by Charly Mann
6-15-2010 : The best metric for deciding the worth of a stock is its price earnings per share ratio, referred to as the P/E. Today Apple has a P/E of 21.82.This is because Apple's current yearly earnings per share is $11.78 and the stock price at the moment I am writing this is $257.03.
Companies that have a lot of growth potential command a higher PE than those that do not. Currently Apple's P/E is comparable to that of Google, Intel, and Cisco. On the other hand Amazon and Netflix currently have PE ratios more than twice that of Apple's. Of all these companies we strongly believe that Apple has the strongest growth and profit potential. The newly introduced iPad has already exceeded everyone's sales prediction, and over the course of the next year we believe it will become the leading game and portable reading device. This will not only expand the market for iPads but will significantly increase Apple's revenue and profit from game and book sales. (Apple keeps 30% on every book, game, or other application it sells).
We also see continued explosive growth of the iPhone, and believe the new features on its latest model including face to face video communication, better call reliability because of the newly designed antenna, HD video recordings, greatly improved graphics and resolution, and the ability to simultaneously run multiple applications will make the iPhone far more popular than it already is.
Of course Apple continues to open more of its highly successful Apple Stores around the globe, and more major vendors are also carrying their products such as Wal-Mart which has done great with the iPod and IPhone and will soon be carrying the iPad. The consensus of most analysts who follow Apple is that next year's earning for company will be between $15.77 and $16.20 a share. Our own estimates are $16.70 a share. Based on these numbers we see a conservative price target for Apple's shares in the coming twelve months to be $320, and a more realistic target of $338 based on a PE of only 20.29.
by Charly Mann
Sometime between this September and February of 2010 Apple is set to launch a device that will revolutionize the computer, entertainment, and gaming industry. The unofficial name of this product is the iTablet. Most reliable sources say that it will have a ten inch 720×480 multi-touch display resembling an enlarged iPhone or iTouch.
One concept of what the iTablet will look like
This device will combine almost every widely used electronic device into an innovative and ideally sized platform. As a music player it will perform all the functions of the iPod, but with good speakers and a display that will more closely mimic an album cover. It will also be a wonderful portable HD video platform for downlable movies and streaming video. For communication the large touchscreen keyboard will make emai,text, and intant messages much easier to compose and read, and will be ideal for video conferencing.
We expect the device to have some form of the fabulous Snow Leopard operating system so that it can run almost any full featured software application, as opposed to the stripped down ones found on the iPhone. In addition we expect it will take advantage of voice recognition in many of its applications including word processing. Its large screen is expected to have the option of being used with a pen for painting, drawing, and handwriting.
The touch screen size and resolution also makes it ideal as a portable GPS device, and we expect there will be GPS software available for it.
Another idea of what the iTablet may resemble
It will be the perfect sized book reader, and because it will be able to display pictures in color it will be superior to all other e-book readers including Amazon’s Kindle. We believe Apple will soon have a downlable bookstore that rivals its iTunes selection, and that in a few years it will be the largest seller of books in the world, just as it is now with music. In addition Apple has long been a favorite in the education community, and textbooks are a huge potential market for a device like this. With color photographs and links to the internet in textbooks, the iTablet has a good chance of soon dominating this market. One more thing, with color capability and the sharpness of its resolution, it will probably become the favorite means for reading comic books.
Finally we think this is going to be the most popular gaming device ever. The current iPhone already has a more powerful processor than the Sony PSP and the Nintendo DS, but we expect this thing to have a processor that will rival the XBOX, PS3 or Wii, and combined with Apple’s great touchscreen technology, this gaming device will be awesome. And one will no longer need to go out and buy games for it. They will all be downloadable from the Apple Store.
We believe the iTablet will draw many more people to the Mac and iPhone, and that as a product category it will become Apple’s #1 source of revenue within three years. Look for Apple' s stock to double from today’s price within two years because of the addition of the iTablet to Apple’s product mix.