“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.