Apple (NASDAQ:AAPL) rose 31 percent in the last calendar year to be one of the best-performing stocks of 2012 and outperform the broad Nasdaq by almost twice the growth. Incredibly, though, by the time the euphoria of the launch of the iPhone 5 in September turned into the very real worry of fiscal cliff-related capital gains tax rise in December, the company’s bears were out in full force.
Apple fell a little under 25 percent in the last three and a half months of the year, leaving some to wonder if they should make it part of their portfolio in 2013. Investing in Apple is serious business considering its high share price, so here are five arguments that support buying the iPhone maker’s stock:
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1) Looking at Long-Term Delight
Who cares if there are a few challenges for the stock in the short term? Long term, Apple “offers a compelling combination of attractive growth, reasonable price, and significant future option value,” according to Bernstein Research analyst Toni Sacconaghi. The analyst, who has an Outperform rating on Apple shares and a $750 price target, explained that the iPhone maker was slowly turning into a high-quality consumer company that is known for its premium brand and high customer repurchase intention, juts like Nike (NYSE:NOK) or Ralph Lauren (NYSE:RL). These repeat customers will add much-needed stability to the company’s financials, the analyst added. By 2015, Sacconaghi said, Apple will have a “pristine balance sheet” and will be generating a “mind-boggling ~$50 billion a year in cash.”
If Sacconaghi is to be believed, run for Apple while you can. Read what else the analyst had to say here.