After Wednesday’s wild ride, Apple’s stock price was down even lower yesterday – trading around $530 (it’s still in that range this morning). That price prompted Andy Zaky of Bullish Cross to issue a rare buy rating for the Apple’s stock.
This is only the fifth time that Zaky has publishing a buy rating for Apple. The last time was nearly a year ago on June 20 when Apple bottomed at $310.50 a share ahead of a strong July rally that in which it grew by 30%.
Zaky was one of the first independent Apple analysts and his estimates for Apple’s quarterly financial results has been more on target than many professional analysts on Wall Street. Through online articles and advice, Zaky has become a popular figure among Internet-oriented day traders.
In issuing Thursday’s note, Zaky noted that such ratings are extremely rare.
Today, we are initiating our 5th ever buy rating on Apple just about 11-months after the last recommendation we gave. We tend to only publish these buy rating under extraordinary circumstances, when Apple has been extremely oversold and when the stock’s valuation has become incredibly depressed. We also only publish these ratings once the markets have seen a substantial sell-off or prolonged period of consolidation.
Zakky expects Apple’s share price to rise as high as $750 by the end of January 2013. That would be an increase of about 50% over this week’s pricing. He backs up that statement as follows.
Now here are the reasons why we believe its time to buy Apple and why we feel the valuation is incredibly attractive today. At $533.52 a share, Apple trades at 13x last year’s earnings and at only 10.56x our expected October earnings. Those are incredibly low valuations even for Apple. At the November 25, 2011 lows, Apple traded at a 13.13 P/E ratio. So today, Apple is trading at a lower valuation than it was at the November lows. At the June 2011 lows, Apple was trading near a 15 P/E trailing P/E ratio.
Those who have been waiting for a correction in Apple to buy the stock, now have that opportunity to do so. On a technical basis, Apple is the second most oversold it has been since the lows of the financial crisis. Only on June 20, 2011 — when Apple bottomed at $310.50 a share ahead of a 30% July rally — did we see more oversold conditions on Apple. Even the flash crash didn’t result in more oversold conditions nor did any period during the 2010 summer correction. At no time during the summer 2011 correction did Apple see more oversold conditions.
You read more details about the note on the Bullish Cross website.
Source: Bullish Cross