Every investor’s big question seems to be, “Should I buy Apple (NASDAQ:AAPL)?”
Last week (and before their earnings), I was clear – “you should own AAPL.” And some people went out and did buy Apple. But now the question transitions from “Should I buy AAPL?” to “Is it too late to buy Apple?”
Shares of Apple are up 57% from $380 in December. Giant companies generally don’t move 57% in 10 years, let alone five months.
While it’s a huge business, AAPL remains a growth company. New trendy products such as the iPad lifted sales over the past several quarters. And it was the iPhone with 34 million units sold that surprised analysts last Tuesday.
Apple notoriously beats analyst estimates. But they slaughtered them last Tuesday evening. While the experts called for AAPL to report $9.98 EPS, I went out on what I thought was a limb, expecting something above $11 EPS.
Apple did last week Tuesday what Apple does best: crush analyst estimates. EPS rolled in at $12.30 versus $9.98 expectations (and way above my $11, too). Revenue popped to $39 billion versus the expected $36.8 billion. iPad sales missed expectations, but that didn’t seem to bother shareholders who are still celebrating the cash dividend announcement.
While the share price has increased 50% this year, the average analyst estimate calls for $680. But expect that to rise.
Topeka Capital was the first, raising their AAPL target to $1,111 from $1,000.01, though this was probably a PR move in some respect. But other investment houses are likely to follow suit this week because AAPL destroyed previous guidance estimates.
AAPL has become so popular that 46 of the 53 analysts that cover it have a “Buy” rating. Many, including myself, believe AAPL has more upside to come.
This video focuses on the recent run-up and analyzes the potential near-term upside for the stock. Additionally, the video will discuss at what point the shares are likely to top and where you can place a stop loss to protect your bullish trade.
Editor, TopStock Insights
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