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Apple Inc. Message Board

  • buffett100127 buffett100127 Jan 24, 2013 1:24 AM Flag

    5% drop justified not 10% drop

    I have a feeling we close in the $485-$490 range. We may gap down initially to $450-$460 as weak hands sell off but we should trend up through the day as buyers step back in.

    The earnings report was decent. What killed them was no guidance for EPS. $137 billion in cash is huge and now represents about 30% of their market cap. If YOY earnings do not grow at all and stay constant from here on out this would still be a good buy. Ex cash that would come out to an earnings yield of 13.33%. For a MegaCap company a 13.33% earnings yield is not bad. I think the company needs to buyback at prices above 8 x forward earnings (forward earnings at $56.59 x 8 = $452.72. We are trading at valuations significantly below MSFT. That is sad.

    Sentiment: Buy

117.65+1.05(+0.90%)Oct 24 4:00 PMEDT