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3 Apple ETFs for Cyber-Monday And After

If an apple a day can keep the doctor away, owning Apple Inc. AAPL shares for the holiday season might keep market risks away as well. We have already stepped into the all-important holiday season, with Thanksgiving kicking off month-long festivities (read: Retail ETFs Sizzling on Black Friday Deals).

Black Friday and Thanksgiving online sales already surged to record highs in the United States as shoppers utilized fat discounts, signaling an upbeat start to the holiday season. U.S. retailers saw a 17.9% year-over-year increase in online sales to $7.9 billion, according to Adobe Analytics. Adobe indicated Cyber Monday is likely to log $6.6 billion in Internet sales, making “it the largest U.S. online shopping day in history.”

Against this backdrop, there are a few solid reasons to bet on the Apple stock and ETFs. Below we highlight these.

Upbeat Holiday Season Forecast

Apple recently said in a statement that thanks to rebounding iPad and Mac sales, the 10-year anniversary iPhone will drive revenues to a record high of $84 billion to $87 billion in the quarter ending late December, as per an article published on Bloomberg.

As per an article published on CNBC, Apple normally sells tens of millions of iPhones every year in the holiday season, irrespective of deals or discounts. With consumers eyeing iPhone X, Apple’s key device, this holiday season is expected to turn rosier for the company (read: 3 ETFs to Tap Upbeat Electronics Sales Forecast).

To match up to higher holiday demand for iPhone X, Apple boosted production. As per an analyst, shipments of iPhone X units from Taiwanese multinational electronics manufacturing company, Hon Hai, have jumped to 440,000 to 550,000 units per day which is considerably higher than the 50,000 to 100,000 units “being shipped per day just 1-2 months ago.”

Apple’s Value Status

Going by valuation metrics, the forward P/E of AAPL is 15.6 times versus the industry-average of 16.2 times. Apple has an EV/EBITDA of 13.2, which is above the 8.7 times industry-average. Investors should note that EV/EBITDA ratio values the ‘worth of the entire company’ and thus indicates Apple’s still-higher worth compared to its industry peers.

Return-on-equity of Apple is 36.3%, again higher than industry average of 29.7%. Plus, both return-on-assets and return-on-capital of Apple are higher than the industry measures. Estimated 3-5 year EPS growth of Apple is now 11.2% versus 8.1% of the industry measure.

The AAPL stock resides in the bottom 10% of the Zacks Industry Rank, but its Sector Rank is in the top 19%. Investors should note that the AAPL stock has a Zacks Rank #3 (Hold). It has a great Zacks Style Value Score of B at the time of writing with a Momentum Score of B.

Warren Buffett’s Favorite

Buffett is outright bullish on Apple. Berkshire first tapped Apple shares in 2016, garnered about 130.2 million shares of the tech giant as of Jun 30, 2017, and raised its stake in the iPhone maker by another 3.9 million shares in the third quarter of 2017, taking the exposure to 134 million shares. All the above-said metrics and numbers explain why Buffett is beefing up Apple shares in his portfolio (read: ETF Investing Lessons from Warren Buffett).

ETFs to Play

So, investors betting big on Apple’s likely outperformance, can play the below-mentioned ETFs with considerable exposure to Apple (see all Technology ETFs here).
iShares U.S. Technology ETF IYW – Apple has 17.33% exposure and the top position in the basket (read: Q3 Earnings Effect: 5 Hottest ETF Charts).
Select Sector SPDR Technology ETF XLK – Apple holds the top spot (15.19% weight).
Vanguard Information Technology ETF VGT – Apple has 14.1% exposure and again holds the top position.

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