Apple (AAPL) Stock: Major Buyers Stepping In At $90
Apple, on the other hand, is being snatched up whenever it falls below $90. To reiterate what we said two days ago, the first time this happened:
- Apple has $23 a share of cash (and no debt).
- Excluding this cash, the business itself is valued at about $58 billion (at $90)
- This is less than 10-times trailing free cash flow of $6 billion.
That's trailing free cash flow, not some analyst dream.
Will Apple get hit by the global slowdown? Yes, we think so. Could the stock go lower? Of course. Does Apple need a succession plan? Yes.
But...Will Apple get crushed in a slowdown? We would be shocked if it did. Is a major slowdown in the stock at $90 a share? We think so.
So we can certainly understand why some big buyers are hoovering up the stock every time it breaks $90 a share.
See Also:
Apple's Stock Falls Below $90
Google's Moment of Truth: Stock Breaks $350
100% invested in Apple. Everything bros Every penny.
aapl is famous for creating ultra-fancy ultra-expensive non-necessities PCs & gadgets while literally everything produced by goog is focused on performance/dollar metric. so guess which company is made for recession? and it doesn't take a genius to figure which one will come out a much stronger/larger company after the recession.
the media/newspaper's hatred towards google is obvious so every time goog goes down, some news character is bound to cheer and can't wait to slap on a lower price estimate. it's not really doing their readers a good service.
huh?? the only way they make money is off ads - when business stat cutting back guess what advertising dollars will shrink. That is what is cause the google price to fall. Google makes a bunch of free stuff so they can get ads forced on people.
Might buy more at $70 or below.
I understand the desire to simplify valuation metrics. But there are more robust methods available (say a DCF) - and tools are appearing on-line that make the valuation process easier to complete.
Have a look at the URL for an $AAPL valuation.
Just saying...
not here to pump goog. but just can't help the ignorance...
basically goog is a powerful long-tail theory application in advertising world as ebay in auction and amzn in retail. the gist is, those long-tailed companies are able to make money that traditional ones (like tv/newspaper/radios) can't and flourish in a tough time while most traditional competitors die out --- much like how dinosaur goes distinct and mammals prevails after the disaster. just check out how amzn/ebay survived the last bust and come out much stronger. (well, except, ebay, which is not very run by their CEOs... ebay used to be named to have the "perfect" business model but they slacked off)
and those "fee stuff" (and yes, sometimes maybe even shitty stuff) you talked about are meant to be free. they are just part of the self-reinforcing cycle to enhance long-tails' reach and depth. and, when developed well, they will even bring in very lucrative profits. so while msft sells their office/exchange suite for hundreds per license, goog is busy giving away goog docs/email bundle for just $50 a pop. the fact is, goog probably doesn't need those fess but they are just the icing on the cake and can even grow tremendously during a recession.
if goog is to grow unhindered during the recession, you will see it emerges as an even bigger cash cow than what msft is now.
aapl is worth $125??!! LORD....
not sure how you price in the following in either free cash flow or a DCF analysis....
1. co's main products will long be remembered as the bubbly by-products of the once high-flying casinos on the wall street. (guess where is the glassy looking aapl store co-located :) --- the wall street investment banks' "grave yard", that is. )
2. co's CEO's worth half the company's value
3. competitors catching on like forest fire. thanks to goog's push on wireless spectrum, free mobile OS and free mobile app marketplace; the barriers for entrance and protection of aapl's high margin on smart phone business are now smashed into pieces
using plain free cash flow or DCF analysis, you are blind sighted into believing aapl is gonna to produce consistent/predictable free cash flow over the however couple years in the analysis... but the ugly truth is, companies facing aforementioned difficulties alike are dangerous and unpredictable, especially in a recession. that's why i don't even buy Henry's say about aapl's 10x free cash flow is cheap.... not to mention valuecruncher's $125 price tag, which translate to15X FCC.
try google on FCF/DCF analysis instead
I've worked in the advertising field for 20 years and every recession provides new excuses to drop ad revenue. Our company has already seen a 22% drop in revenue this year, and most of our clients are talking about reducing their budgets for next year. I can't imagine this won't have an effect on Google at some point, with their dependance on ad revenue.
Apple, on the other hand, is stealing market share which provides growth and stability even in a recessionary environment. Their business model in not nearly as narrow as Google's as well. Apple has far more revenue streams and doesn't rely on one sector (advertising) to generate them.
I think it would be ignorant on anyones part to think Google is better positioned given the strain on advertising budgets now and in the future. Im old enough to have lived through several recessions, and I can assure you that advertising is going to get hit hard this time as well.
I would love to see you run a DCF. That would be an exercise in futility given Data Mining and all. I could run 20 DCF's on Apple and come up with 20 different equations given the difficulties in finding accurate data and the "variables" involved in intrinsic value models.
Good luck with that endeavor, since any answer you come up with will be highly bias and not worth the paper it's printed on.