Foster Friess of Brandywine Asset Management on AAPL.
from the 6/30 Master's Select Equity Fund Semi-Annual Report:
>It's a familiar company, but Wall Street analysts still seem to have trouble getting used to how successful the turnaround at Apple Computer has been. We purchased Apple in time to benefit from its June-quarter earnings performance, which exceeded analyst expectations by 8 percent. Despite the strong showing, we believe analysts continue to underestimate the enthusiasm surrounding Apple's new generation of products.
Apple just upgraded the memory, speed and features of its uniquely styled iMac personal computer and G3 professional series Desktop and Powerbook computers. And, as the fourth and final offering in its core product lineup, the company introduced iBook, a $1,599 laptop with more processing power than any other on the market except the G3 Powerbook. Apple's new operating system with integrated internet and searching capabilities promises to further add to the allure of its hardware.
All this growth potential comes at a low price. We bought Apple at $50.45 a share, less than 18 times consensus earnings estimates for 1999. On top of that, the Apple management team is using $500 million of the $3.1 billion in cash it had at the end of of June to buy back outstanding stock. That should position Apple well as it enters the December quarter, typically the strongest period of the year for computer sales, with its four main products moving to market in volume. We expect earnings to be well ahead of consensus estimates for $2.82 and $3.05 a share in fiscal 1999 and 2000, respective.
Apple as added to the Master's portfolio July 7, 1999< |
