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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Apple Inc.    AAPL

APPLE INC.

(AAPL)
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Bill Gross predicts value outperforms growth, based on rates correlation

07/14/2020 | 06:07am EST
FILE PHOTO: Billionaire investor Bill Gross listens during the Milken Institute Global Conference in Beverly Hills

Billionaire investor Bill Gross is predicting that value stocks like IBM and Altria Group are likely to fare better than growth stocks like Apple or Amazon.com in the near term, due to a correlation with real interest rates.

Billionaire investor Bill Gross is predicting that value stocks like IBM and Altria Group are likely to fare better than growth stocks like Apple or Amazon.com in the near term, due to a correlation with real interest rates.

U.S. real yields - which adjust for inflation - have been declining in response to the Federal Reserve's aggressive monetary actions over the past few months to limit the economic fallout of the coronavirus pandemic. The yield on the 10-year Treasury Inflation-Protected Security (TIPS) <US10YTIP=RR> has been trading with a negative yield since late March and is now minus 0.803%, near an all-time-low.

Gross, who co-founded Pacific Investment Management Company, then spent four years at Janus Henderson before leaving in 2019 to manage his own money, said that the reason that the "Fab 5 stocks" and growth stocks in general had done "so fabulously well" centers on falling real interest rates that "are still reaching historic lows." Gross is referring to a clutch of high-performing stocks: Amazon, Facebook, Apple, Netflix and Google's parent Alphabet, according to his spokesperson.

The yields of TIPS are highly correlated with growth stocks, but have far less of an effect on the prices of traditional value stocks, he wrote.

The future price disparity of Microsoft, Apple and Amazon "is subject to an ongoing decline in real rates, which to my mind, have seen their best days," Gross said. "Value stocks, versus growth stocks, should be an investor's preference in the near-term future," he writes.

Gross said that as well as IBM and Altria, he likes stocks such as midstream company Enterprise Products Partners and pharmaceutical giant AbbVie.

"Happiness is a healthy body, sinking a few 10-foot putts, and investing in value, versus the 'Fab 5'," wrote Gross, who also said he was COVID-19 free.

(Reporting by Kate Duguid; Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Megan Davies and Christopher Cushing)

By Kate Duguid

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ABBVIE INC. 0.78% 104.98 Delayed Quote.17.69%
ALPHABET INC. 0.70% 1775.78 Delayed Quote.31.71%
ALTRIA GROUP, INC. -0.07% 40.36 Delayed Quote.-19.09%
AMAZON.COM, INC. 0.50% 3200.1586 Delayed Quote.72.37%
APPLE INC. 0.85% 116.97 Delayed Quote.58.05%
ENTERPRISE PRODUCTS PARTNERS L.P. -0.29% 20.27 Delayed Quote.-27.70%
FACEBOOK INC 0.15% 275.475 Delayed Quote.34.27%
JANUS HENDERSON GROUP PLC 0.34% 29.36 Delayed Quote.19.67%
MICROSOFT CORPORATION 0.25% 214.37 Delayed Quote.35.62%
NETFLIX, INC. -0.22% 483.515 Delayed Quote.49.89%
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Financials (USD)
Sales 2021 315 B - -
Net income 2021 66 095 M - -
Net cash 2021 80 862 M - -
P/E ratio 2021 29,4x
Yield 2021 0,73%
Capitalization 1 973 B 1 973 B -
EV / Sales 2021 6,01x
EV / Sales 2022 5,66x
Nbr of Employees 147 000
Free-Float 99,9%
Chart APPLE INC.
Duration : Period :
Apple Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends APPLE INC.
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 43
Average target price 126,66 $
Last Close Price 116,03 $
Spread / Highest target 29,3%
Spread / Average Target 9,16%
Spread / Lowest Target -35,4%
EPS Revisions
Managers
NameTitle
Timothy Donald Cook Chief Executive Officer & Director
Arthur D. Levinson Chairman
Jeffrey E. Williams Chief Operating Officer
Luca Maestri Chief Financial Officer & Senior Vice President
Kevin M. Lynch Vice President-Technology
Sector and Competitors
1st jan.Capitalization (M$)
APPLE INC.58.05%1 972 719
SAMSUNG ELECTRONICS CO., LTD.21.86%412 799
XIAOMI CORPORATION146.75%82 757
WINGTECH TECHNOLOGY CO.,LTD9.69%19 210
FITBIT, INC.9.44%1 959
MERRY ELECTRONICS CO., LTD.-16.72%1 024