The report noted that Apple was currently trading at its lowest price/earnings ratio in five years. “Apple trades for only 11 times projected profit of $49 a share in its current fiscal year, ending in September 2013,” the report said. “Strip out Apple’s huge cash holding of $128 a share, and the effective P/E is just eight.”
However, even after implementing a dividend and a share-buyback program, Apple should build cash at a rate of $40 billion annually, the report estimated. That would mean that there was “room for a higher dividend and a more aggressive share-repurchase program in 2013. Both could play well with investors.”
Such a move usually leads to increased buying and growth in a stock’s price.
Other stocks on the list include Barnes & Noble (NYSE:BKS), BlackRock (NYSE:BLK), Marathon Petroleum (NYSE:MPC), Novartis (NYSE:NVS), Royal Dutch (NYSE:RDS), and Western Digital (NASDAQ:WDC). Barron’s top stock list last year yielded a 17 percent return, beating the S&P500’s s 12.6 percent growth, BGR said.
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