Research In Motion Ltd (BBRY), Nokia Corporation (ADR) (NOK), Apple Inc. (AAPL) – Smartphones: A Fast Paced Market

Believe it or not Apple Inc. (NASDAQ:AAPL) is another stock that has been punished by investors as its price declined about 31.5% from June 2012 to present date. Apple Inc. (NASDAQ:AAPL) has 17.3% of the smartphone market according to IDC, but concerns have been raised as the company is a laggard regarding the release of new devices after the iPhone 5 did not meet customers’ expectations. Other competitors, such as HTC and Samsung, have released cheaper top-of-the-line smartphone devices earlier, and this has impacted iPhone’s sales that have not met analysts’ estimates. The company is trying to regain the top of the smartphone vendor ranking by changing its image, releasing new products and software, as it exhibited a thorough redesign of its iPhone operating system.

Apple Inc. (NASDAQ:AAPL) remains to be a leading cash flow generating company. It posted $12.5 billion in cash flow from operations for its second quarter results of 2013 and ended with an astonishing cash balance of $145 billion. The company’s overall net sales improved 11% to $43.6 billion compared to the same quarter a year ago. But the company’s gross margin decreased almost 10% to 37.5% and its net income declined more than 17% totaling $9.5 billion from the second quarter of 2012 to the second quarter of 2013.

Apple Inc. (NASDAQ:AAPL)’s stock price drop presents an opportunity to acquire a cash flow generating machine as it is trading at 9.4 times earning compared to the industry’s 11.4 multiple, and its PEG ratio is 0.7. Analysts’ data about the future 12 month price for Apple Inc. (NASDAQ:AAPL) is estimated at a median price of $535 and it seems a good opportunity to enter at a current $396.

Final comment

From this peer group the most solid performance will be given by Apple Inc. (NASDAQ:AAPL) by its tremendous amount of cash flow generation and then Nokia Corporation (ADR) (NYSE:NOK) because its partnership with Microsoft could help the Finnish company get back on its feet. Some analysts are aware of a possible acquisition of Nokia by Microsoft if Nokia is able to turnaround its poor performance the last quarters. Research In Motion Ltd (NASDAQ:BBRY) has disappointed again with its latest quarterly results as analysts were expecting increasing sales of its new devices. The company will have to do much better to match huge rival firms as Samsung and Apple but it is a start.

The article Smartphones: A Fast Paced Market originally appeared on Fool.com and is written by Vanina Egea.

Vanina Egea has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Vanina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.