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Sorry for the delay in this write up, but I was playing in the Little Tiger golf outing yesterday and then drank about 1000 beers at the 19th hole. Most of the time, $$$MR. MARKET$$$ likes to buy stock in companies that no one has heard about, but he loves these companies because they make money quarter after quarter and $$$MR. MARKET$$$ knows this trend will continue. Every once in a while, $$$MR. MARKET$$$ buys a stock that everyone has heard of. Of course the company is Apple.
I bought AAPL two years ago:
So I guess it’s time to buy it again. On Thursday, I bought AAPL at 586.04. I will sell it in 4 – 6 weeks at 675.79. Here’s why I like AAPL:
Like all $$$MR. MARKET$$$ stocks, it starts with the chart:
I’ll skip the technical mumbo jumbo but it sure looks like the stock price is consolidating and ready to resume its run. Why will it resume its run?
Because the company makes money…lots of it.
Smartphones have consistently been biting off a greater chunk of the overall market, but they still account for only between 30 percent and 40 percent of all phones sold across the world, however iphones hold only around 9 percent of the global mobile phone market. Talk about opportunity for growth! With a PE of only 14, the stock is not expensive at all. Look at the rest of these stats:
Profit Margin (ttm): 27.13%
Operating Margin (ttm): 35.69%
Return on Assets (ttm): 25.84%
Return on Equity (ttm): 47.10%
Forward P/E (fye Sep 24, 2013): 10.76
PEG Ratio (5 yr expected): 0.57
AAPL is fun to watch when you don’t own it. Then every now and then it’s time to own it. Each time the stock rockets up, I tell Titan Omega to get out and take his profits. Of course then it just goes shooting up again and he exclaims he is smoking drinkin freeing his mind. Then everyone thinks that Greece and Spain are going to make iphone sales go away, and the stock sells off and Titan Omega is all faceful. But if you see through all of this haze and volatility around us, Apple is an amazing company, one that will continue to excel and dominate the technology sector.
Check out Apple’s balance sheet: Apple has ZERO debt and a lot of free cash. This means that if they want to invest in some new technology, company, presidential election, or whatever they want, they can do so. AAPL has 28 billion dollars in cash and zero debt. They could make a lot of their employees really wealthy if they wanted to do so. Most likely, the cash can be used in the future to soften the blows of market downturns or recessions. Apple is not beholden to the short term wooing of Wall Street. They don’t have to worry about solvency. They can be patient and continue to make great business decisions.
Of course they can always use the cash to reward its shareholders with billions of dollars in dividends – looks like they are headed in that direction. Apple has the ability to easily pay an ongoing dividend with a significant yield (2% to 3% range) along with the ability to grow it over time. Defined quarterly dividends would increase the value of the stock in addition to its incredible capital growth. Once they issue a dividend a whole other class of mutual fund and professional managers who have to buy dividend stocks will pile into the stock, providing further upside. They also instituted a $10 billion share-buyback program.
Another HUGE reason to invest in Apple is their past quarter earnings, and the projected earnings for the next two quarters. Their 2nd quarter earnings of 2012 were $12.30 per share. That beat their 3rd quarter earnings in 2011 by 33%. That’s HUGE. Next quarter, they are expected to beat their Q3 2011 earnings by 33%. The company is growing at a rapid pace and investors still love it. When you think about the size of this company and how rapidly it is growing it truly is mind boggling.
The future of Apple depends largely on how well they continue to innovate. I have a good feeling that they already have some awesome products designed and in the pipeline. This will get me my 15% gain in no time.
Investors who also believe that Apple will continue to invent new successful products would see a wonderful investment opportunity at current prices.
Many ANAL-ysts believe that the shares of Apple have huge potential in the coming few years and this is just the beginning. For once I agree with them. It’s no secret Apple will continue to dominate the field of consumer electronics for at least couple of years. Some small fry may nibble at the corners but I don’t see any companies making any game changing consumables that are going to push aside the Apple products that we’ve all grown to love. Apple will surely do wonders both for its consumers as well as for its investors.
Here’s some things you might now know:
*Apple products Sold in 100 countries
*Retail Stores Bring In more revenue per square foot than any retailer in history
*Game changing TV launch
*China Mobile Deal - 1 billion customer base
*iTunes revenue growth will countinue to grow rapidly
*Educational systems make switch from text books to tablet
Steve Jobs may be gone but the design team at Apple lives on. This team is responsible for designing everything from the early iMacs to the latest iPads. We will have soon iPhone 5 (2012), iPhone 5S/6 (2013), iPad 3 (2012), iPad 4 (2013) and the much talked about Apple TV or iTV or whatever (late 2012 or early 2013). That’s right...iTV. It’s a big screen Ipad in your living room that will let you watch whatever you want, whenever you want..for free. Why pay for cable anymore? Apple has always captured the market share with its awesome and amazing products. Apple has to achieve a lot of market share. That’s where the growth will come from.
Over the past 10 years, Apple's stock has grown from just $12 per share, to $580 -- giving investors who held the stock an incredible return of 4,500%. If you invested $1,000 in Apple in April 2002, you could potentially cash your shares for $48,333 today. By comparison, if 10 years ago you were to spread a $1,000 investment across the 500 largest companies trading in the U.S. stock market -- which would include companies like Wal-Mart, Exxon, GE, AT&T and others -- you'd end up with just $1,250 today. In 2002, if you had purchased Apple stock instead of putting the same amount of money into a house, you'd have almost $10 million right now. For example, the typical American home cost $228,000 in 2002, according to U.S. census data. With that money, you could have bought 18,704 shares of Apple at their price a decade ago of $12.19 a share. Today, that home is worth $280,000 and that Apple holding is worth $9,969,232. Doh. Oh well. You could have bought $$$MR. MARKET$$$ stocks too.
It’s not too late to own Apple. So what makes Apple so special? How did it grow to become the world's largest and most valuable company? Behind every winning stock is a company with a strong brand image, a lasting competitive advantage, an ever-growing profit and a knack for keeping its shareholders happy for the long haul. The Apple brand has become a household staple with products that can be imitated, but rarely replaced. (Full disclosure, I still use a crackberry, I hate the iPhone touch screen but everybody else seems to love it).
Apple has sold more iOS devices—iTouch, iPhone, and iPad—in 2011 than the entire number of Macs it sold in its 28 years. In less than 2 years, Apple has sold 55 million iPads. It took Apple 22 years to sell 55 million Macs. At their current rate, they are selling 87,000 iPads a day. Similarly, it took Apple 5 years to sell 22 million iPods but just 3 years to sell 22 million iPhones.
Business people are using iPads more than any other device. In other words, the corporate world has finally embraced Apple products as corporate tools. The majority of Apple’s revenue comes from products that didn’t exist a little over 2 years ago. Apple products are nowhere close to market saturation levels.
With all of these great products, we know why AAPL has revenues - but its profit growth comes from the fact that it is a well run company. Apple manages to keep its manufacturing costs low, and always seems to find ways to generate a higher profit for each new product it introduces no matter what the overall economic environment is. They have one of the most efficient and low cost global supply chains, which is why the company enjoys gross margins over 40% across its product lines. Apple's incredible 27% profit margins -- and $33 billion a year profits -- are some of the largest in any industry, so of course investors love this stock. That’s why I love it too.
Why buy now? Any pullback represents a great buying opportunity if you missed the latest run. So here I am.
I am HUGE!!
$$$MR. MARKET$$$
I bought AAPL two years ago:
So I guess it’s time to buy it again. On Thursday, I bought AAPL at 586.04. I will sell it in 4 – 6 weeks at 675.79. Here’s why I like AAPL:
Like all $$$MR. MARKET$$$ stocks, it starts with the chart:
I’ll skip the technical mumbo jumbo but it sure looks like the stock price is consolidating and ready to resume its run. Why will it resume its run?
Because the company makes money…lots of it.
Smartphones have consistently been biting off a greater chunk of the overall market, but they still account for only between 30 percent and 40 percent of all phones sold across the world, however iphones hold only around 9 percent of the global mobile phone market. Talk about opportunity for growth! With a PE of only 14, the stock is not expensive at all. Look at the rest of these stats:
Profit Margin (ttm): 27.13%
Operating Margin (ttm): 35.69%
Return on Assets (ttm): 25.84%
Return on Equity (ttm): 47.10%
Forward P/E (fye Sep 24, 2013): 10.76
PEG Ratio (5 yr expected): 0.57
AAPL is fun to watch when you don’t own it. Then every now and then it’s time to own it. Each time the stock rockets up, I tell Titan Omega to get out and take his profits. Of course then it just goes shooting up again and he exclaims he is smoking drinkin freeing his mind. Then everyone thinks that Greece and Spain are going to make iphone sales go away, and the stock sells off and Titan Omega is all faceful. But if you see through all of this haze and volatility around us, Apple is an amazing company, one that will continue to excel and dominate the technology sector.
Check out Apple’s balance sheet: Apple has ZERO debt and a lot of free cash. This means that if they want to invest in some new technology, company, presidential election, or whatever they want, they can do so. AAPL has 28 billion dollars in cash and zero debt. They could make a lot of their employees really wealthy if they wanted to do so. Most likely, the cash can be used in the future to soften the blows of market downturns or recessions. Apple is not beholden to the short term wooing of Wall Street. They don’t have to worry about solvency. They can be patient and continue to make great business decisions.
Of course they can always use the cash to reward its shareholders with billions of dollars in dividends – looks like they are headed in that direction. Apple has the ability to easily pay an ongoing dividend with a significant yield (2% to 3% range) along with the ability to grow it over time. Defined quarterly dividends would increase the value of the stock in addition to its incredible capital growth. Once they issue a dividend a whole other class of mutual fund and professional managers who have to buy dividend stocks will pile into the stock, providing further upside. They also instituted a $10 billion share-buyback program.
Another HUGE reason to invest in Apple is their past quarter earnings, and the projected earnings for the next two quarters. Their 2nd quarter earnings of 2012 were $12.30 per share. That beat their 3rd quarter earnings in 2011 by 33%. That’s HUGE. Next quarter, they are expected to beat their Q3 2011 earnings by 33%. The company is growing at a rapid pace and investors still love it. When you think about the size of this company and how rapidly it is growing it truly is mind boggling.
The future of Apple depends largely on how well they continue to innovate. I have a good feeling that they already have some awesome products designed and in the pipeline. This will get me my 15% gain in no time.
Investors who also believe that Apple will continue to invent new successful products would see a wonderful investment opportunity at current prices.
Many ANAL-ysts believe that the shares of Apple have huge potential in the coming few years and this is just the beginning. For once I agree with them. It’s no secret Apple will continue to dominate the field of consumer electronics for at least couple of years. Some small fry may nibble at the corners but I don’t see any companies making any game changing consumables that are going to push aside the Apple products that we’ve all grown to love. Apple will surely do wonders both for its consumers as well as for its investors.
Here’s some things you might now know:
*Apple products Sold in 100 countries
*Retail Stores Bring In more revenue per square foot than any retailer in history
*Game changing TV launch
*China Mobile Deal - 1 billion customer base
*iTunes revenue growth will countinue to grow rapidly
*Educational systems make switch from text books to tablet
Steve Jobs may be gone but the design team at Apple lives on. This team is responsible for designing everything from the early iMacs to the latest iPads. We will have soon iPhone 5 (2012), iPhone 5S/6 (2013), iPad 3 (2012), iPad 4 (2013) and the much talked about Apple TV or iTV or whatever (late 2012 or early 2013). That’s right...iTV. It’s a big screen Ipad in your living room that will let you watch whatever you want, whenever you want..for free. Why pay for cable anymore? Apple has always captured the market share with its awesome and amazing products. Apple has to achieve a lot of market share. That’s where the growth will come from.
Over the past 10 years, Apple's stock has grown from just $12 per share, to $580 -- giving investors who held the stock an incredible return of 4,500%. If you invested $1,000 in Apple in April 2002, you could potentially cash your shares for $48,333 today. By comparison, if 10 years ago you were to spread a $1,000 investment across the 500 largest companies trading in the U.S. stock market -- which would include companies like Wal-Mart, Exxon, GE, AT&T and others -- you'd end up with just $1,250 today. In 2002, if you had purchased Apple stock instead of putting the same amount of money into a house, you'd have almost $10 million right now. For example, the typical American home cost $228,000 in 2002, according to U.S. census data. With that money, you could have bought 18,704 shares of Apple at their price a decade ago of $12.19 a share. Today, that home is worth $280,000 and that Apple holding is worth $9,969,232. Doh. Oh well. You could have bought $$$MR. MARKET$$$ stocks too.
It’s not too late to own Apple. So what makes Apple so special? How did it grow to become the world's largest and most valuable company? Behind every winning stock is a company with a strong brand image, a lasting competitive advantage, an ever-growing profit and a knack for keeping its shareholders happy for the long haul. The Apple brand has become a household staple with products that can be imitated, but rarely replaced. (Full disclosure, I still use a crackberry, I hate the iPhone touch screen but everybody else seems to love it).
Apple has sold more iOS devices—iTouch, iPhone, and iPad—in 2011 than the entire number of Macs it sold in its 28 years. In less than 2 years, Apple has sold 55 million iPads. It took Apple 22 years to sell 55 million Macs. At their current rate, they are selling 87,000 iPads a day. Similarly, it took Apple 5 years to sell 22 million iPods but just 3 years to sell 22 million iPhones.
Business people are using iPads more than any other device. In other words, the corporate world has finally embraced Apple products as corporate tools. The majority of Apple’s revenue comes from products that didn’t exist a little over 2 years ago. Apple products are nowhere close to market saturation levels.
With all of these great products, we know why AAPL has revenues - but its profit growth comes from the fact that it is a well run company. Apple manages to keep its manufacturing costs low, and always seems to find ways to generate a higher profit for each new product it introduces no matter what the overall economic environment is. They have one of the most efficient and low cost global supply chains, which is why the company enjoys gross margins over 40% across its product lines. Apple's incredible 27% profit margins -- and $33 billion a year profits -- are some of the largest in any industry, so of course investors love this stock. That’s why I love it too.
Why buy now? Any pullback represents a great buying opportunity if you missed the latest run. So here I am.
I am HUGE!!
$$$MR. MARKET$$$
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