Apple Inc. (NASDAQ:AAPL)‘s sweet spot
Last year, everybody wanted a piece of Apple Inc. (NASDAQ:AAPL). Its share price soared to $700 as its portfolio of iProducts conquered the world like nothing before and profit seemed destined to rise 45% a year forever and ever. But that level of innovation is tricky to maintain, and what do you do when almost everybody owns an iPhone? One response was to check out Samsung’s product range. So is Apple Inc. (NASDAQ:AAPL) rotten to the core? Hardly. It now trades around $450, down 35% from its peak. That makes now a better time to buy than six months ago. Canaccord Genuity is keen, reiterating its buy rating with a target price of $600, reduced from $650. Sterne Agee also hails this stock a buy while slicing its target price from $715 to $630. The Apple Inc. (NASDAQ:AAPL) backlash was inevitable. I don’t expect the glory days of growth to return, with Steve Jobs gone and the tablet market looking increasingly crowded. But its sales and market share are still massive. Its customers are loyal (I’m writing this on a MacBook after years in Dell hell, and I’m not going back). Markets have had their fun and successfully lowered expectations. If the cash keeps coming in, or if Apple Inc. (NASDAQ:AAPL)’s miserly yield suddenly becomes masterly, as some anticipate, now could prove a sweet spot.
Bunzl in the oven
Everybody knows Apple Inc. (NASDAQ:AAPL). Bunzl plc (LON:BNZL) is a bit more obscure, but it has its fanboys as well. When I reviewed this specialist distribution group in mid-February, one ardent supporter posted this message: “Superb company. Exceptional track record, wonderfully diverse, in an attractive industry.” It is hard to disagree. Bunzl supplies businesses around the world with a range of not-for-retail goods, such as food packaging, catering equipment, stationery, bags, cleaning supplies, face masks, and swabs — humdrum stuff that companies plough through every day of the working week. There is nothing humdrum about Bunzl’s share price performance: It’s up 27% in the past three months alone. That’s hardly surprising, given a better-than-expected 5.8% rise in pre-tax profit to 324 million pounds in 2012. Bunzl has been on the acquisition trail, which can be risky, but its 13 new purchases have added 500 million pounds’ worth of annual revenue. Management was happy to hike the dividend by 7%, although, yielding 2.2% and covered 2.9 times, the payout leaves something to be desired for loyal investors. This is yet another stock that now looks toppy at 18 times earnings. Bunzl clearly has plenty of fans out there. For that, you get steady forecast EPS growth of 7% this year and 6% next. But maybe we could all do with a little market correction right now.
The article Should I Buy These 5 Shares? originally appeared on Fool.com.
Harvey Jones has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.
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