Tech titan

Slowing smartphone adoption across the globe has seen investor appetite for device titans like Apple trend lower recently.

But Cambridge microchip maker ARM Holdings (LSE: ARM) has proved immune to these pressures. Indeed, shares in the stock have surged to their highest since last December amid frantic, post-Brexit safe-haven buying.

Sure, falling phone demand remains a worry for ARM, the segment being a major revenues driver for the business. But the growing popularity of the firm’s technologies in other fast-growing sectors gives stock pickers confidence that earnings can keep shooting higher.

The City expects earnings at ARM to surge 44% in the current fiscal year alone. And I reckon a subsequent P/E rating of 27.8 times — while heady on paper — is fully justified given the company’s exceptional growth prospects.

Cook up a fortune

Takeaways have always been part and parcel of British culture irrespective of the broader economic climate. And I believe Just Eat (LSE: JE) should continue delivering hefty returns regardless of what problems a British exit from the EU vote may bring.

Only last month Just Eat, which acts as the online middleman between hungry customers and eateries, hiked its revenues and profits forecasts as orders continued to explode.

And the company’s global expansion scheme should take the heat out of any moderation in UK economic growth — Just Eat also expanded in Italy, Brazil and Mexico in recent months.

A prospective P/E rating of 40.9 times may be a tad heady for some investors, created by an expected 58% earnings surge. But I reckon Just Eat’s terrific momentum deserves a premium rating.

A mighty pick

I believe the diversified nature of Mitie Group’s (LSE: MTO) operations make it a great bet for those seeking reliable growth in uncertain times.

From supplying administrative staff to checking fire alarms and providing catering solutions, Mitie deals in an array of essential services to keep companies across the globe up and running across a variety of industries.

This has enabled Mitie’s earnings to keep on rising, and a further 1% rise is pencilled-in for the current period. And a consequent P/E rating of 10.4 times represents unmissable value, in my opinion.

Toast tasty returns

I reckon Diageo (LSE: DGE) also has what it takes to shake off the fallout of the leave vote through its extensive geographical footprint. The company’s operations are spread across the robust North American marketplace as well as hot growth regions of South America and Asia.

On top of this, investors can take heart from the unrivalled popularity of labels such as Johnnie Walker whisky and Captain Morgan rum. The formidable brand power of such products allows Diageo to lift prices regardless of the broader economic climate without fear of sagging demand.

And Diageo is ploughing vast sums into the marketing and development of these brands to keep sales ticking higher.

The City expects Diageo to punch an 8% earnings advance for the year beginning July 2017. And I reckon a subsequent P/E rating of 18.6 times is splendid value for a stock of Diageo’s calibre.

The post 4 stocks for frightened investors! ARM Holdings plc, Just Eat plc, Mitie Group plc and Diageo plc appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings and Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Manufacturing marvel

Despite current top-line troubles, I am convinced engineering giant GKN (LSE: GKN) is a splendid stocks for those seeking terrific earnings expansion in the years ahead.

The company saw revenues clock in at £2.18bn during January-March, up just 1% on an organic basis. Challenging agricultural markets caused sales at its GKN Land Systems division to slump 6% during the quarter, while organic revenues at GKN Aerospace were flat year-on-year.

Still, the resilience of the Redditch firm’s GKN Driveline arm gives plenty of reasons to be optimistic, in my opinion. Organic sales growth of 4% here outstripped global car production growth of 1%, GKN benefitting from higher vehicle loadings and ongoing strength in the ‘premium’ car segment.

And I expect revenues to roar higher once current softness in car and civil aeroplane demand abates.

The City expects GKN to bounce from a 2% earnings decline in 2016 with an 8% rise next year. And I reckon consequent P/E ratings of 9.8 times and 9 times are too good to pass up on.

Housing hero

Fears over the impact of a possible ‘Brexit’ on house prices has weighed on the likes of Barratt Developments (LSE: BDEV) in recent weeks. Chancellor George Osborne fed the flames late last month by cautioning that home values could tank by as much as 18% should Britain opt out of the European Union.

These comments did little to assuage investor confidence already whacked by rising levies and tighter lending restrictions on buy-to-let investors and those owning second homes.

While the result of the referendum could indeed cause problems for Britain’s homes market, I believe Barratt and its fellow housebuilders should still enjoy strong returns in the years ahead as the UK’s housing shortage is unlikely to disappear any time soon.

This view is shared by the City, and Barratt is expected to print earnings growth of 19% and 10% in the years to June 2016 and 2017 respectively. And these projections produce very-attractive P/E ratios of 10.1 times and 9.2 times.

Take a bite

Tech titan Apple (NASDAQ: AAPL) may not be the flavour of the month as concerns circulate over tanking iPhone and iPad sales. Indeed, shares dipped below the $100 marker in May following more disappointing sales data — Apple saw shipments of its smartphones and tablet PCs slip 16% and 19% respectively during January-March.

However, there is plenty for investors to remain optimistic about, in my opinion. Revenues at Apple’s Services division continue to take off, and these surged 20% year-on-year during the quarter. And initial sales of the firm’s Watch have been encouraging.

Of course Apple’s fortunes remain dependent upon the performance of the iPhone. But I believe the launch of the seventh generation of the handset in the coming months will spark a top-line recovery, particularly if talk of revolutionary changes like an all-glass design come to pass.

The number crunchers expect the Cupertino-based business to bounce from a 10% earnings dip for the period to September 2016, with a 9% advance in the following 12-month period. And I reckon consequent P/E ratings of 11.9 times and 11 times represent stunning value for a stock of Apple’s proven quality.

The post Buckle up! Why earnings at Apple Inc., GKN plc and Barratt Developments plc look set to explode appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK owns shares of GKN and has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Clothing colossus

Fashion house Burberry Group (LSE: BRBY) has seen its share price slump to multi-month lows after warning on profits for the current period.

The clothing emporium said recently that it expects pre-tax profit in 2017 “to be around the bottom of the range of analysts’ expectations” around £405m, a forecast that reflects Burberry’s “continued expectation that the demand environment remains challenging and that underlying cost inflation pressures persist.”

Burberry saw comparable sales slump 2% between October and March, caused by a 5% decline in demand  during the last quarter. While the company saw sales droop in Europe and the Americas, Burberry’s dependence upon Asia Pacific is proving to be the main headache.

Demand in this region fell by mid-single digit percentages during the six months, the London designer advised, with sales in Hong Kong collapsing by more than a fifth for the third quarter on the bounce in January-March.

Still, the firm’s latest release illustrates the excitement that its new product lines can generate — Burberry said that its new season runway rucksack had “performed well,” while strong demand for its scarves, ponchos and Banner bag sales underline the brand’s enduring strength.

And while macroeconomic choppiness may dent group sales for a little while longer, I expect Burberry’s togs — supported by store expansions and digital service improvements — to surge higher in the coming years as wealth levels in its growth regions explode.

A technological titan

Gadgets goliath Apple (NASDAQ: AAPL.US) was broadly expected to shock the market with its latest sales update on Tuesday. And while the numbers were not as bad as many had feared, this did not prevent the share price collapsing 7% on the day.

Apple advised that quarterly sales dipped 13% during January-March, to $50.6bn, the first top-line decline since 2003. This came in at the lower end of Apple’s previous guidance of between $50bn and $53bn, and of particular concern was the massive demand decline for the iPhone. Sales of the smartphone toppled to 51.2m units in the first quarter, down from 61.2m a year earlier.

There is no doubt Apple is suffering as market saturation dents smartphone demand, a phenomenon that is also affecting the tablet PC segment — total iPad shipments slipped to 10.3m devices in the second quarter from 12.6m a year earlier.

But Apple’s latest update was not all bad. The Watch has already proved a huge success in its first year, with the wrist device performing better than the iPhone had during its own first year of existence. Meanwhile, strong app and music demand pushed turnover at the firm’s Services division 20% higher between January and March.

And I believe Apple has what it takes to get its traditional sales drivers firing again. The Cupertino business has long set the standard in terms of creating fashionable, cutting-edge tech. And KGI analyst Ming-Chi Kuo set the rumour mill rolling last week by announcing Apple will reboot iPhone sales with the launch of a curved, all-glass version in 2017.

The post Why I’m expecting a roaring comeback for Apple Inc. & Burberry Group plc! appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The International Data Corporation (IDC) expects device demand growth to cool to just 5.7% in 2016, to 1.5bn phones. This would mark a huge departure from the 10.4% advance punched in 2015, and worryingly IDC expects sales to rise by single-digit percentages through to the end of decade, culminating in 1.9bn unit sales in 2020.

The body notes that sales in the US, China and Western Europe only rose by single digits last year, prompting IDC analyst Ryan Reith to comment that

“the mature market slowdown has some grave consequences for Apple … as these were the markets that absorbed the majority of the premium handsets that shipped over the past five years“.

On the pulse

The pressure is clearly increasing on Apple to keep revenues ticking higher.

The business saw iPhone sales grow just 0.4% during October-December, prompting Apple to warn that handset sales will dip for the first time in the current year. And falling iPad shipments provide a further headache — these dropped 25% in the last quarter.

But products like its iPhone 6 Plus ‘phablet’ are providing Apple’s sales outlook with a welcome shot in the arm. Indeed, IDC expects these larger gadgets to account for around a third of all smartphone sales by 2020, up from around 20% at present.

Other sage moves include last year’s rollout of the Apple Watch, a device that is making huge waves in the fast-growing smartwatch segment. Researcher Strategy Analytics announced that global  smartwatch demand rocketed 316% in October-December, to 8.1m units, with Apple’s product accounting for almost two-thirds of all sales.

Diversified dynamo

The fortunes of British chipbuilder ARM Holdings are very much tied to those of Cupertino-based Apple. Indeed, so strong is the relationship between supplier and manufacturer that rumours have long circulated that ARM is a takeover target for the American company.

But while ARM is greatly dependent upon the smartphone and tablet PC markets to deliver top-line expansion, the business is aggressively expanding in other fast-growing segments like networking and servers to deliver long-term growth.

On top of this, ARM is also making a big impression with Chinese phone manufacturers, giving it first-class exposure to surging demand from emerging regions. And the company’s terrific record of developing industry-leading technologies also bodes well for the coming years — indeed, ARM’s ARMv8-A technology continues to grab share across multiple tech markets.

What’s the verdict?

So while it could be argued that ARM Holdings’ increasing diversification puts it in a stronger position than Apple, I believe the US giant also has what it takes to keep generating spectacular bottom-line growth.

Apple certainly has its work cut out to keep sales chugging higher — the tech colossus needs to urgently address galloping demand for ‘budget’ smartphones, for one. Still, I reckon Apple has both the know-how, not to mention top-tier brand appeal, to continue delivering great earnings growth in the years ahead.

The post Apple Inc. vs ARM Holdings plc: Which Is The Better Tech Titan? appeared first on The Twelfth Magpie.

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• Here’s how saving £3 a day could lead to an £11,925 yearly passive income

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

A financial star

With its insurance products flying off the shelves across the globe, and its extensive restructuring drive still delivering handsome returns, I believe Aviva (LSE: AV) is a terrific selection for those seeking long-term earnings expansion.

Indeed, Aviva saw new business volumes in its core UK and Ireland division leap an impressive 39% — to £415m — between October and December, while a 24% surge across its Asian units — to £115m — underlines the long-term potential of these growth markets.

The number crunchers expect Aviva to bounce from an anticipated 18% earnings decline in 2015 with a 17% advance in the current year, and further gains are predicted thereafter. As a consequence the insurer deals on an prospective P/E rating of 8.9 times, while a sub-1 PEG number of 0.5 times further highlights Aviva’s exceptional value.

A housing hero

Due to the worsening supply/demand imbalance washing across Britain’s housing sector, I believe homebuilder Taylor Wimpey (LSE: TW) is also a terrific selection for those seeking stellar earnings growth.

Data from the Land Registry released today showed that the average house price rose 2.5% in January, to £191,812, the largest month-on-month gain since 2002. And the shortage of available homes versus prospective buyers was underlined by news that house sales averaged 78,652 between August and November 2015, down from 81,656 in the corresponding 2014 period.

Against this backcloth the City expects Taylor Wimpey to enjoy a 16% earnings rise in 2016 alone, leaving the business dealing on a P/E rating of 10.8 times. And a PEG readout of 0.7 underlines the builder’s spectacular value relative to its growth outlook.

Tech titan to rise again

Investor appetite for tech giant Apple (LSE: AAPL) has nosedived more recently amid signs of slumping global demand for its products.

Apple saw sales of its critical iPhone rise just 0.4% during October-December to 75.8m units. And demand for its iPad tablet fell off a cliff in the period — quarterly sales of 16.1 million devices represented an eye-watering 25% decline from the prior year.

Still, I believe the company’s brilliant record of innovation should continue to deliver stunning long-term profits growth. Sure, global smartphone sales may be slowing from previous years. But I believe Apple’s ‘rockstar’ reputation should allow it to traverse the worst of the current cooldown, while its diversification into rapidly-rising sectors like smartwatches also provides plenty of opportunity.

The City expects Apple to endure a 1% earnings slip in the period to September 2016 thanks to current sales bumpiness. However, this number still produces a terrific P/E rating of 10.6 times — a reading around or below 10 times is widely considered bargain-basement territory.

And the number crunchers expect the Cupertino colossus to get a handle on its current travails and punch a 10% earnings rebound in fiscal 2017, driving the earnings multiple to an even-better 9.7 times. I believe this represents unmissable value for such a high-quality stock.

The post Great Growth At Pukka Prices! Apple Inc., Aviva plc & Taylor Wimpey plc appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.