dta arrow upOn Oct. 30, 2013, I predicted that shares of Apple stock (Nasdaq: AAPL) had a 5-to-1 chance of skyrocketing to $1,000 a share and told you folks to buy it.

A little more than a year later, we have made amazing gains of 48%.

If you play it right, we stand to gain at least another 27% from here.

In fact, I’ve put a date on it.

Today, I want to tell you that date – and I’m going to show you how we’ll get there…

Making a Killing on Wall Street-Shunned Apple Stock

[ad#Google Adsense 336×280-IA]When I mentioned that $1,000 prediction during a TV appearance on FOX Business, I thought host Stuart Varney was going to jump out of his chair.

And Stuart regularly asks me if I stand by my forecast of a split-adjusted $142.85 share price.

Indeed, I do – and I think we’ll get there by Labor Day 2016.

At the time I first made that call, Apple was largely out of favor, a fact that many investors forget now that the stock is up 41% in the past year.

Starting Sept. 19, 2012, AAPL stock slid nearly 44% from its split-adjusted peak of $100.30. While the uptrend started in June 2013, even in October of that year, many investors and Wall Street analysts were still skeptical.

But I had a good reason for my prediction. It’s Rule No. 2 of my five-part Tech Wealth System, which says to “separate the signal from the noise.”

A chorus of critics were suggesting that Apple had lost its way under new CEO Tim Cook.

They said that without the late legendary Steve Jobs at the helm, Apple was destined to flounder.

That was the noise.

But this was the signal – Cook had a distinguished career in the computer industry before Jobs recruited him in 1998.

And Jobs had a lot of faith in Cook.

Wall Street has awoken to the fact that Cook is a shrewd CEO who knows how to keep the Silicon Valley giant on the cutting edge of high tech while still racking up great profit margins.

Take the case of Citigroup analyst Jim Suva. On Dec. 8, he raised his target price for the stock by 12.5% to $135.

In doing so, Suva noted two things…
First, the new iPhone 6 and iPhone 6 Plus are selling faster than expected. Second, many buyers are opting for upgraded models with more memory and storage – and higher profit margins for Apple.

Let’s not forget the iPhone 6 is selling like gangbusters. Apple had a record-setting release, with some 10 million units moving in the first weekend alone last September.

The iPhone’s success was a big part of the company’s great earnings report when the fourth fiscal quarter ended this past September. The company sold 39 million iPhones in the quarter and beat earnings forecasts by more than 8% with earnings per share at $1.43.

Much More than Just iPhones

Beyond mobile sales, consider Apple’s recent alliance with International Business Machines Corp. (NYSE: IBM). The idea is to convert Apple’s expertise in mobile apps and apply that to employees of large corporations and government agencies (the so-called “enterprise” sector).

The two firms haven’t disclosed financial terms, but on Dec. 10, they said they’ve developed 10 business apps since forging their alliance back in mid-July.

These IBM MobileFirst apps for Apple’s iPhone and iPad are designed to help employees carry out specialized tasks in such diverse areas as air travel, banking, field services, insurance, and law enforcement.

For example, one app is designed to help airlines cut costs by having pilots use iPads to help determine just how much fuel the plane really needs to carry. In turn, flight attendants use another app to rebook tickets for passengers’ missed connections.

But that’s really just the beginning of how Apple will leverage off IBM. After all, Big Blue is putting some 100,000 consultants on the program to help promote the applications as well as Apple products like the iPad.

Meantime, Apple Pay is set to shake up the $35 billion mobile-payments industry. The system allows users to make payments through new-model iPhones.

Focused initially on the United States, Apple Pay already has the support the payment industry’s three leaders: Visa Inc. (NYSE: V), MasterCard Inc. (NYSE: MA), and the American Express Co. (NYSE: AXP).

It’s off to a good start. The New York Times reported last month that Apple Pay accounted for 50% of all tap-to-pay transactions at McDonald’s Corp. (NYSE: MCD). And Apple Pay doubled the number of mobile payments made at Walgreen Co. (NYSE: WAG)’s 8,000 stores.

Plus, Apple Pay has a major sales hook starting in 2015. That’s when the new Apple Watch goes on sale.

This is the company’s first real foray into wearable tech, a fast-moving field growing at more than 75% a year.

The Apple Watch, unveiled in September, integrates with new iPhones and some older models and also works with Apple Pay.

I think this smartwatch will be a very successful new product when it hits store shelves in the spring. And I’m not the only one who thinks so.

Morgan Stanley projects Apple Watch sales of 30 million to 60 million units in the first year alone.

This is no pie-in-the-sky projection. Morgan Stanley predicts 10% of iPhone users will buy the new smartwatch. At that rate, we’re talking as much as $10 billion in revenue.

For its part, Morgan Stanley says it’s being “conservative.” When it first came out, the iPad had 14% penetration among iPhone users. So, if the first year run rate is halfway between Morgan Stanley’s 10% estimate and the iPad’s initial track record, that would mean another $2 billion in sales.

Three Share-Price Catalysts

Citigroup’s Suva isn’t the only analyst catching up with my forecast. Just a week earlier, Barclays Capital raised its target price to $140 – just $2.85 below my prediction of some 13 months ago.

Besides the new iPhone’s success, Barclays cited Apple’s billions in share buybacks and what it termed a “healthy dividend” of 1.7% as reasons to buy the stock.

In other words, Apple has multiple revenue streams, it’s receiving a lot of bullish investor and analyst attention, and it’s treating its shareholders like royalty – a trifecta of share-price boosters.

Thus, Apple is clicking on so many cylinders that it’s well on its way to hitting $142.85, my predicted presplit price of $1,000 per share.

That means, even if you haven’t bought in yet, you can still make 27% with Apple stock from here.

And you’ll do so by Labor Day 2016.

That brings us right back to Rule No. 2. The more you learn to separate the signal from the noise, the faster you’ll be snooping out promising out-of-favor stocks.

As we’ve seen with Apple stock, that’s a great way to score major, market-beating gains.

— Michael Robinson


Source: Money Morning