Apple, Inc. (NASDAQ:AAPL)

CAPS Rating: 4 out of 5

From iPods to iPhones to MacBooks, Apple uses its “think different” approach to reframe computing, communication, and more.

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Player Avatar JaysRage (90.60) Submitted: 5/17/2013 1:12:45 PM : Outperform Start Price: $441.23 AAPL Score: -6.60

I am generally in favor of the recent cash-management activities. If Apple stays pinned at 450 or lower, it will save the company a ton of money. If Apple actually finds a home much higher than that where it belongs, it still provides a great deal of flexibility to do a lot of different things with all that cash.

I will make a note about the recent $240 Apple stock target by a relatively unknown investor. I have never seen such poor analysis, masked as a numerical analysis in my investing tenure. Summary: Apple has high margins. I'm going to pretend that it doesn't. If Apple had significantly lower margins, they would be worth $250. Therefore they are worth $250.

It has been a long time since Apple introduced new products. Some Apple "investors" are restless and bored and many of them are chasing some other bright shiny things now that Apple isn't as sexy.

Long story short: I think the cash management should keep Apple pinned near $450. If the predicted pipeline begins to produce new products in Q3 and Q4 and beyond as promised by management, Apple will regain the "sexy" and we'll see it approach it's value sometime toward the beginning of 2014. I do think they will see some continued margin erosion on mature products, but that is priced in and then some.

Apple Price Target: 650

Member Avatar JaysRage (90.60) Submitted: 1/21/2014 1:03:24 PM
Recs: 0

I like the parameters of the new China Mobile deal quite a bit. Every negative analyst reviewo of deal continues to site "unknown" or "lower projected" margins, yet the price point for the Iphones represent typical Apple margins and the demand is high, based on pre-sale numbers. However, I had priced in a deal with Mobile that was slightly less favorable....so I've modified my expectations upward slightly. I think most "analysts" of Apple are being extremely conservative on their numbers on projected earnings impact from Mobile and then they are applying a weak multiple on top of those already conservative numbers. Most are projectiong an earnings impact ceiling of .04 I see that as a floor with a range extending to around .08 I also think that Apple had a slightly more successful holiday season than was expected. All reports are that they are maintaining market share much better than most had expected. I had expected some introductions of at least one significant new product by this point in the timeline, but the China Mobile deal is a very big deal.

Minor move in my price target to 680 to adjust to a favorable and well-received China Mobile partnership and at least flatline U.S and world economy. Still expect Apple to introduce new products this year that will move the bottom line, but I am only partially reflecting that in my price target.

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