JPMORGAN: One Of These 15 Companies Could Be The Next Apple

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Photo: MadeMan

The 10-year return on Apple is  right around 5,000 per cent.That feeling you’re getting in your gut is regret.

You can’t take a time machine back to the ’90s and buy Apple.  But, you can invest in the stock that could become the next Apple.

“We have compiled a list of 15 ideas for companies that our analysts view as having secular growth opportunities, a strong market position, and attractive valuation, which make these equities attractive to own as the potential next ‘Apple,'” wrote JP Morgan’s Tom Lee in a recent note to clients.

“We compiled the quantitative and qualitative characteristics of AAPL.  Among them are: (i) products that inspire a following; (ii) reputational excellence; (iii) lifestyle products that focus on what one can do with their services/products; (iv) culture of success; and (v) prodigious growth offset by (vi) attractive valuations and (vii) ability to return capital.”

From Lee’s lengthy report, we pulled the key characteristics that make each of the 15 following companies something like Apple.

NetApp

Ticker: NTAP

Rating: Overweight

Comments: 'NetApp's easy-to-use software architecture has built a loyal following of customers over the past five years. The company's software-driven systems are easier to scale and manage relative to the competition, based on our conversations with partners and customers in the field.'

Source: JP Morgan

Amazon

Ticker: AMZN

Rating: Overweight

Comments: 'Over the last 10+ years Amazon has done something we once thought was impossible online--win customer loyalty. The company's focus on price, selection, and convenience has enabled it to cut through a very crowded physical retail and e-commerce space to earn repeat customers.'

Source: JP Morgan

LinkedIn

Ticker: LNKD

Rating: Overweight

Comments: 'Strong user base among corporate enterprises and consumer users. More than 9200 enterprises and 100M+ users. LinkedIn has strong network effects driven by social dynamics and Internet trends. LNKD has established itself as the leading career network.'

Source: JP Morgan

Disney

Ticker: DIS

Rating: Overweight

Comments: 'Theme parks (Walt Disney World and others around the world, Disneyland Shanghai in development), movies/characters (animated classics, Pixar), ESPN. All three areas mentioned above are unrivalled.'

Source: JP Morgan

Comcast

Ticker: CMCSA

Rating: Overweight

Comments: 'Comcast continues to lead the cable and media space with its aggressive culture and leadership.'

Source: JP Morgan

Trimble

Ticker: TRMB

Rating: Overweight

Comments: 'Trimble's technology is an industry-standard in engineering and construction, surveying, and in agricultural field solutions. Trimble Dimensions, the firm's international user conference, is now in its 6th year; last year it attracted nearly 3,000 participants from more than 60 countries.'

Source: JP Morgan

Qualcomm

Accenture

Ticker: ACN

Rating: Overweight

Comments: 'The company focuses a lot on preserving its culture--First, ACN does not pursue any large acquisitions which might dilute its culture. ACN roots as a pure play consulting company with partnership model resulted in an army of senior partners that own a lot of stake in the company. ACN spends a lot in training its employees--spent $800M in FY11. The company pays a mix of variable and fixed compensation to motivate its employees.'

Source: JP Morgan

Broadcom

Ticker: BRCM

Rating: Overweight

Comments: 'Broadcom is the number one supplier in enterprise networking, broadband, and mobile connectivity semiconductors. Their leadership in digital signal processing, mixed signal/ feature/functionality integration, and best-in-class performance has driven their success in the markets in which they compete.'

Source: JP Morgan

VMware

Ticker: VMW

Rating: Neutral

Comments: 'VMware is writing the definition of what virtualization is and what it can mean going forward.'

Source: JP Morgan

TIBCO

Ticker: TIBX

Rating: Overweight

Comments: 'The last remaining pure-play integration software company with maintenance renewal rates easily in excess of 90%.'

Source: JP Morgan

QLIK Technologies

Ticker: QLIK

Rating: Overweight

Comments: 'A unique culture that values the employee as an agent of change--'to change the world.''

Source: JP Morgan

ANSYS

Ticker: ANSS

Rating: Neutral

Comments: 'In the design engineering field there are dedicated simulation engineers that live and breathe this technology. Making it easier, this is starting to expand out to the basic design engineer.'

Source: JP Morgan

Intuit

Ticker: INTU

Rating: Overweight

Comments: 'Best company in coverage at hiring, developing, promoting and inspiring talent. They are very GE-like (Welch era) in this approach.'

Source: JP Morgan

Cree

Ticker: CREE

Rating: Overweight

Comments: Regarding culture: 'No Idea, Cree is a black box.'

Source: JP Morgan

JP Morgan sees these 15 companies at various stages of Apple's evolution

How many of these stocks do you think made Goldman's list?

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