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Apple (AAPL)

This global tech company beat estimates by eight cents in its latest quarter. During the fourth quarter, both Pacific Crest and Maxim Group upgraded their ratings on the stock to ‘Overweight’ and ‘Buy’, respectively.

Apple (AAPL)
From Heartland Adviser

When it comes to Apple (AAPL), there is a major conflict between investment analysts in their Wall Street skyscrapers and Main Street.

The analysts have been almost consistently negative when it comes to Apple. They always find some problem such as iPhone sales may not be all that good or there is going to be an economic slowdown in China.

Moving to Main Street, we see a different story. Apple’s earnings are growing and it is expected to earn $9.05 per share in 2015 and probably even more in 2016. This translates into a return on equity of 46%--among the highest of exchange-traded stocks.

Apple has a large and ardent customer base, or what Warren Buffett would call a moat. Many people when they need computers or iPhones go straight to the nearest Apple store.

Apple is among the bluest of the blue chips with a Value Line rating of A++. It has a huge hoard of cash which can be used for acquisitions and research and development.

On a value basis, Apple is trading at a price/earnings ratio of 12, which is ridiculously low for a growth stock—especially when the price/earnings ratio for the market averages is about 18.

As for people who put their money where their mouth is, investment manager Carl Icahn has a huge amount of Apple shares and keeps buying more. (WSBI Editor’s note: as of 9/30/15, Icahn owned almost 53 million shares of AAPL). His expertise will be a great benefit to the company.

Russ Kaplan, Heartland Adviser,, 402-614-1321, December 30, 2015