When you allow yourself to daydream about Apple numbers it gets pretty bizarre. Previously, I posted about what Apple could buy with $100 billion. Once you think of it that way, you start to realize how much that really is.
Here is another odd thought (and you should know that I am most of the way through a bottle of cabernet):
Analysts are quoting the "law of large numbers" lately. Okay, makes sense I guess when looking at Apple's huge capitalization. So, let us assume for a moment that Apple does not grow from here but just maintains its current levels of revenues, profitability, etc. Apple added $16 billion in cash and equivalents this quarter. Considering it to be a $400 billion company and remaining so for the moment and adding $16 billion per quarter, Apple would have enough cash and equivalents on hand to buy itself out within 5 years and become a private company. On that alone, the stock would have to go up in value. It just boggles the mind.
Okay, so now think about the markets that Apple competes and may compete (TV) in the future. Apple's market share in the Mac and iPhone markets is nowhere near saturation and the iPad market, though dominant, is growing at a fantastic rate. Then, you add new future products and it becomes impossible to imagine Apple without growth.
So, how many companies do you know of that, even with a little PE compression, absolutely have to have their stock price appreciate or it becomes unfathomable? |
