James Altucher Names Three Stocks That Have Better Prospects Than AAPL This Summer

In an article on The Wall Street Journal, James Altucher said that although Apple (NASDAQ: AAPL) is the greatest company ever, the iPhone 4 antenna problem is causing headline risk for its shareholders. On top of this, there is the possibility that Google’s (NASDAQ: GOOG) Android-powered phones are gaining on iPhones.

While James admitted his undying love for the iPad, he said that there are three stocks that have better prospects than AAPL this summer.

02Micro International (NASDAQ: OIIM) provides the LED lighting in the iPad. Thus, OIIM will directly benefit from higher sales of iPads. Since 02Micro is very small as compared to Apple, sales of even a few million iPads will make a huge impact on the company’s ultimate revenue and profit. If these factors were not enough to convince traders, there is another one. The company trades for only two times its cash.

KLA-Tencor (NASDAQ: KLAC), which is providing chiptesting for Intel (NASDAQ: INTC), is one stock that will benefit immensely if INTC posts good results for the second quarter today. Meanwhile, KLAC has recently been upgraded by Credit Suisse, which has also assigned the stock a price target of $40. This target price reflects 35% upside from the stock’s current value. The company is trading for less than 10 times forward earnings and has cash reserves of $800 million.

Yahoo (NASDAQ: YHOO) is currently the cheapest Internet stock, and in mid 1997, split adjusted, YHOO and AAPL were trading at roughly the same price. James said that there is a high possibility of a sharp increase in YHOO’s earnings by the end of 2010 due to the company’s outsourcing deal with Microsoft (NASDAQ: MSFT). While media seemed to dislike this deal when it was signed, James believes it is a big win for YHOO.

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