Apple Inc. (NASDAQ:AAPL) price has been in a defined downtrend for the last 6 months despite the company’s strong fundamentals. However, critics point to the company’s future as the main reason for its poor showing at NASDAQ stock exchange.

The iPhone maker has often been compared to the case of  Microsoft Corporation (NASDAQ:MSFT) about 10 years ago, when the windows maker slipped shortly after becoming the world’s most valuable company. The biggest question that remains is whether Apple Inc. (NASDAQ:AAPL) is running out of gas at a crucial time when rivals are attacking for all directions.

The company has been a constant customer in courts, either accusing a rival or being accused of patent infringements among others. Some of the proceedings have ended in its favor while others have been adverse. Secondly Apple newly launched devices have not been an absolute success, at least not without a few hiccups.

The company has faced supply constraints, and it has also failed to deliver on some of the device features according to promise. Furthermore, Google Inc (NASDAQ:GOOG) has proved a cumbersome opponent with its continuous encroachment into Apple’s lines of business including the tablets, iPhones, and mobile Apps.

Nonetheless, Apple Inc. (NASDAQ:AAPL)’s fundamentals have remained among the best in its industry. The company holds about $137 billion in cash (enough to Buy Hungary for one year, whose GDP is estimated at about that figure). While the gross margins remain a challenge, Apple’s current market price is indicative of a massive undervaluation.

The company also reported improved profits of about $41 per share in the most recent quarter and analysts predict an EPS of about $44 within 12 months.

SADIF has even a higher projection in terms of earnings for the Silicon Valley Company. In a note published March 6, after the market close,  SADIF analysts expressed their optimism in the company’s fundamentals with a projected $73.31 in earnings per share within the next 12 months.

The analysts also put a price target of $986.41. The analysts backed their views with data obtained for StockMarks , with assessments made on various valuation metrics in comparison with industry peers.

AAPL total Quality StockMark Index

 

It is quite clear that Apple’s Total Quality Stock Mark has not dropped since 2009. On the contrary, the company’s stock has dipped and recovered on numerous occasions during the period. However, the most recent plunge highlights all the slips Apple Inc. (NASDAQ:AAPL) has suffered since 2009, as it struggle to kick-back to glory days. Nonetheless, the fact that the company’s quality remains untainted  is an indication that its fundamentals remain strong.

 

AAPL Trend in selected stockmarks

 

The price StockMark SMP has been the most volatile of Apple’s key StockMarks. According to statistics recorded as of January 17, 2013. The company’s price SMP remained well below the 40th percentile while the other StockMarks, that is Business StockMark (SMB) and Management StockMark (SMM) floated just above the 80 percentile, thereby propelling the Total Quality StockMark (SMT) to about 80. The two key StockMarks have also been very stable since 2009, oscillating within the 80 percentile.

AAPL SMT Sector Comparison

 

Apple Inc. (NASDAQ:AAPL) has outperformed the technology industry since 2009 in terms of SMT. The company as noticed has remained within touching distance of the 80 percentile while the overall technology industry oscillated within the 50th percentile mark.

The trend for Business StockMark determinants

 

The analysts also took a look at the determinants of the company’s Business StockMark performance. According to the data, revenue growth rate has the highest correlation coefficient.

Its Average operating margin and sales elasticity have had less impact on Apple’s Business StockMark performance, which is one of the company’s main Total Quality StockMark determinants.

Bottom Line 

The SMT rating summarizes the total quality of the company from the point of view of value investors. It captures Warren Buffett’s definition of a good investment as: a good business, run by honest and competent management and bought at a fair price. Based on SADIF’s findings, it is quite clear that Apple Inc. (NASDAQ:AAPL) is one of the bets value companies in the technology industry. It is the gift that keeps on giving!

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