How Apple Will Continue Its Profitable Cook-Era Run

On Wednesday, I told you about my friend Pete, who passed on recommending Apple Inc. (NASDAQ: AAPL) to his Wall Street clients decades ago.

This was back in 1997, around the time the late Steve Jobs returned to run the Silicon Valley legend. Since then, the stock has gone from a split-adjusted $0.78 a share to $312, where it trades today. That kind of gain could turn $10,000 into more than $3.8 million.

Today, I have another anecdote to share with you. This one involves a friend I'll call "Steve."

In the summer of 2012, Steve told me over lunch he had recently sold all his Apple stock. He said he did so because he felt the new CEO, Tim Cook, would never match the innovation that occurred under Jobs.

Unfortunately, both of my friends missed the boat on Apple - and left a lot of money on the table.

I know Steve wasn't alone in thinking the Apple magic was over. It's smart to consider what could happen when a company gets a new leader - especially when the one being replaced was widely regarded as a "visionary genius," and when the stock had been so good to shareholders. Investors and media both questioned what Apple would become under Cook.

And now we know...

Apple has continued its historic run, rising as much as 395.6% in a little more than eight years. And it keeps reaching new levels, hitting its most recent closing high just last week.

If you've been able to make money on AAPL, great - there's more to come. And if you haven't yet bought in, it's not too late. Here's why the Cook-era profitability is far from over...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

On Solid Footing

Now to a certain extent, I can understand my friend Steve's reservations about Cook.

Wall Street and Big Media were discounting the new CEO as someone who would never keep pace with Jobs' steady output of breakthrough devices.

I told him it was an unfair comparison. Jobs was a pioneering product genius the likes of which we are not likely to see for many years to come.

But I added that the company was in good hands under Cook. I believed the stock would continue to rally.

Mind you, this was not an idle conversation. As you have probably noticed about me over the past six years, I am one of the biggest Apple bulls around.

I never bought into the anti-Cook bias that was so popular back then. Not only that, but I made two bold predictions that were widely doubted at the time.

First, I was one of the earliest analysts to say that Apple would hit a pre-split price of $1,000 a share. That was back in October 2013.

I also made that call as a guest on Fox Business Network's "Varney & Co." I thought host Stuart Varney was going to jump out of his chair when I made that forecast on live TV.

The stock reached my target price on March 28, 2017, on a split-adjusted basis when it hit $142.85. Then it reached its closing high of $270 a share on Dec. 6.

And that brings me around to another bold call I made about "Cook-era Apple." In April 2015, I said it would go on to have a market cap of a cool $1 trillion. It did so in August of last year.

I'm bringing all this up not to boast, but to serve a larger point - about Apple, about tech profits, about how you can keep making the most money the market has to offer...

Committed to Keeping Up

Apple is one of the reasons why I say the road to wealth is paved with tech.

It's the only sector in the world today where investors can buy just a handful of stocks - and in some cases, only one - and become a millionaire.

One of the things I really like about Apple today is that it has reinvented itself once again.

Knowing the company couldn't rely on iPhone sales indefinitely into the future, Cook has shifted the firm's focus.

Apple has become much more of a services company. With this approach, Apple bills monthly recurring fees for services like streaming music and movies along with cloud computing.

The result is a tidal wave of cash. Apple brings in nearly $43 billion in free cash flow a year.

And Cook has been sending a lot of that money back to shareholders.

Since 2012, Apple has bought back more than $234 billion of its own stock. It boasts a return on stockholder's equity of 56% and pays a dividend of roughly 1.2%.

Now you know why I still see plenty of upside ahead. Over the past three years, Apple has grown per-share earnings at 16%. I believe it can maintain that pace for years to come.

Remember, stock prices tend to track earnings growth. That means Apple could double again in roughly 4.5 years.

At that point, the original $10,000 we've been talking about will be worth around $7 million.

Like I keep saying... if you want to become a stock-market millionaire, you have to be in tech.

And sometimes, the world of outstanding tech wealth can extend even beyond stocks. Tech can be so disruptive that it can even create entirely new asset classes that can achieve record-breaking profits.

I'm talking about revolutionary new investments like Bitcoin, which has historically turned some broke college students into multimillionaires.

And let me tell you, Bitcoin is not done yet. I believe it is just now entering into a second wave of rising value that will create another wave of millionaires, even billionaires.

I've created a special presentation to tell you all about this cutting-edge financial opportunity. All you have to do is click here to get started.

And in the meantime, I hope you check back with me regularly on Strategic Tech Investor as I share the tips, tactics, and strategies that can really transform your net worth. And if you're not a Member yet, just click here, and you'll automatically be signed up to get my Strategic Tech Investor research delivered to your inbox, absolutely free.

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About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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