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Apple Inc. Message Board

  • calls_them_as_i_see_them calls_them_as_i_see_them Mar 1, 2013 8:25 PM Flag

    Doom And Gloom Technicals..Upbeat Fundamentals

    André J. Bakhos, director of market analysis with New York-based Lek Securities, offers up some negative-sounding technicals:
    The Apple chart never triggered positively with our work since the turndown; now, the relief rally failed and more doom and gloom appear likely. I present the weekly chart first, followed by the daily. The 50-w SMA is beginning a down slope. I could not pluck a positive out of this chart even if I were paid to do so. The daily chart broke the last low of 435 today on a gap down. We are now in the up gap of January 25, 2012. The next key level is 425—and how AAPL trades, that could be in minutes. Not a promising chart.
    On the other, Laurence Isaac Balter of Oracle Investment Research, who has a Strong Buy on the stock and thinks it's worth $670, observes that Apple executives must buy three times their salary in stock, and that raising the dividend would be a great way for those executives to pay the bank loan interest of 4% to 5% to purchase the shares. From that he deduces the following:
    Although we are not privy to details, we imagine that a market interest rate loan of 4-5% for an executive to buy 3x their salary in stock is a great deal. But how does one pay the interest on such a loan? The dividend of course. Should Apple increase their pay out to the average S&P 500 ratio of 34%, this would equate to ~$14-15 Billion in annual dividends. A back of the napkin calculation leads us to assign an average S&P dividend multiple (2.2%/$14B= $636B). Throw in some new products, a refresh cycle and we easily get to a $670 target price.
    Balter also offers the following Apple factoids he's come up with:
    Of the $858 Billion in Earnings generated by the S&P 500, Apple generates 4.7% of the total.
    Of the $975 Billion in Free Cash Flow generated by the S&P 500, Apple generates 4.3%.
    Of the $283 Billion in total dividends paid by the S&P 500, Apple share is 3.5%.
    Of the $1500 Billion sitting in cash of the S&P 500, Apple has 9.1% of the total.
    Apple pays

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