buy out some European countries and still be able to produce iPhones and iPads. Some are speculating a dividend round. Others, as am I, are speculating a buyout of supply side companies, making Apple a huge horizontally built conglomerate. If this happens, this would be a very good cost cutting move for Apple, allowing better margins and profits per device. Apple, I believe, still has potential. Some analysts are estimating Apple stock to reach between $500 and $575 a share in a year's time.
Whatever is going on there in Cupertino though, they are doing something right. Kudos to CEO Tim Cook and his team. He's gained approval of fans and share holders.
By: Marcus Calpakis
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