“Today, I find myself in the unusual position of defending Apple stock from the sudden deluge of sellers,” Brett Arends writes for MarketWatch. “If you haven’t been living in a cave for the past week, you’ll know Apple’s stock price recently collapsed to $445, from a peak of $700 last year. Wall Street suddenly discovered that Apple faces competition from companies such as Samsung. And Apple didn’t give a confident outlook for the year ahead.”
“I hesitate to disagree with the market, but in this case, I might make an exception. My job, alas, prevents me from buying any stock I might write about. But if I could, I think I’d be a buyer of Apple stock today,” Arends writes. “Put in a nutshell: This is still a fantastically successful company, and the stock is dirt cheap by almost any measure.”
“Apple’s latest quarterly earnings show the company has $169 billion in cash and liquid assets, and just $69 billion in total liabilities. So the company is basically sitting on $100 billion in cash or equivalents — about $105 per share. (It has another $24 billion in commitments to buy components and pay leases on retail stores. Including those would change the numbers a bit, but not much.) In short, Apple isn’t really a $445 stock. Net of cash, it’s a $330 stock,” Arends writes. “That’s just seven times forecast earnings of $45 per share for the current fiscal year, which runs through Sept. 30. That’s half the rating of the rest of the stock market, which has historically traded at about 14 times forecast per-share earnings.”
Arends writes, “At current prices, Apple, net of cash, is less than six times forecast cashflow per share.”
Read more in the full article here.
Related article:
WSJ’s Arends: Why I’d buy Apple stock as well as a Mac today – December 26, 2008
They’re paying crazy dividends, that alone should be reason enough to buy and hold onto for long term, regardless of whether it continues to fluctuate up and down with extremely dramatic analyst commentary. Apple isn’t going out of business any time in my lifetime.
Nothing is new here, apple has never told anyone what was going to happen in the future.
When Apple is nearing highs and 90% of the stories are positive and you hear lots of speculation about $1000 or even $2000 a share thats your clue that the institutional investors are getting ready to play “lets f with Apple” again.
The stock price will hit a spingtime peak around April 10, then slump through the summer until the last week of August. Nice ride through September, down by late October, up for pre holiday, then down again in mid January. Dividends of $2.65 per share per quarter, maybe going to $2.85.
Using astrology to make the predictions?? Actually that might be more scientific than the way most bloggers make predictions about Apple stock.
PS, the author of this article is using numbers like Apple is Walmart or Amazon. You know, Amazon with a p/e of 3000. A bubble ready to burst. But then again, who cares, speculators are only looking for a quick return on their buck. Company value means nothing.
Just a thought,
en
Another week and another week of frustration for AAPL holders. Unless Tim Cook announces his resignation, there will be no upward movement. I went to two Apple Retail stores, Best Buy, and Frys this weekend to buy an iMac. There were none to be found. Neither were there any thunderbolt-to-firewire cables and only one store had a thunderbolt external drive. Also, the Apple Retail store staff I came in contact with were about as helpful as those at Best Buy – one of them said they had never seen a Thunderbolt cable. Steve Jobs would have NEVER let this situation come to pass! These are the reason AAPL has collapsed. It’s not Wall Street manipulation – it’s investors who have seen what is happening to the company and they see the future as dismal under the current leadership.
When a new product is hot, it can be difficult to find. This is usually a good sign. Just order one and wait your turn.
After reading your blustering for a few weeks now I have come to the realization that you are here because everyone in the real world has long since shut you out. You have no understanding of Tim Cook, Apple or supply chain constraints. Do you think that Tim Cook is new to Apple? He has been at the helm of Apple long before Steve Jobs stepped down. The only difference between the Apple today and Apple several years ago is that the courts now allow stolen technology to be used as competition and analysts trash Apple to hide the fact that they really have no idea what they are doing. Set the bar high and bash the company to protect their uneducated guesses. Don’t bother replying because I, for one, have reached the limit for paying any attention to your rants.
ptrollpeterson, you wouldn’t go into an Apple store if there was a bucket of water just inside the door and your pants were on fire.
Here, I think is the problem, Wall Street is inherently unstable. Professional traders make money on up or down movement, so long as they can predict the movement. That is why they love momentum in a stock price.
It they can get a stock moving up, that is fine. People are putting money into the market. It they can start a bit of a panic, better yet, they can start short selling, get the sell off really rolling along, and in effect reap as much as possible of the money others put in during the rise in price. The key for the short seller, who sells today but provides the actual stock later, is in being able to correctly predict a falling stock price. Nothing like a bit of manufactured panic to provide that insight.
Buying on margin, buying today and providing the actual stock at a future date, is a similar practice to use on the upside. The problem for the “professional” is that people do not tend to panic when purchasing a stock moving up. They tend to be careful. Still there are upward momentums to identify and take other people’s money out of.
An honest stock market would have no short of long selling. It would simply be a place for people to buy or sell stock, paying a slight fee for the service.
In today’s system the common person tends to buy slowly on the up swing, being a careful investor, and sell in a panic on the fast downturns. Those investors are told the good times are over. Get out now while you still can. In effect they are being scalped by the professionals who are shorting the stock.
Is this any way to own a country? It is now wonder the little guys stay away. This system is undemocratic.
With the stock market being run by the hedge funds and these superfast buy and sell programs, the little investor doesn’t stand much of a chance. They’d have to constantly monitor the condition of their shares or they’d need to have their own automatic buy and sell options in place. But what casual investor is like that. Many of the people I know who own stocks through a broker don’t check in all that often so if there’s lots of loss in after-market activity, they won’t have time to react. Apple lost $50 within minutes which means the hedge funds were selling huge blocks of shares with a push of a button.
I’m personally not interested in chasing hot stocks. I’m just looking for solid stocks I can stay with over a period of time and I’m at a huge disadvantage to the hedge funds who just constantly change focus in a month or so. It hurts to see Netflix become a far better investment than Apple in just a couple of days, but what can I do except to chase the hedge funds movement whenever they make a stock hot or cold.
I definitely don’t think this sort of trading is good for the economy because it would seem to de-stabilize the stock market by seemingly turning good investments into bad ones and vice-versa. It certainly must be frightening to the average mom and pop investors.