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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (162815)	12/12/2013 8:03:17 PM
From: Art Bechhoefer	2 Recommendations Recommended By MGV rnsmth Respond to of 213176

Bearish arguments on AAPL reflect not only misinterpretations of management views but an overall pessimism about the market in general, and tech stocks in particular. If you look at other tech stocks, you'll see what I mean. A few examples: Qualcomm has received many upbeat analyst recommendations recently, yet the stock retains its low forward looking price-earnings ratio of about 13, at a time when revenues are growing between 15 and 20 percent, and double digit earnings growth is a certainty. SanDisk, the leading producer of NAND flash memory, used in many Apple devices, has higher gross margins than any of its competitors, including Samsung, Hynix, and Micron. Yet SNDK shares have been dropping to a point where the forward looking price-earnings ratio is around 11. I think AAPL is equally undervalued for the following fundamental reasons, irrespective of overall market pessimism: 1. Earnings from China are likely to be much better than expected because the Apple brand is highly valued everywhere in the world. People are willing to pay more for Apple products. 2. Despite increasing competition from other phone and tablet firms, Apple products still work better. I have the latest model LG-G2 phone, with a processor that effectively is as fast as the A7, and with low battery drain as well. However, the G2 has all sorts of problems – so many that Verizon has already replaced my G2 with a new phone (not a refurbished one). It is a very versatile phone, with a bigger screen than the 5S, but still, it doesn't work as well. As for tablets, it seems as if the only new models NOT being discounted are iPads. 3. Though Apple is likely to see reduced profit margins on its devices, owing to higher component costs, many analysts ignore the tremendous cash flow derived from iTunes and related stores – an ecosystem that no competitor, not even Amazon can match. 4. How Apple decides to use its free cash flow, whether generated domestically or held overseas, is difficult to predict. If Apple wants to increase its dividend, paid out of domestic cash reserves, it can still pay interest on its bonds, if need be, by repatriating overseas cash, which, if used to pay interest, is tax deductible. Even if overall market averages remain much as they are currently, or move up only a few percentage points, I believe AAPL shares can easily pass $600 in the coming year, which isn't a bad return on an investment, given the size of the present dividend, added to the increase in share price. Put another way, Apple is likely to increase its earnings per share by a percentage greater than that expected for the major market indexes, including NASDAQ and the S&P 500. Yet the price-earnings ratio of AAPL shares remains below average. Draw your own conclusions. Art

To: MGV who wrote (162815)	12/12/2013 9:59:28 PM
From: HerbVic	Read Replies (1) \| Respond to of 213176

The way I interpret the statement below is that he is applying the amounts to net of increase in domestic cash reserves for the period specified. That does not imply anything about growth. It simply says that domestic cash reserves for the period has remained flat while returning cash to shareholders and buying back stock. Considering the size of the program, that's really quite impressive. We can infer by extension that flat growth and continuation of the capital return program could result in a decline in domestic cash. However, this quarter seems to be shaping up for ~20% growth (WAG) and the coming year holds out for some new announcements. I just don't see that there is anything to read into this that we don't already know. In fact, we have returned to shareholders or invested essentially all of the increase in available net cash generated since the beginning of our capital return program in 2012.