There are few truly great companies, and even fewer whose shares offer significant upside for investors. We reckon Apple (US:AAPL) is one of them. The consumer electronics titan is growing quickly, launching innovative products and breaking into new territories. Yet strip out the cash from Apple's market value and its shares trade at an irresistible nine times forecast earnings for this financial year. We think that deeply undervalues the company's stellar track record, strong growth prospects and its unique ecosystem of hardware, software and services.
- Strong sales and profit growth
- New products and services
- Expanding fast in emerging markets
- Low share rating excluding cash
- Economic slowdown in China
- Falling sales of iPads
Analysts feared that economic slowdown in China and the release of the large-screen iPhone 6 and iPhone 6 Plus in September 2014 would make year-on-year growth a challenge in the final quarter of Apple's 2014-15 financial year. But revenues rose in all five of Apple's territories, reflecting record iPhone sales and all-time high sales of both Mac computers and services. Moreover, full-year sales rose by more than 70 per cent in Greater China - Taiwan, Hong Kong and mainland China - and by more than a tenth in the key 'Americas' region. That was driven by a 52 per cent rise in iPhone revenues to about $155bn (£101bn); also the higher average selling price of the latest iPhones - up more than 10 per cent to $670 - helped widen the group's gross profit margin by 1.5 percentage points to 40.1 per cent.