3 Stocks to Buy Instead of Apple

Brittney Barrett  |

Tech darling, Apple (AAPL) has been making minor gains in trading this week on optimism regarding the sale of their hand-sets, but the company lagged in their second quarteras investors flung themselves toward the latest tech IPOs like LinkedIn (LNKD), the newly filed Zynga and soon-to-be filed Facebook as well as other older, more moderately priced companies. Investors and analysts have been especially hard on Apple amid the burgeoning tech bubble and in recent months after the company began retreating from its 52-week-highs. Though the iPhone has been the highest seller of the year and the newest version of it has just been announced, some analysts feel that these developments have already been adjusted for in the current pricing of Apple’s shares. It’s by this logic perhaps, that Apple has been looking less attractive in recent months.

Google (GOOG), has thrown a wrench in current expectations with the introduction of Google+, the internet conglomerate’s current competition to facebook. Just as facebook overtook myspace by offering exclusivity first, Google is seeking to do the same with its new network which is available by invitation.

That said, Google and a number of other stocks appear to be looking more appealing than Apple in the current market.

Among the old guard, IBM (IBM) looks like a buy right now, receiving net upgrades from the top performers three times this year. Shares have been climbing sharply since June as the company was lauded for its longevity. The company is sitting on over $10 billion in cash and produces significantly impressive dividends. The average annual return on IBM stock for the past five years has been 17.4 percent.  At around $175, IBM is nowhere near Apple’s share price though some might still deem the price tag high. That said IBM has a forward P/E ratio of 12 and has exceeded expectations for the last four quarters. Curren annual revenue for the company, around $100 billion isn’t a huge departure from recent sales totals; however, the 100-year-old company’s earnings per share have soared from $7.18 in fiscal 2007 to $11.52 in fiscal 2010. IBM projects $13.25 this year, indicating there is still considerable profit growth to be had.

As mentioned earlier, in terms of expensive stocks, Google has benefited from a series of upgrades and continues to expand itself. Like Apple, it is highly successful in mobile technology, with recent data suggesting its Android platform being the most popular among all other options as of May. Additionally, Google continues to challenge itself by unleashing new and bold products. A recent FTC investigation pushed down shares over $50, but the stock bounced by, proving its resiliency and the opportunities that present themselves to buy on a dip.

Cisco (CSCO) appeared to be out of prospects in the pipeline and the company shot down sadly, but recent development have made Cisco appealing again. Yesterday, the company, which is trading near 52-week lows, announced that is would be one of several  Western technology outfits that would participate with China on a massive, new surveillance project that requires half-a-million cameras. Cisco is thought to be producing wiring, and there would be quite a bit of it. Additionally, should the project be successful, the somewhat terrifying plan could begin to spread in cities outside the intended city of Chongqing, further bolstering shares of Cisco. The company has received upgrades.



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