Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing Access Your Profit Alerts

This Is Already the Best Value Stock on the Market – and Just Wait Until Trump Cuts Taxes

I'm getting ready for a monster rally.

As we all know, Trump campaigned on steep tax cuts for individuals and corporations. If he can pass either or both through Congress in his first 100 days, and there's no reason to believe he can't, expect the markets to go stratospheric.

There's more to it than that – the corporate tax cuts are more than just reducing corporations' federal tax liability.

"Repatriation" of U.S. corporations' offshore stash is going to be a huge driver of the next leg up I see coming. The Fortune 500 companies alone have $2.4 trillion parked overseas.

One company in particular has the biggest cash hoard of them all.

I'm going to show you 246 billion reasons to buy it right now. It's the perfect time. This stock will unquestionably lead the surge higher I'm expecting in the next three months.

This Company Is Going to the Moon

Apple Inc. (Nasdaq: AAPL) keeps defying gravity. And, as you'll see, things could still get a lot better.

Its most recent earnings story was just extraordinary. It beat expected iPhone sales, selling more than 78 million units. It beat services sales and revenue, which rose more than 17% and generated more than $7.2 billion, a record in service revenue. It posted revenue records on sales of Macs and Apple Watches. It handily beat expected quarterly revenue, which came in at a record $78.4 billion.

value stockRecords are just being blown away left and right.

And, believe it or not (and you'd better believe it), the stock is still cheap.

Apple now sports a market cap of $675 billion, but it trades at less than 16 times earnings.

That's way below the S&P 500's PE ratio above 22, or 26 on a forward basis.

Incredibly, it gets even cheaper when you factor out the company's legendary $246 billion cash and equivalents pile.

Subtract $246 billion from the company's market cap of $675 billion, and, on that basis, you get a market cap against earnings of $429 billion.

That's a PE of 9. That's right: N-I-N-E.

What other company trades at a PE of 9? Try Bed Bath and Beyond Inc. (Nasdaq: BBBY). No, I'm not kidding.

Apple is absolutely a value stock, one of the market's most compelling buys right now.

But it's got even more upside in store.

Tax Cuts Will Make a Good Thing Even Better

Join the conversation. Click here to jump to comments…

About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

Read full bio

  1. Roy F. "Fritz" Schoonover | February 7, 2017

    Regret that I see at least three problems with your analysis. (1) Trump's tax reform schedule has been pushed back, probably won't take effect until 2018 earliest. (2) As currently laid out the "tax cut" for the middle class is pretty much an illusion; a few hundred bucks at most – the fat cats get the big cuts. (3) and all that's before the deficit hawks, etc. in Congress get their knives into it.

  2. Bob Petty | February 7, 2017

    As good as Apple has been, it appears the company is a has been when compared to companies such as Alphabet and Facebook. The best we stockholders can expect in my opinion over the next year is that the Iphone 8 is a huge success and pushes up the stock value to a new all time high at which point it might be time to say thank you for a wonderful ride and to invest into a more creative company that is blazing a trail to stardom and to huge returns.

  3. Bill Patalon | February 7, 2017

    Here's why folks should listen to what Shah is saying here.

    And I'm saying this … since I know he's too modest to blow his own horn on these two terrific "calls."

    Back in July 2013, during a formal interview seeking Shah's best picks for the year's second half, Shah told my Private Briefing subscribers to buy both Apple Inc. (Nasdaq: AAPL) and Microsoft Corp. (Nasdaq: MSFT).

    As Shah explained it, he was issuing a "one-two play" of high-yielding, cash-rich turnaround candidates.

    He basically "called" the market bottom in Apple – since this was before activist Carl Icahn scooped up the shares and before King Carl launched his "Twitter campaign," which helped ignite the slumbering iDevice king.

    From a split-adjusted price of $60.10 a share, Apple zoomed to an all-time high near $133, for a peak gain of 121%. When you add in the $6.31 a share in dividends folks who acted on this rec collected, that peak gain goes to 132%.

    Even now, slightly down from its peak, the total return on Apple is well over 100%.

    Microsoft – the other half of this "one-two recommendation" – was just as timely a call.

    A week after Shah detailed this to me, MSFT announced a sweeping restructuring – followed not too long after by the retirement of longtime CEO Steve Ballmer. Successor Satya Nadella has supercharged Microsoft, whose shares have zoomed from $34.70 all the way to $63. Add in the $4.42 a share in dividends, and the total return ($67.42) surges to 94% – pretty doggone good for a "washed-up" company, as many investors viewed "Mr. Softy" when Shah shared his "Buy" call.

    Better still: Each time Microsoft has sold off, he's re-recommended the stock – and then watched as it soared.

    Kudos, Shah, on two tremendous "calls."

    Respectfully …

    William Patalon III
    Executive Editor/Editorial Director
    Money Map Press/Private Briefing

Leave a Reply

Your email address will not be published. Required fields are marked *

Some HTML is OK