Apple
Investors in Apple Inc. (NASDAQ:AAPL) have suffered a serious setback in the last year, as growth has slowed down due to increased competition from Samsung and other hardware manufacturers. Shares of the Cupertino giant have fallen by nearly 30% over the last twelve months.
But things seem to be turning around lately, the company sold 31.2 million iPhones during the last quarter, a 20% increase versus 26 million devices sold in the same quarter of 2012. This was considerably above analysts’ expectations and it shows that Apple Inc. (NASDAQ:AAPL) still has room for growth in the high-end segment of the smartphone industry.
Management has repeatedly stated that new products from the company are coming this fall and through 2014, not only new versions of existing products, but also entirely new product categories. According to recent news reports, the company may launch its new iPhone models on September 10, and there has been a lot of speculation about the possibility of a new low cost version of the iPhone. This could be a powerful move to gain competitiveness and reignite growth in emerging markets.
Apple Inc. (NASDAQ:AAPL) accelerated its buyback program in the last quarter; the company repurchased an impressive $16 billion in its own stock. This may signal that management is optimistic about the coming products and its capitalizing the opportunity to repurchase stock while it’s still temporarily cheap. At a P/E ratio near 11.5, the company could certainly deliver attractive returns if it proves that it can continue bringing innovative and successful products to the market.
Ford
Ford Motor Company (NYSE:F) has been running at full speed lately, the F-Series provides the company with undisputed leadership in a key segment of the U.S. auto industry. This has been America´s bestselling vehicle for 36 consecutive years, and it delivered a whopping increase of 22% in unit sales for the first half of 2013. The real estate recovery is generating significant tailwinds for this key segment in the middle term, and this bodes well in terms of financial performance for the company.
Ford Motor Company (NYSE:F) has also been gaining market share in other segments of the market thanks to its widely acclaimed new models like Fusion and Escape among others. Under the leadership of Alan Mulally the company is building much better vehicles in terms of quality, and it’s doing so in a more efficient and cost effective manner.
Asia in general and China in particular could mean the next growth stage for the company, Ford Motor Company (NYSE:F) is clearly behind its competitors in the region, but rapidly gaining market share. The company sold 27% more vehicles in Asia-Pacific during the last quarter, reflecting mainly the strong performance in China, where sales were up more than 40%.
The stock is up by 34% year to date, but it still has room to go considering that the company is attractively valued in comparison to its peers. While Ford Motor Company (NYSE:F) trades at a P/E ratio of 11.2, General Motors carries a P/E near 12.9 and Japanese competitors are even more expensive with Honda and Toyota trading at P/E ratios of 18.5 and 15.75 respectively.
AIG
American International Group Inc (NYSE:AIG) was at the center of the 2008-2009 financial crisis, and the company would have gone down if it weren´t for the $182 billion bailout it received from the federal government. The turnaround has been long and painful since them, but the insurance powerhouse is now a much healthier and simpler business, free from all government debt and refocusing on growth and profitability
The company reported its seventh consecutive quarter of positive after-tax operating income in the last quarter, and performance was solid across the board. Both volume and pricing are showing positive trends in different segments, and insurance operating income was up by 21% from the prior year to $2.3 billion.
And the good news for American International Group Inc (NYSE:AIG) investors doesn´t end there, the company has declared a $0.40 per share annual dividend and authorized a $1 billion share repurchase program. Now that the company is not indebted with the government anymore, American International Group Inc (NYSE:AIG) is in charge of its own destiny and free to reward shareholders with growing capital distributions.
In spite of these remarkable improvements, the market is still not giving American International Group Inc (NYSE:AIG) full credit for its recovery, the stock is trading at a price to book value ratio below 0.8, while most competitors carry ratios in the area of 1.2. If American International Group Inc (NYSE:AIG) continues on its track to recovery, investors in the insurance behemoth should be handsomely rewarded by its attractive valuation.
Bottom Line
The market has experienced quite a run lately; however, it’s not about the general averages but the individual companies that make those indexes. Digging below the surface can many times lead to compelling investment opportunities, and companies like Apple Inc. (NASDAQ:AAPL), Ford Motor Company (NYSE:F) and American International Group Inc (NYSE:AIG) are still offering attractive valuations and plenty of upside potential for investors.
The article Three High-Quality Companies With Attractive Valuations originally appeared on Fool.com and is written by Andrés Cardenal.
Andrés Cardenal owns shares of Apple, Ford and AIG. The Motley Fool recommends American International Group, Apple, and Ford. The Motley Fool owns shares of American International Group, Apple, and Ford and has the following options: long January 2014 $25 calls on American International Group. Andrés is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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