Jim Cramer: Apple’s revenue streams are still flowing

“What happened to all of those Apple (AAPL) bears?” Jim Cramer asks for TheStreet. “Where are the people who urged you to trade out of it so you wouldn’t be hurt by the next quarter? Where are the ones who were ferociously warning you about the gulf, the chasm, the Mariana Trench between here and the next iPhone iteration and how there was no other revenue coming in? Did they disappear? Go to work for Samsung? LG?”

“It is simply ridiculous that people don’t understand Apple has an ecosystem and it is supported by many different income streams,” Cramer writes. “It is preposterous to think that a huge number of people won’t want to gravitate to the iPhone 7.”

“To me, this might be the one “cyclical” that really hasn’t had the run yet in a crowded trade where so much junk has been taken up,” Cramer writes. “Still worth a look, especially as you know the company just raised enough money to buy along with you.”

Read more in the full article here.

MacDailyNews Take: Like a raging river.

SEE ALSO:
Apple shares on biggest win streak since September – March 4, 2016

12 Comments

  1. Steve said Apple was his greatest creation. He has been proven right time and again, all the analysts, trolls, and other naysayers on MDN notwithstanding. Funny how their opinions seem to have ZERO effect on Apple’s cash flow.

    1. Apple’s cash flow is one thing. Apple’s share gains are another. Over the last five years Apple’s share gains have barely beaten out Yahoo’s share gains and almost everyone knows what a stinking pile of poo Yahoo is.

      If Apple is the cash-flow king and Tesla is the cash-burning king then one would be hard-pressed to explain Tesla trouncing Apple to death for five years in terms of share gains based on positive cash-flow. Apple is making money hand over fist while money is slipping though Tesla’s hands at a steady rate but it doesn’t count for much in the real world. It still appears to investors as though Tesla has a far brighter future than Apple. If it’s being based on selling lots of electric cars, I can only say I don’t see the demand.
      Big investors don’t necessarily care about fundamentals or Apple’s share gains wouldn’t be so damn sparse.

      1. Chill. Been long Apple since 2003. This is not the first time Apple shares have languished well below “what should be”. But, luckily, AAPL is like a coiled spring, or maybe plate tectonics: eventually there is a cataclysmic jump that makes up for the “pent up adjustment”. So be patient. And keep the faith.

        Definitely keep an eye on your Apple investment. But don’t worry about Wall Street’s hubris. Unless, of course, the world and Apple’s fundamentals change. Which I do not yet see happening, despite all the pundits blowing their mouths off.

      2. my guess that a big part of the problem with apples stock valuation is that wall street (and maybe us too) got spoiled by years and years of rocket like growth in sales of apple products, and therefore easy profits, following steve jobs return.

        but, things have changed and it is no longer a growth company to the remarkable degree it once was, thus it is all the more difficult to generate profits by wall street greed heads, either by virtue of natural trajectory or deliberate manipulation.

        even so apple continues to build out numerous new revenue streams and will continue to grow its amazing revenue accumulation.

        although its stock valuation will continue to fluctuate, sometimes dramatically, my feeling and faith is that it will also continue to grow – moderately – over the long term. (and maybe even like the coiled spring referenced above – at least in the short term)

        stock holders, of which i be one, will find apple is gradually becoming a buy and hold stock, sort of like att used to be, something good for widows and orphans, because it is a profit making behemoth that will end up paying good sized dividends.

        if all you are interested in is making quick money, there are “better” stocks to invest in, but if you want gradual growth in stock value and a reliable income stream via dividends, then keep buying apple stock, it is cheap now and will only grow in value over time.

        we just need to adjust our expectations. the days of running up from $10 per share to $700 are over, they are an artifact of a particular point in time, of apples near death experience and reincarnation (to mix a metaphor) courtesy of steve jobs genius and what the industry conditions were at the time.

        even so this is a great company, buy and hold and wall street be damned.

        we will win in the end

        1. Based on this random list of companies AAPL, lags on dividend growth rate when comparing by the metric of free cash flow per share growth rate from ’12-’15 (4 yrs.).

          The following random companies are ranked by free cash flow per share growth over the past 4 years:

          STOCK FCPS Growth DIV Growth Rank
          F 144.94% 200.00% 1
          AAPL 87.48% 37.36% 4
          DIS 49.22% 82.67% 2
          PG 27.33% 26.27% 6
          T 3.16% 6.82% 7
          MSFT. -2.47% 55.00% 3
          GE -40.98% 35.29% 5

          As you can see, AAPL is ranked 2nd in free cash flow growth out of these 7 randomly picked companies, but only 4th in dividend growth rate over the past 4 years. If AAPL wants to be “a dividend stock” then they need to raise their dividend more in-line with their free cash flow growth per share growth rate to compete.

          1. I guess the table format didn’t translate properly, but hopefully you can understand the results. The second column should be free cash flow growth per share from 2012 through 2015. The third column should be dividend growth from 2012 through 2015 and the last column is the dividend growth rank of these seven companies.

  2. Maybe the prospect of new products in a few weeks is helping. Waiting to release everything in the fall put a lot of pressure on the stock. The market has nothing to feel perky about during the rest of the year. Spreading the love across the calendar seems like a good idea to me.

    1. The market gets to ponder who the next president is so that will increase volatility. There are job reports, fed rate hikes to worry about and all sorts of big and little crisis each week. If not they’ll make something up.

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