Apple Inc. Stock Your Choice

Apple Inc. stock

Your choice of stock to recommend: Buying or short selling

Short selling is defined as betting against a stock's upwardly mobile performance. In the case of Apple, I would recommend buying the stock. As noted in Fortune magazine: "Apple's (AAPL, Fortune 500) stock has soared 428% in the past five years as profits have risen at an astounding 59% annual rate. That growth makes Apple the planet's third-most-valuable company by market capitalization, trailing only Exxon Mobil" (Cendrowski 2011).

Reasoning from macroeconomic perspective. Why your stock stands out under current economic situation.

Technology is an integral part of modern life. Although the economy may still be shaky in some areas, almost everyone must remain connected to the Internet because of work-related or personal needs. Technology quickly becomes obsolete, so there is always a demand for the purchase of products such as computers, phones, music players, and other devices. Apple manufactures all of these items.

Even more critically, Apple is a multinational company. Even when the U.S. market is supersaturated, it can further expand its empire into China and other areas of the developing world. Such areas are rapidly growing in terms of their wealth and population.

Part II. Reasoning from industry perspective. Why your stock stands out in its industry, beating its competitors.

Apple's popularity as a brand, not simply in terms of the technology it creates, but also its image, suggests there will be a sustained interest in the product. Apple consumers want to buy Apple's 'next new thing' because it is made by Apple. People purchased the new iPad even before they were certain as to how the product would enrich their lives. Apple's image is just as potent a selling point as are its products.

Part III. Reasoning from the company itself. What is going on with the company that makes you recommend this stock, this should include things like products, markets, management, etc.

Apple's 2011 profits "are predicted to climb another $3 billion, or 22%, to $16.5 billion. The iPhone is still on fire. And the new iPad sold a whopping 3.3 million units in its first quarter on the market" (Cendrowski, 2010). While it is true that Apple is hardly an overlooked 'gem' and is a fairly mature state as a company, it is also true that it has many new 'hot' products. Apple continues to innovate, most notably with its recently-announced 'iCloud' service (Hughes 2011).

Part IV. Why you would recommend this stock at the price level? (Why it is undervalued for buying recommendation/overvalued for short selling recommendation?)