“The Dow Jones Industrial Average [DJIA -2.15%] opened down 100-plus and has faded another 200 since then. Apple’s [AAPL -4.09%] being a high-beta version of the market, as I’d surmised it would be until we get some clarity on holiday demand for its wares,” Willard writes. “Here’s a different way of looking at Apple altogether to help analyze the stock from a variant perspective. That is, divide everything you know about Apple by 100 and see what it looks like.”
Willard writes, “Apple’s stock is at $570, so picture it at $5.70 instead. Apple’s got $130 billion, or about $130/share net cash on the balance sheet, so call it $1.3 billion and $1.30/share net cash. Apple’s going to earn more than $60/share next year, so call it 60 cents instead. So if I told you I found a company that is one of two that is totally dominating the two fastest growing and largest end markets (smartphones and tablets) on the entire planet Earth, with more than a $1.30 in net cash per share while earning more than 60 cents a share and adding another 50-70 cents per share in net cash to the balance sheet over the next twelve months and that the stock is trading for $5.70, would you think that stock would be a buy?”
Read more in the full article here.
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