“Appearing on the ‘Danger Zone’ segment of MoneyLife with Chuck Jaffe, Trainer – who prefaced his remarks by noting that Apple is great company and that he and his firm are dedicated users of its products – said that the company has had ‘extraordinarily high returns on invested capital,’” Jaffe reports. “Trainer said that if the company can maintain a 75% return on invested capital, ‘the stock’s worth about 295 bucks. If the return on invested capital drops closer to 50, the stock’s worth closer to 240 bucks, and I think that’s where it ought to be, or where it’s going to go eventually.’”
Jaffe reports, “Trainer, whose firm rates securities on a scale from very attractive to very dangerous, noted that Apple’s tremendous profitability keeps it with a ‘neutral’ rating, noting that ‘Apple looks really cheap – and this is where people are getting caught up – if you look through the rear-view mirror to where profits have been… but you have to realize they are on the back side of the mountain.’”
Read more in the full article here.