Apple - where style and technology meet

There has been a change in the line up for my growth stock comparison.

Out goes Oracle as I have already covered it and will buy into it this year. In comes Valeant Pharmaceuticals. I was alerted to the potential of Valeant a few days ago and so far I like what I see.

Anyway first up is Apple.

The Apple share price has increased in eight years from $10 to over $200. That is pretty spectacular but does not mean that the fun is now over.

Here are the basics:

Market Cap: $185 Billion

Dividend Yield: 0%

Cash: $40 Billion

2010 PE: 17

Predicted Growth Rate: 20% annual

So Apple is enormous, has a huge stash of cash, is growing and still has a reasonable valuation.

The Apple brand is rated as the 20th most recognised in the world and there is a large core of Apple fanatics who would never buy a Windows device as a matter of principle.

What about risks? Consumers are a fickle bunch and if someone else manages to produce something stylish and useful who is to say that they won't desert the iPod and iPhone in droves for the new fad? Some would but the fact that only Apple devices have iTunes and it is a bit of a hassle to export all your music to MP3 many (including me) would not consider that a nice option.

I have mentioned before that controlling the hardware and the software of its MacBooks and iMacs gives Apple a huge advantage over Microsoft which can only produce the software and hope that the oems make the hardware appealing.

One more thought: Apple has over $40 per share in cash. If you adjust the share price accordingly the forward PE reduces to 15.

So here are the results (out of 10 where higher is better)

Growth Potential: 7

Risk: 6

Valuation: 8

This gives Apple a score of 21 out of 30.

Next up: Intuitive Surgical