Why the Apple bears have got it wrong and here’s the proof

“Recently, the press, analysts on Wall Street and many writers here on Seeking Alpha, have turned bearish on Apple and this bearishness has caused many investors to sell their shares and bring Apple’s stock price down,” Mycroft Psaras writes for Seeking Alpha. “Many have stated that Apple is overvalued, but I believe the exact opposite to be true.”

“In observing Apple over the last few years, you would have noticed that Apple’s free cash flow yield went back up to 11% and was only 1% short of where it was at the market bottom of 2009,” Psaras writes. “It currently trades at a yield of 8.2%, so it is still very attractive at these levels and far from being overvalued as the Apple Bears have been stating. As for myself I will not start to worry until Apple hits a free cash flow yield of 4%. To achieve a 4% free cash flow yield, Apple’s stock price would need to hit $995 a share.”

Read more in the full article here.


      1. If you’d bought AAPL when Mac OSX was released, the iPod came out, the iPhone launched, the App Store was opened, the MacBook Air was finished, or when the iPad hit the street, “sooner or later” would be “already” : )

    1. Apple has always been and probably always will be the “Underdog” …. Even when they show the money …..

      Apple is one of the cheapest stocks out there …..

      We should see some import bans against Samsung and slim down of Android as they being attacked from several angles including Microsoft and Rockstar Patents ….. And of course Apple is on the offense as well …..

      Just FYI …. Interesting point – These Patent Wars we are witnessing now PALE in COMPARISON to the Patent Wars that involved the sewing machine back pre 1900 era …. Check it out for yourself, sorry no link to post but search for sewing machine patent cases and you will be amazed at all the court cases and infringements ….

    2. Remember that the quarter a year ago was a miss and the iMac was only shipping 3 weeks at that point. There was no China Mobile. Dell had not closed their doors yet. There was no 64-bit iOS devices. There was no new Mac Pro. etc. This is the quarter that everyone will be comparing against. AAPL lost 10% due to that report.

      Dec. 2013 isn’t the Tim Cook’s lets upgrade everything disaster that Dec. 2012 was!

  1. Institutional ownership of this clunker is still dropping. Apple is going nowhere without a significant increase of institutional ownership. Tim Cook is scaring investors away with his vague talks about Apple’s future direction. Apple is holding onto too much reserve cash that is basically going to waste for no good reason while the stock bleeds. If Apple is truly a cash machine then there shouldn’t be any need to sit on a mountain of reserve cash when it could be used for acquisitions, creating new businesses or even increased dividends. Anyway, let’s see what this quarter brings and if it ends up a repeat of last year’s share price fiasco, then there’s nothing more to be said.

    1. Apple sits on most of that cash because they can control the risk by investing it the diversely. And their investments make a ton of money. They also use that cash buy companies when they think it’s a good investment, and it fits their technology and business plans. That mountain of cash also provides a safe buffer for recessions. What they don’t do (like other less successful companies) is throw money at ventures that might or might not be the next big thing. So far their strategy has made them among the most successful corporations that have ever existed, and with income greater than the GNPs of many countries. So what is it about their strategy that you think is wrong again please?

  2. If Apple were to split into separate companies – for example, OS X/Mac, iOS, etc. – then I would hazard a guess that Wall Street would place a higher valuation on the sum of those components than the integrated company currently enjoys. That demonstrates one of the many flaws of Wall Street, because an integrated Apple is the best Apple.

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