Trading Apple Inc. Ticker: AAPL, is just getting started. 10-Q earnings with year over year growth of 82%, one might think there is no more room to expand. One would be wrong.
Have you seen Apple’s most recent 10-Q? If you haven’t, and you are truly interested in understanding why the investment community places values on corporations, then I suggest you find a copy of Apple’s most recent 10-Q. The numbers are staggering. For the period ending June 26, 2010, Apples earnings per share were $3.51. A year later, that same quarter produced earnings of $7.79. That’s right, more than double. If this were a small company, that made a few hundred million dollars of revenue in the quarter, then this feat of nearly doubling its earnings in one year would not be such a big deal. However, we’re talking about doubling earnings during a three-month period from $15,700,000,000 to $28,571,000,000 (that’s an increase year-over-year of 82%!). That is a lot of money!
Did you happen to notice that the aapl earnings per share more than doubled while the revenue grew at 82%? How does that happen? Answer: by increasing margins. It happens by being more efficient. That’s the kind of thing that analysts really like to see. And guess what, while economic growth in the US is fairly slow growth in Asia is phenomenal. While sales in the US, Europe and Japan were about 65%, sales in the Asian Pacific segment were up 247%! That’s right, 247%! As for products,the two biggest increases in product lines were the iPhone in the iPad; both with growth of about 165%.
This is the kind of financial performance that analyst dream about. This is the kind of company that options traders like me dream about. This is the kind of company that equity holders dream about. Apple continues to impress and amaze, and I suspect that we haven’t even seen the best of it. To say that I am bullish on Apple would be a gross this understatement. If this market can move past the debacle which is the debate on raising the debt ceiling, Apple should push towards $500 per share.