The Dow Jones Industrial Average is fast approaching the 13,000 milestone and investors will temporarily celebrate, taking a victory lap shouting "I told you so". That's great and the fun will last for awhile. But let's look at two strong, gotta own names in preparation for the Dow Jones at 14,000!!! It'll happen -- when I don't know, but it will. These two names exhibit the mantra that every investor should always be uttering to themselves "earnings growth, earnings growth, earnings growth."
The first one is Apple Inc. (NASDAQ: AAPL). Not a surprise as I have been recommending this company for the past two years and now, as enthusiastically as ever. The stock is trading at $90 and my price target is $140. Apple is a phenomena, plain and simple. With 100 million iPods already sold, that market is still underpenetrated.
The iPhone will be the next leg of massive growth, dominance and earnings upside. The initial projections for the iPhone are conservative and that's the way Apple wants it. Apple is managing expectations very intelligently. So what if the iPhone is delayed by say a quarter? So what, the numbers will be revised and pushed out a quarter or two. This stock is a buy and put away for a few more years.
This company "gets" the consumer like no other. The momentum in this story has legs and sustainability for the next 3 years easily. Consensus estimates are for revenues of $24 billion and earnings per share of $3.25 for 2007. Couple iPod and iPhone with other accelerants within Apple like the new and improved Mac computer, the software upgrades, CPU enterprise share gains and then top it all off with a super retail store system and 2008 estimates are for revenues of $30.7 billion and earnings per share of $3.92--very conservative and will likely be revised upwards.
The second one is aQuantive Inc. (NASDAQ: AQNT). I have been recommending AQNT since $8 and it is now $32. It is still a buy as AQNT is emerging as the leader in the internet advertising/marketing sector.The current market capitalization is $2.5 billion--with the opportunity to at least double that valuation in the next 3 years. The Global 1000 are now getting it: the internet for marketing is the powerful new medium and force. AQNT has no legacy accounts mired in old media advertising. AQNT is the go-to company. It is more than just a marketing/advertising company. AQNT has proprietary, valuable technology to help its customers through the entire process of building a web site, sub-sets of the site, and managing the entire marketing campaign soup to nuts. Its clientele is the who's who of the corporate world. The reference account is Procter and Gamble. With that alone--the rest will follow. Estimates are for 2007 revenues of $595 million and earnings of $.68 per share. 2008 estimates are for revenues of $700 million and earnings of $.90-.95 per share. Yes, aQuantive could be acquired. Its neighbor 5 miles away is Microsoft Corp. (NASDAQ: MSFT). who is woefully behind in this sector.
These are just two companies among many great ones. More to follow...
Georges Yared is the CIO of Yared Investment Research. For more growth ideas please visit the web site.
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Reader Comments (Page 1 of 1)
4-21-2007 @ 8:48AM
e capria said...
Your picks are valid but at a dow 14000 which could happen in 2008 I would add EEP and DEO. For yield and growth.