April 28, 2015

VALUATION WATCH: Overvalued stocks now make up 60.7% of our stocks assigned a valuation and 22.44% of those equities are calculated to be overvalued by 20% or more.  Fourteen sectors are calculated to be overvalued--with seven at or near double digits.

--Keeping the Doctor Away (AGAIN)

Apple Posts Impressive Results for Q2

Apple Inc. (AAPL) is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. It sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers. Apple Inc. is headquartered in Cupertino, California.

This is getting to be the broken record of earnings releases, Apple yesterday announced record results once again. For Q2 2015, the company posted record sales for iPhones and Macs as well as the App Store. The company is in the enviable position where they can raise prices on products AND increase market share at the same time. For example, iPhones sold for @ $60 more on average than the same period last year.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said Tim Cook, Apple’s CEO. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

“The tremendous customer demand for our products and services in the March quarter drove revenue growth of 27 percent and EPS growth of 40 percent,” said Luca Maestri, Apple’s CFO. “Cash flow from operations was also outstanding at $19.1 billion.”

The company also announced additional dividend increases as well as a massive increase in its share repurchase program on Monday. The dividend was increased 11% while company increased the size of the share repurchase program from $50 billion to $140 billion. The company now enjoys a truly massive cash reserve of almost $200 billion. According to the Wall Street Journal, that is more than the market cap "of all but 15 other companies in the S&P 500."

Big growth in China is driving Apple to new heights and is now the company's second-largest market behind the US. The company bucks another trend here, given the fact that they are posting these huge foreign gains at a time when the strong dollar is hurting other companies reliant on foreign sales and markets.

All this good news occurs with little down side--other than the fact that the big pick ups in new phone sales seem to be cannibalizing sales of iPads somewhat as larger phones mean fewer people feeling to need to carry a tablet. And, it is important to note that these results do NOT include the company's newest product, the iWatch.

ValuEngine continues its BUY recommendation on APPLE INC for 2015-04-27. Based on the information we have gathered and our resulting research, we feel that APPLE INC has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Sharpe Ratio.

New iPhones have Bolstered Apple's Bottom Line

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Read our Complete Detailed Valuation Report on APPLE HERE.

Below is today's data on AAPL :

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	133.72	0.80%
3-Month	135.93	2.47%
6-Month	139.69	5.31%
1-Year	145.44	9.64%
2-Year	162.70	22.65%
3-Year	89.08	-32.85%

Valuation & Rankings
Valuation	19.17% overvalued	Valuation Rank(?)	23
1-M Forecast Return	0.80%	1-M Forecast Return Rank	94
12-M Return	56.30%	Momentum Rank(?)	93
Sharpe Ratio	1.08	Sharpe Ratio Rank(?)	94
5-Y Avg Annual Return	26.20%	5-Y Avg Annual Rtn Rank	92
Volatility	24.23%	Volatility Rank(?)	71
Expected EPS Growth	12.83%	EPS Growth Rank(?)	49
Market Cap (billions)	772.65	Size Rank	100
Trailing P/E Ratio	16.69	Trailing P/E Rank(?)	72
Forward P/E Ratio	14.79	Forward P/E Ratio Rank	65
PEG Ratio	1.30	PEG Ratio Rank	39
Price/Sales	3.87	Price/Sales Rank(?)	25
Market/Book	6.76	Market/Book Rank(?)	20
Beta	0.79	Beta Rank	60
Alpha	0.41	Alpha Rank	95

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