Katie Tomaselli
Economics P.1
Apple, Inc.
Ticker Symbol- AAPL
Current Price- $258.77
52 Week High- $279.01
52 Week Low- $167.9
EPS- $13.29
Price Earnings Ratio- $15.44
Stock Volume- 18.59 Million, stock volume has been increasing over last 10 years
Apple, Inc. was founded in 1976 in Cupertino, California, under the name
Apple Computer, Inc. Apple is a leading competitor in the technological
market. They produce some of the most prominent computers, software, multimedia devices, and portable music players on the market. Some of their most
popular products include Macintosh computers and laptops, iPods, iPads, and
iPhones. They are a massive company and sell products both online and in their
high-tech stores worldwide. Apple’s biggest competition is other large
technology companies such as Dell, Microsoft, and Sony. There is a large group
of individuals who make up the management team of Apple industries. Some of
the top officials include, Steven Jobs CEO and Director, Peter Oppenheimer
CFO and a senior vice president, and Timothy Cook who is the Chief Operating
Officer. Apple, Inc. was previously known as Apple Computer, Inc. until 2007,
when they dropped the “computer” to reflect how they produced much more
technology than computers. Apple currently employs about 34,300 individuals,
and as of 2009 had 273 retail stores worldwide. Apple’s competitive
advantages are their accessible easy-to-use products that appeal to the
consumer with their modern designs, their attractive marketing techniques, and
also their cutting edge technology.
*In Millions
Net Income
2009
$8,235
2008
$6,119
2007
$3,495
Total Sales
Total Expenses
$36,537
$7,658
$32,479
$6,275
$24,066
$4,409
New products added in the last three years include, new and improved lines of
iPods, new iPhones (3G, 3GS, and iPhone 4), the iPad, two versions of an Apple
TV, and a new version of iTunes that includes ping, genius, and cheap movie
and TV show rentals. These products have all helped make a jump in sales and
increase stock volume.
The current state of the U.S. stock market isn’t in complete peril, but it has
dropped some with our current economic recession. As individuals loose their
jobs or their pay is reduced they will cut back on spending, mostly on the
pending of luxury goods. Also the prices of gas, oil, and food are going up
which will also leave less room for the spending on luxury items. The gas industry
for example has remained relatively static, because gas will always maintain an
inelastic demand curve even as price rises. Also, people may not be investing
as much due to reduced income. Apple stock has not been affected very
much by the state of the stock market, their stock volume ha for the most part
been increasing but at the same time so has the price. Only time will tell how
the current economy will affect the stock market in the future.
The state of the economy is that the U.S. is currently in an economic
recession. The current inflation rate is on the rise, but is not that high compared
to inflation in the past. Unemployment though is up to 9.6% as of August 2010,
this figure is drastic considering the unemployment rate was 5.8% in July of 2008.
Also wages and hours have been cut nation wide and the nationwide average
wages for hourly work is $22.66, and has been close to this figure all year. The
entire nation is currently and estimated 13,444,496,046,138.49 dollars in debt.
Arizona alone has received between 2.5 and 5 billion dollars in stimulus from the
government. The economy affects the price of stock because for the most part
as the economy has begun to decrease stock volumes and prices have been
affected. The country is not bouncing back from this recession, as quickly as
expected though, so far it has been a slow process.
Christoper Lynn stated in his article “Stock Futures Edged Higher.
Stocks To Watch: Aapl, Cvx, Nok, Txn, Trw”, published on September 10,
that if Apple stock were to pass the 265 dollar amount then it would
definitely we a hot stock to watch. He also stated that if the stock price
continues to fall that the stock price could continue to be pushed lower by
buyers. Jeff Kearns says in the article, “ Buy Apple Call Options on IPad Sales
Boost, Morgan Stanley Analysts Say”, published on September 9, that since iPad
sales have been so high and are only expected to get higher in coming months
that now is a good time to buy Apple stock. The article also maintains that iPad
production could double in the next months. He asserts that Apple’s demand is
always rising and is the top technological company. This article would definitely
have a positive effect on Apple stock. A final article, “New Apple Products Spell
Big Opportunities”, written by Eric J. Savitz, focused on four new products and
futures that have recently been rolled out by Apple. A new line of iPods, a new
Apple TV, iTunes 10 which now offers ping, a social networking tool, and 99-cent
TV show rentals. All of these new products are sure to increase sales and thus
have a very positive effect on the trends of Apple stock, hopefully giving them
that extra push to get to the next level of stock value. Overall, with Apples new
roll out of products the last few weeks the out look is very good right now for
Apple stock and now would be the time to buy.
The market for Apple’s products is technological, because they specialize
in computers, portable media devices, and software systems. These products
Apple produces are the most cutting edge on the market. Apple ranks as one
of the very top competitors and the top producers of computers and portable
media devices in this market. Their biggest competitors include Microsoft, IBM
and Dell, but also Sony and Google. Their consumers are very wide spread and
of all ages, because people love Apples easy to use and innovative products.
The technological market is defiantly increasing very fast and Apple is one the
front line coming out with all of the latest products first. This market will only
continue to increase rapidly so Apple will defiantly be a company to watch.
Brett Arends of Money Watch maintains in an article written on May 4,
2010, and posted on Yahoo Finance, that now is definitely a good time to buy
Apple. He states that as iPad sales continue to increase so will the stock prices.
He shows that Apple stock is about to near it’s all time high and break previous
stock volumes. Standard & Poor’s equity analyst Clyde Montevirgen express in
an article from Business Week, on June 30, 2010, that now is a good time to buy
Apple stock. He recommends it as a strong buy and says that a $325 would be
the target price. Finally, Anand Chokkavelu, said in an article posted on
September 11, 2010 on The Motley Fool, that really the price of Apple stock was
a bargain, compared to its estimated growth rate for the next five years. He
recommends buying Apple because growth can be expected and the current
price is sure to multiply. His data even shows that Apple’s current price earning
ratio or one year is and estimated 19.6 and in five years the estimated price
earnings ratio should be 29.9, proving that apple really is a cheap buy right now.
Over all the experts seem to agree that buyers should go for Apple, and hold on
to the stock, because it has the potential to make big bucks in the future years.
After doing extensive research on the company Apple Inc. (AAPL) and
observing the trends of its stock, I would definitely recommend it as a good buy.
They have been in business for 34 years, but in the last ten their stock value has
made an enormous leap. Apple stock is expensive but it has a lot of promise for
the future. Apple is a large company with high yearly revenue compared to its
competitors. Their sales have also made a large increase in the last three years,
about 12,471 million dollars since 2007. This is due mostly to the new and cutting
edge products they have introduced in the last few years that have all received
positive feedback. The new iPods, iPhones, and iPads are all helping to increase
sales and stock value. Experts are saying that the expected boom in sales of
iPads alone in the next few months is likely to help increase Apple’s stock value.
Even though they only produce luxury items I think people will continue to buy
their products in mass quantities. In the future our economy is sure to improve
and people will be spending more on these luxury items. As a consumer and
overall fan of their trendy technology I would want to purchase this stock. I
would recommend purchasing and holding for five to seven years to allow the
stock to gain more value before selling. I’m supporting this recommendation
because figures show their sales are likely to increase as they keep developing
new products and they are expected to have around a 20 percent growth in
the next five years. I cannot invest in this company right now because I find the
price to be too high, and I wouldn’t be able to buy enough stock volume, but I
would recommend that someone who was looking to invest a larger sum of
money to consider investing in this rapidly expanding company.
Sources
http://www.google.com/finance?client=ob&q=NASDAQ:AAPL
http://finance.yahoo.com/banking-budgeting/article/109446/why-everyoneshttp://www.cnn.com/SPECIALS/map.economy/index.html
http://www.fool.com/investing/general/2010/09/11/how-much-of-a-bargain-isapple-stock-right-now.aspx
http://www.businessweek.com/investor/content/jun2010/pi20100630_025085.ht
m
afraid-of-apple?sec=topStories&pos=4&asset=&ccode=
http://www.tradershuddle.com/2010091080826/Stocks/stock-futures-edgedhigher-stocks-to-watch-aapl-cvx-glw-mr-nok-txn-trw.html
http://www.bloomberg.com/news/2010-09-09/buy-apple-call-options-on-ipadsales-boost-morgan-stanley-says.htmll
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http://www.bls.gov/eag/eag.us.htm