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

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As things stand now, the current federal tax rate on businesses filing as corporations runs anywhere from 15% to 35%.

If a company were to repatriate today, homeward-bound cash would essentially be subject to the top rate of 35%, because there aren't many deductions companies can take against that cash.

On his campaign trail, Donald Trump also called for a reduction in the federal tax corporations would have to pay if they brought their stashed cash home, from 35% down to a flat 10%.

If that happens, Apple would likely bring a monstrous amount of cash back home.

Oh, the things it could do with that cash - almost $200 billion, and generating more and more every day...

It could spend it on a special dividend... It could raise its regular dividend payment... It could announce another massive share buyback program... Or it could do all three.

Apple shareholders will be the beneficiaries of all that cash, one way or another.

Then there's the rate reduction. If the top federal rate gets knocked down from 35% to 15%, as Trump stumped, Apple would see a lot more cash flowing to its bottom line.

The company's effective tax rate as of 2016 was 26.1%. This shows that, after expenses, deductions, and credits, Apple's not paying the top rate anyway. Still, a reduction down to 15% would be a huge boon to the bottom line.

And where would that money go? Again, to shareholders.

Corporate tax cuts and repatriation would generate a tsunami of cash for Apple, and it could keep floating Apple's share price higher and higher.

Of course, Apple has to keep selling iPhones and other products and services.

That's where individual tax cuts would come into play.

Trump wants to cut individual tax rates and simplify the bracketing that forces taxpayers into too many different categories, which then subjects them to higher taxes.

America needs tax cuts, especially for the middle class. If they're forthcoming, they will put more free cash into consumers' hands.

Apple's stylish products are (in)famously not cheap, but more cash in consumers' hands makes its iconic products more affordable.

And naturally, more sales would drive earnings higher and be another boon to the stock.

Here's How to Buy Apple Now

Last week, Apple blew away analysts' expectations for sales, revenue, and profits in its latest quarterly filing. The stock gapped higher on the news, made new highs, and it looks like it will continue a lot higher.

Add these tax cuts to the stock's already unstoppable upward momentum. Then wait for the fall 2017 launch of the hugely anticipated, "game-changing" iPhone 8. There's nowhere for Apple to go but the moon.

I'm recommending my Capital Wave Forecast readers buy Apple at market and add more if it backs up. But I'm so excited about this stock's potential in 2017 I'm recommending everybody grab some shares.

Put another way, if investors don't buy Apple at market or lower, they risk missing the chance to build a winning position in the stock before the launch of the iPhone 8 and the Trump tax cuts.

Trump's Other Big Priority Is a Profit Catalyst, Too: Trump's repeated calls for massive hikes in infrastructure spending could gather bipartisan support in the months ahead. Naturally, infrastructure shares are heading higher, but Shah's showing his Insights & Indictments readers how to buy these heating-up stocks on the cheap. Click here to get his infrastructure investors' briefing, and you'll get his free service twice each week, as well.

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About the Author

Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.

The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.

Shah founded a second hedge fund in 1999, which he ran until 2003.

Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.

Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.

Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.

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