chinacat
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AAPL Long since 2006
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Post by chinacat on Jul 11, 2018 6:04:05 GMT -8
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ono
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Post by ono on Jul 11, 2018 10:28:44 GMT -8
loupventures.com/apple-street-underestimating-timing-impact-of-net-cash-neutral/"We expect Apple to be net cash neutral in 3 years, ahead of investor expectations of 5 plus year" PDF of worksheet: drive.google.com/file/d/1cojD_tCHC5E85vlYHUjKN-Tizsr2tnP4/viewHere is maybe a glimpse as to what the Apple Board considers before coming to a conclusion (likely conservatively) that AAPL is undervalued and so the capital return is highly weighted toward buybacks. I think the Net Income projections are conservative. I also think AAPL will buy back at faster rate early in these three years (larger than a linear $21.5B/Q in the worksheet). There will likely be buying opportunites where AAPL can buyback even $35B in a quarter without warping the market price. So, I think Loop's EPS projections in the next 1 -2 years are conservative (fewer diluted shares sooner than they plot). The Board likely looks at historical averages of market P/E across cycles, and AAPL's average over the last x years, and the trend. My guess is the board will be very confident buying back at P/E of up to ~17x. And still happy to buyback up to P/E of 20x. But probably accelerating the growth in dividends as it approaches 20x. Pick a P/E you think the board is comfortable with, to map your scenarios for AAPL PPS. I'm comfortable using 17x. I think Apple Average share price reaches $270. a few quarters sooner than their estimate for Q2/21 E; possibly even a year sooner. I'm comfortable being heavy in AAPL.
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Post by david on Jul 11, 2018 12:03:15 GMT -8
As far as I can see, nobody here has any concern about how a trade war might effect AAPL share prices. Am I the only one?
I realize that Apple is important to both sides (China and the US), but certain individuals higher up in our government seem to want to win at any cost. Remember, there is no such thing as "win-win", only "win-lose".
I fear that, by the time we are aware of one side or the other cutting off their nose to spite their face, AAPL will be down by a third.
Please, someone, reassure me.
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Post by incorrigible on Jul 11, 2018 12:21:04 GMT -8
Trade rhetoric is just that; rhetoric. No one wants a trade war and besides, China is almost out of ammo. They only import around $170B a year from the US.
Threat of selling US Treasuries is also out. Where would they put the money? The whole thing is noise IMO.
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ono
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Post by ono on Jul 11, 2018 14:32:37 GMT -8
As far as I can see, nobody here has any concern about how a trade war might effect AAPL share prices. Am I the only one? I realize that Apple is important to both sides (China and the US), but certain individuals higher up in our government seem to want to win at any cost. Remember, there is no such thing as "win-win", only "win-lose". I fear that, by the time we are aware of one side or the other cutting off their nose to spite their face, AAPL will be down by a third. Please, someone, reassure me. I can see a 20% - 25% share price haircut because of trade war, or other reasons. I don’t see the long term fundamentals at as much a risk. So maybe the timeframe to $270. moves further out. The math though improves if Apple accelerates buybacks because of the shares being “on sale”; more shares retired sooner. Better EPS, so improving share price at the same P/E. The “China growth story” hasn’t been as strong lately, yet earnings have been ok. $160B is great to have at the ready, in a recession, which I think we’ll see, in part because of trade war. I agree there is risk. But if I /we don’t need to sell in the next 2 or 3 years, it’ll be OK. More than OK relative to the hell some stocks may suffer.
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ono
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Post by ono on Jul 11, 2018 15:46:31 GMT -8
Sorry, the above may come across more harsh than intended. For perspective, a 25% hit would be about the ~ $142. price 12 months ago.
Facing a recession or trade war, I want to own undervalued or fairly valued stock, with an already low P/E, tons of cash, generating a boatload of cash each quarter, recent strong R&D spending, recent huge Capex investment... A business that is sound and well managed, well positioned for adversity or opportunity So, AAPL.
Some other "story stocks" may have a much worse time than this boring "slow growth" and "look at the math" stock.
The new lower US taxes gives Apple ready access to deploying those worldwide generated cash flows. I think this is just starting to be appreciated.
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ono
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Post by ono on Jul 11, 2018 15:51:24 GMT -8
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