Listen to Icahn, buying Apple stock is a no-brainer

“In Wall Street’s quarter-to-quarter obsession with growth, it’s not surprising that analysts continue to take a wait-and-see attitude when it comes to Apple,” Richard Saintvilus writes for Yahoo Finance. “Despite how cheap Carl Icahn believes shares of Apple are, institutions don’t share the same opinion. If they do, they’re demanding more proof that Apple is indeed the no-brainer investment Icahn claims.”

“There are no shortages of opinion about what ails Apple. The company is coming off a quarter where it sold 51 million iPhones (a company record) while analysts are busy dissecting what Apple must do to avert death,” Saintvilus writes. “By contrast, BlackBerry sells less than 2 million devices and everyone’s applauding its revival. It’s absurd.”

MacDailyNews Take: Welcome to Wall Street, Rich.

“If competition from Samsung and Google was truly intensified, how was it possible that Apple could have achieved such a record quarter? The answer is simple; consumers are willing to pay a premium for a distinguishable device. They value a product that stands out from the rest,” Saintvilus writes. “For now, with the stock trading at just 13-times earnings, I have to agree with Icahn. Apple is a no-brainer. Especially given that the company is buying back billions worth in stock and pays a 2.3% yield. On the basis of long-term free-cash-flow growth these shares are worth (at minimum) $650 by the end of the year.”

Read more in the full article here.


    1. Throw in the US injustice system, bribed by overseas inept copycat shlock companies along with the inept Gaagle Group lobbyist contributors, you have a full fledged three ring circus that is anything but entertaining. FCK’n pathetic.
      Eric T. Mole the “Ring Leader” of said circus of lies & evil. Whatever happened to Patriotism, Character & Honesty? Judge Cote NEEDS to be investigated, questioned & put on trial. She is the bile of this once great county of MINE. For the people by the people? Sad.

      1. Patriotism, Character & Honesty? Heck those left the US a while ago, along with integrity and moral ethics. The US is now for the most part, just another wannabe terrorist state.

        To bad, you’d think with their right to bare arms and their history there would be people fighting for what is right, but I guess they are just too busy watching TV or looking for weapons or mass destruction or torturing people or conducting industrial espionage, or looking for another war, one that will have them of course.

        I mean look at Carl Icahn, the stock IS a no brainer, but Whore Street can figure that out. Looks like common sense has left the country too. A shame to see such greatness fall. I guess the rot is now settling in.

  1. “On the basis of long-term free-cash-flow growth these shares are worth (at minimum) $650 by the end of the year.”

    Or more. Unless the world economy suffers a far bigger crash than 2008 due to the US government spending $1.3 trillion a year more than it takes in for the past 5 years (on average) and using the Fed to create trillions out of thin air to preserve the lunatic “zero interest rate policy.” A big crash will come as this is a far larger bubble than 2008 and there are now many more chickens to come home to roost. Apple lost about 40% of its value then. The next time it might lose 80%. The next time will wipe out personal savings in a bigger way than 1929. And nobody in government is even talking about the totally out of control spending and currency destruction. Even a company as well run as Apple will be devastated by what the politicians are doing now.

    1. Bush spent even more than that. No, personal savings will not be wiped out. FDIC did not exist in 1929. It does now.

      You don’t know what you’re talking about.

      (BTW, I am a (R).)

      1. I know what I am talking about. Yes Bush spent way too much with help from Nancy Pelosi and Harry Reid. Now Obama
        Is doubling the rate Bush spent. You may think that an economy can withstand trillions of debt added every year and then trillions more in digitally invented dollars. Government just prints whatever it wants to float the stock market and buy votes. This economic policy has never produced a strong economy or real prosperity in recorded history. It produced inflation and economic collapse. That is a fact.

  2. The thing is, for Apple to sell say 60m is a smaller percentage of growth than for Blackberry to do so. The fact that Blackberry haven’t a hope in hell of selling anywhere near that many is of no consequence to them. Percentages obviously vary depending on the totals they’re based on, but Apple is so undervalued that any (supposed) slowing of growth should almost not matter for the moment.

    1. When I say it’s of no consequence to them, I mean analysts who sway these things. Logic means nothing in the face of sensationalist, out of context percentages.

    2. I don’t see the growth happening as things stand. Cheaper, higher spec hardware is everywhere.
      If you want to see growth I would recommend Apple to license iOS to the end user.
      Would I pay Apple $50-100 to use iOS on an HTC One? Yes I would. Apple keep getting the 33% on all the apps. etc.
      $350 margins on phone will soon be a thing of the past.

      1. In the coming era of commodity smartphones, no idea is too outlandish. I would suggest that Apple not consider such a thing, however, until after they have rounded up all the livestock that fled the barnyard when iOS 7 was tossed up.

        1. Hannah

          Yeah. You are really smart. Apple sold only 51 million iPhones last quarter and 26 million iPads. That is 77 million iOS 7 devices at an average sale price of about $500 with 38% margins. And that was before China Mobile started selling iPhones. You are pretty brilliant to spot this decline in interest. With only an annual sales rate of 310 million iOS devices how will Apple survive? I suggest you short the stock.

      2. Bosham and I postulate that future market saturation will necessitate new marketing strategies.

        Sure, Apple sales were respectable, despite the bugginess that inevitably accompanies a total rewrite of the OS, not to forget the pallid makeover of the UI which led to a mixed reception. I think their success was due more to the solid hardware design and specs; and we can account for a lot of sales through loyalty upgrades and the lustre factor, things Apple is well-known for emphasising.

        My idea was simply that, in a licencing scenario, a more polished product than iOS 7 ought to be showcased.

    3. Especially when you consider the amount of profit that Apple makes. If a company’s growth is 100x Apple’s because they’re so far down to begin with, what does it matter when they’re making little or no profit, even sometimes giving it away just to keep from losing customers. Wall Street’s institutional thinking on Apple is beyond absurd. There’s no single word in English that I know of that’s suitably derogatory.

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