Twice a year, Barron's does its "Smart Money" poll of institutional investors. This fall's edition includes opinions from 112 money managers. The poll was e-mailed to these participants in late September.
These investors believe that the market is still headed higher. Forty-two percent were bullish compared to 18% who called themselves bearish.
But the strange thing about the poll is that some of the most mentioned "buys" were also among the most mentioned "sells," which shows how deep the spread of opinion is on these companies.
Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) made both lists. The first list was called "Two Favorite Stocks," and the other was called "Most Overvalued."
For any money manager worried about valuations compared to the market as a whole, the two stocks do appear expensive. Apple is up 120% this year, and Google is up almost 60%. The Nasdaq is up less than 20%. Google also now has a market cap of $222 billion, which makes it the 5th most valuable company in America. It trades for almost 15 times revenue.
The case for the stocks still being worthy of accumulation is fairly simple. Both still have wild growth prospects. At Apple, sales of the iPod are not slowing, and Mac sales are picking up. The adoption of the new iPhone is probably greater than most people expected and the handset business does have global sales of over one billion units a year.
Over at Google, the company has 50% to 60% of the search market depending on which survey is being used for the data. And, the market assumes that products like Google Apps and the new Google phone could take the company's revenue beyond PC-based search.
Part of why people are dazzled by Wall Street is that no one knows what will happen to any given market or stock. The Barron's poll confirms that yet again.
Douglas A. McIntyre is an editor at 247wallst.com
Happy holidays! Google giving away free Wi-Fi 
Dr. Doom Nouriel Roubini believes the bubble is about to burst
Cramer on BloggingStocks: Investors are rethinking their snap judgments 
Reader Comments (Page 1 of 1)
11-05-2007 @ 11:06AM
Ken Meeker said...
Does anyone believe Apple will split in the near future?