Tech blue chip Apple (AAPL) has been on a roll lately, dominating market headlines by breaking market milestone after market milestone. First the company made headlines by breaking through $500. Next, the company’s market capitalization topped $500 billion and the latest news was that Apple briefly broke through $600 billion, trading at a new all-time high.
But the latest headlines are a little tougher on the tech giant, after the Department of Justice filed a lawsuit that accuses the company of price-fixing in the ebook market.
Also named in the suit were publishers HarperCollins, Simon & Schuster, Hachette, MacMillan and Penguin. The first three publishers settled immediately while Apple, MacMillan and Penguin plan to fight on in the legal proceedings.
Now, I don’t see much to worry about here for Apple, since the government’s case against the company is much weaker than its case against the publishers. Plus, Apple is just a distribution point for the books—and a relatively small one at that, considering that Amazon.com (AMZN) takes up as much as 90% of the ebook market.
So take the opportunity to pick up a few more shares of Apple. The stock is still trading at just 14 times its expected earnings for the next year—in line with the industry average and actually less than the NASDAQ’s Price/Earnings ratio.
As I’ve discussed, the real growth for Apple is in its new products—like its entry into the 4G market, its new Retina display that trounces the resolution of any other handheld gadget on the market and the potential for a full-fledged Apple television set.
Keep tabs on AAPL shares using Portfolio Grader, and continue to check in here for additional updates on this exceptionally profitable company.