Since84
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To infinity and beyond!
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Post by Since84 on Jan 18, 2018 3:53:08 GMT -8
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Since84
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To infinity and beyond!
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Post by Since84 on Jan 18, 2018 5:53:16 GMT -8
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Post by artman1033 on Jan 18, 2018 7:00:06 GMT -8
AAPL ALL TIME HIGH! $180.05 All Time Highest TODAY intraday
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CdnPhoto
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Post by CdnPhoto on Jan 18, 2018 9:51:44 GMT -8
Some comments on AAPL's cash repatriation:
A little math:
$3.00 to $11.00 at a P/E of 20 would see an incremental increase in the share price of $60 to $220. I'm guessing any of the longs here won't mind that. Surprising they didn't boost the Price Targets significantly. Maybe they're waiting until details on buyback is announced.
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chinacat
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AAPL Long since 2006
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Post by chinacat on Jan 18, 2018 10:52:31 GMT -8
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ono
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compensation
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Post by ono on Jan 18, 2018 12:04:13 GMT -8
Some comments on AAPL's cash repatriation: A little math: $3.00 to $11.00 at a P/E of 20 would see an incremental increase in the share price of $60 to $220. I'm guessing any of the longs here won't mind that. Surprising they didn't boost the Price Targets significantly. Maybe they're waiting until details on buyback is announced. The math exercises with even "just" their $180B net cash will get very interesting! And, AAPL is still generating roughly $5B cash/month. I would like to see the math behind this analyst $3. - $11. in estimated earnings, as this is a really wide range; but as you illustrate, if it's even the $3./share. Wow!
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Post by artman1033 on Jan 18, 2018 13:08:25 GMT -8
AAPL ALL TIME HIGH!$180.10All Time Highest TODAY INTRADAY 30,263,573 shares traded today AAPL ALL TIME HIGHEST CLOSE!$179.26aaplinvestors.net/stats/rank/AAPL market CAP. 911.85 BILLION AAPL ALL TIME HIGH market CAP. 911.85 BILLION TODAY
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ono
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Post by ono on Jan 18, 2018 13:47:54 GMT -8
Situation:
Their stated capital return program number is $300B by March 2019; having returned $225B or more to date.
AAPL should have net cash of $180B (happens to be roughly 20% of market cap) …
Recall that AAPL is generating $60B/year in free cash.
What do they do with this cash flow?
They've recently been returning $48B/year via share buybacks and dividends.
So, they'll still be generating $12B year to spend on tactical talent and IP acquisitions, another new campus, build out an internet satellite constellation, Project Titan II, etc.
Basically they continue what they've been doing, with the cash they're generating. In April they'll update their capital return program. It's pretty easy to believe that AAPL announces that it intends to buy back another $60B by March 2021 (in addition to the $60B they've said they buy back by March 2019), and raise the dividend 10% again. (Putting the return program to $392B by March 2021).
What do they do then with the $180B of excess cash?
Say AAPL buys back 10% of shares ($90B via modified Dutch Auction), and keeps the other $90B at the ready. I think they'll take their time to get used to having $90B of powder at the ready as they talk with potential partners. Maybe they'll buy some businesses with strong recurring revenue to add to the already rapidly growing services business; this should shore up sentiment and maybe expand the P/E.
Anyway, take this year's earnings estimate of $11.45 x 1.10 (+10%, due to 10% share reduction) = new $12.59 earnings/share; x 17 P/E gives a price of $214.
Apple has a problem, a nice one.
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Post by incorrigible on Jan 18, 2018 18:07:17 GMT -8
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ono
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Post by ono on Jan 18, 2018 18:20:33 GMT -8
Yes, good article. Thx:
Conclusions: AAPL and other names provide good relative value
If AAPL earns $12 per share in calendar 2018, which is close to consensus, then at $179 at Wednesday's close, it is trading at 15X forward EPS. This would put it at about a 25% discount to the SPY and probably a slightly lower discount to the forward P/E of the other 29 DJIA (DIA) stocks. I continue to believe that this makes AAPL an easy stock to buy, and to hold without worrying exactly what sales and earnings will have been for the December quarter. It's making great products and hides its pipeline assiduously. So I'm a permanent holder indefinitely.
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