3 Apple Inc. (AAPL) ETFs For Outperformance
The technology sector has shown strength over the past few months, thanks to solid industry fundamentals that have sent many stocks to multi-year highs. Among these, a noteworthy stock is Apple Inc. (NASDAQ:AAPL) which rebounded strongly and regained its luster in recent months.
The stock once again become a darling of investors and surged to a triple-digit mark for the first time after the 7:1 stock split in June. Apple shares surged over 30% since late April and hit a fresh high $101.09 on August 20, surpassing the record of $702.10 pre split and $100.30 post split in September 2012.
Further, Apple overtook Google (GOOGL) in terms of share performance and is leading higher in the year-to-date time frame. This is especially true as Apple surged about 27.3% while the Internet search giant gained about 6.9% in the same period. Moreover, AAPL is up more than 4,680% over the past decade, being the fourth-best performing stock in the S&P 500.
Renewed optimism came from the company’s effort to perk up revenues and earnings, which had flattened in recent quarters. The expected release of new bigger-screen iPhones and a wearable gadget next month as well as an upgrade to Apple TV set-top box are increasing investors’ confidence in to the company’s future growth. According to Morgan Stanley, Apple would be able to sell as much as 60 million smartwatches in its first year of debut, adding up to $9 billion in revenues in fiscal 2015.
Additionally, the tech giant is committed to increase its payout to shareholders. The company aims to buy back $130 billion worth of shares by the end of 2015 and plans to raise dividend every year (read: Apple Stock Repurchases Puts Buyback ETF in Focus).
To make the case stronger, Apple has seen solid earnings estimate revisions for the current fiscal and the next year over the past month as about 59% of the analysts revised their estimates upward. In fact, over the past one month, the consensus estimate for the current fiscal 2014 has risen from $6.30 to $6.31 per share while the next year estimates climbed from $6.91 to $6.93 per share. This suggests that a bright future for this company.
Apple currently has a Zacks Rank #3 (Hold). The stock might signal a buying opportunity in case of any pullback. Further, the stock has a solid Zacks Industry Rank in the top 39%, indicating smooth trading in the days ahead.
ETFs to Consider
Given that the bullish trend will likely continue in the months ahead, we have highlighted three ETFs with heavy exposure to this tech giant for investors seeking to bet on the stock with a much lower risk.
iShares Dow Jones US Technology ETF (NYSEARCA:IYW)
This ETF tracks the Dow Jones US Technology Index, giving investors exposure to the broad technology space. The fund holds 141 stocks in its basket with AUM of over $4 billion while charging 43 bps in fees and expense. Volume is good as it exchanges nearly 422,000 shares in hand a day.