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Apple Inc Valuation

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Submitted By jrhagen
Words 18332
Pages 74
Krause Fund Research Spring 2012

Technology
Recommendation: BUY
Analysts
Jeremy Gorsky jeremy-gorsky@uiowa.edu Jeremiah Hagen jeremiah-hagen@uiowa.edu Yang Jing yang-jing@uiowa.edu Linshan Li linshan-li@uiowa.edu

Apple Inc. (NSDQ: AAPL)
April 17, 2012
Current Price $609.60 Target Price $765-790

Apple Bytes Its Way To The Top
 The iPad has revolutionized the booming tablet industry and is dominating a 61% market share with a unit sales increase of 111% over the year ago quarter. A yearly increase of 334% in sales volume during FY2011 makes the iPad the most popular product in the tablet industry.  Apple shattered analysts’ expectations for Q1 of its FY2012 with 37.04 million iPhones sold representing 128% unit growth over the year ago quarter. The iPhone is penetrating emerging markets in China, Asia-Pacific, and Europe targeting global growth.  Future product innovation in the iPhone fifth generation and iPad fourth generation will capture more market share while sustaining high levels of growth. Apple’s potential for penetrating the television market will again affirm its position as the top producer in consumer electronics.  CEO Tim Cook announced dividends to be paid to shareholders beginning next quarter at a yield of 1.8% or $2.65 per share. He also announced a $10 billion buyback starting in fiscal year 2013, and continuing through 2014 and 2015; signaling an undervalued company.  On January 25, 2012, Apple topped Exxon Mobile as the largest company in the world by market capitalization; currently at $568.5 billion. Share price has consistently grown with a 48.26% increase YTD and a five year increase of 570.22%.

Company Overview
Apple Inc. was established April 1, 1976 and incorporated on January 3, 1977 in California. The company “designs, manufactures and markets mobile communications and media devices, personal computers, portable

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