Apple Inc Stock Forms Positive Divergence On Large Players Volume

Apple Inc stock has formed a positive divergence on large players volume after Sanford C. Bernstein upgraded the stock to an Outperform rating and set a price target of $175.

Royal Bank Of Canada reiterated its Buy rating today and price target of $180.

There is a total of 7 Hold ratings and 41 Buy ratings on Apple Inc stock. The consensus price target is $193.09 which represents a 23.64% upside from the current price.

Apple Inc Stock Catalysts

Catalysts that will drive Apple stock are: the new iPhone 8 and iPhone X, Watch 3, 4K TV, and $1 billion investment in acquiring original content to break into film distribution and grab market-share from NetFlix.

Apple’s stock should not only benefit from the upcoming iPhone cycle but also from the company’s capital distribution initiative and attractive valuation.

MarketWatch published this good article on Apple’s catalysts.

Apple Inc Stock

The strong uptrending large players volume is a thing of beauty. Apple stock’s most recent drop on negative news reports about weak iPhone 8 sales was met with more large players buying the dip. The positive Twiggs Money Flow suggests that the stock is being accumulated.

The good thing about Apple stock is that it is not thinly traded and its a mega-cap stock. Often times swing traders run into issues of liquidity when trading in and out of high beta small cap stocks. That is not a problem with Apple. I did a swing trading lesson on thinly traded stocks here.

Apple Inc stock looks like a good long entry. Prices have been consolidating lately. There is a resistance zone just above the current price starting at $156.72. Right above this resistance zone may be a good entry point. There is a support zone below the current price at $155.85, a stop order could be placed below this zone.

Apple Inc Review
3.3

Summary

Profitability

AAPL's Return On Assets of 13.52% is among the best returns of the industry. AAPL outperforms 90% of its industry peers. The industry average Return On Assets is 1.33%. AAPL has a Return On Equity of 35.23%. This is better than the industry average of 16.23%. AAPL has a Profit Margin of 20.87%. This is among the best returns in the industry. The industry average is 0.69%. AAPL outperforms 93% of its industry peers. AAPL has a Piotroski-F score of 5. This indicates an average health and profitability for AAPL.

Valuation

Compared to an average industry Price/Earning Ratio of 28.02, AAPL is valued a bit cheaper than its industry peers. With a Price/Earnings Ratio of 17.70, AAPL is valued on the expensive side. The Forward Price/Earnings Ratio of 14.24 indicates a correct valuation of AAPL. The PEG Ratio, which compensates the Price/Earnings for growth, indicates a fair valuation of the company. When comparing the current price to the book value of AAPL, we can conclude it is fairly valued. It is trading at 6.09 times its book value. When comparing the price book ratio of AAPL to the average industry price book ratio of 3.48, AAPL is more expensive than its industry peers.

Growth

AAPL is expected to show strong growth in Earnings Per Share. In the coming 2 years, the EPS will grow by 14.92% yearly. When comparing the growth rate of the last 5 years to the growth rate of the upcoming 2 years, we see that the growth is accelerating. The Earnings Per Share has been growing slightly by 2.79% over the past year. Measured over the past 5 years, AAPL shows a small growth in Earnings Per Share. The EPS has been growing by 6.94% on average per year. Looking at the last year, AAPL shows a small growth in revenue. Revenue has grown by 1.46% in the last year. Measured over the last 5 years, revenue has been growing by 7.39% yearly.

Health

AAPL has an Altman-Z score of 4.03. This indicates that AAPL is financially healthy and has little risk of bankruptcy at the moment. When comparing the Altman-Z score to an average industry Current Ratio of 2.20, AAPL is in better financial health than the average industry peer. AAPL has a Current Ratio of 1.39. This is a normal value and indicates that AAPL is financially healthy and should not expect problems in meeting its short term obligations. AAPL has a Quick Ratio of 1.35. This is a normal value and indicates that AAPL is financially healthy and should not expect problems in meeting its short term obligations. The Quick Ratio is inline with the industry averages, which is at 1.36. The Piotroski-F score of AAPL is 5. This is a neutral score and indicates average health and profitability for AAPL. Compared to an average industry Current Ratio of 1.80, AAPL is worse placed to pay its short term obligations than its industry peers. Compared to an average industry Debt to Equity Ratio of 0.00, AAPL is requires more financing than its industry peers. 82% of its industry peers have a better Debt to Equity Ratio.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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Author: Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.

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