Submitted by
SK
Options Trading
as part of our
contributors program
.
On Sunday, March 4, 2012 we posted an
article
comparing two of the markets popular stocks and as a short re-cap
we wrote the following:
Apple Incorporated (
AAPL
) or Silver Wheaton Corporation (
SLW
): some would say its a little like David and Goliath or Bambi
meets Godzilla. Apple is currently the darling of the technology
sector and Silver Wheaton is hugely popular in the precious
metals space.
As investors we need to continually ask the following
question:
Is this the best investment vehicle for my hard earned
cash?
So, we took a look outside of our precious metals box and duly
noticed the meteoric rise of Apple. No doubt the supporters of
Apple would find it laughable to be compared with a much smaller
silver streaming company.
If we take a quick look at the performance of both since January
2011 we can see that AAPL is the winner by a long way.
We also posted this chart of the progress that had been achieved
by both companies.
If we now fast forward to today we have the following financial
data from which we can glean that Apple continues to make terrific
progress and that Silver Wheaton has finally started to gain some
traction.
Apple Corp has a market capitalization of $657.97Bln, an EPS of
$42.54, a 52 week low of $342.24 and a high of $702.33, average
volume of shares traded is between 13.00Mln and 14.00Mln, so the
liquidity is very good allowing ease of access and exit when
trading, with 937.41 million shares outstanding. Current stock
price is $701.91.
Silver Wheaton Corporation has a market capitalization of
$14.00Bln, an EPS of $1.60, a 52 week low of $22.94 and a high of
$42.50, average volume of shares traded is between 4.00Mln and
5.00Mln, so the liquidity is good, with 353.87 million shares
outstanding. Current stock price is $39.55.
In terms of market capitalization APPL is 47 times bigger than
SLW, also of interest is that its EPS is greater than SLW's stock
price.
Now, when looking to invest in a stock we try to acquire a stock
that we believe can double in 12 to 18 months. For Apple to double
it will need to become a trillion dollar plus company. This is a
big ask, even for a stock market favourite, however, it is heading
north with considerable speed. On the other hand, SLW will
need to grow its value from $14Bln to $28Bln, which is also a big
ask, but who would have thought it would have gotten this far back
in the day when it could be acquired for around $4.00.
These are two totally different companies in different market
sectors so its very much like comparing apples with oranges.
However, when we look at the price of these stocks as of March
4, 2012 (when we suggested that SLW would outperform AAPL by the
year end) and compare them to the prices that we have today, we get
the following result;
AAPL: March 4, 2012, $545.18 - Today $701.91 an
increase of 28.7%.
SLW: March 4, 2012, $37.59 -
Today $39.55 an increase of 5.2%.
Clearly, Apple has outperformed and has been the place to be. So
well done to Apple shareholders.
Taking a quick look at the latest chart we get a similar story,
however we would ask you to note the recent gains made by SLW since
July, largely on the back of improving silver prices and the
acquisition of additional revenue streams. The magnitude of this
move has been phenomenal in our opinion. We now expect silver
prices to continue to rally with SLW making very good
gains.