Is Apple Inc. (AAPL) Still King of the Tech Titans?

Now back to our original question

So, now that we have some information about what the companies are doing, what about our original question –if you could only buy one tech company stock, which one would you choose?  Apple appears to be oversold, while Google appears to be fairly priced.

If you own Apple, and it appears to be oversold, it might be a good idea for you to hold onto it.  Its current PEG ratio is .74 which supports the argument that it is currently undervalued.  PEG is a widely employed indicator of a stock’s possible true value.  A crude analysis suggests that companes with PEG values between 0 and 1 may provide higher returns.  Google and Microsoft have PEG ratios of 1.19 and 1.17 which suggests that they are both close to being fairly valued.  If you are a new investor, you may want to consider Apple as well.

If and when Apple’s share price increases, some analysts have target prices north of $500, you may want to swap out of Apple and consider Microsoft.  The effects of Microsoft’s paradigm shift and new model could start to kick in the next quarter or so and may create a sustainable increase in cash flow that could add substantial value to the company’s share price.

Bottom line

Anyone of the three is still a good investment.  If you have to pick one, start with Apple, switch to Microsoft, keep watching Google.

Trailing Twelve Months (as of December 29, 2012)
Trailing Twleve Months (as of December 31, 2012)

The article Is Apple Still King of the Tech Titans? originally appeared on Fool.com and is written by Mark Walker.

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