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Apple Inc. Message Board

  • rjmcbear rjmcbear May 2, 2013 11:11 AM Flag

    Don't overlook the fact that flash memory prices have fallen recently

    Flask memory is a major component of all of Apples products. iPhones, iPads, iPods, and even its laptop have all-flash memory. With price reduction in this area margins will improve and so will profits add the buyback of stock, increased dividend and new products on the horizon and Apple is a screaming buy. $600 by year end is well within reach so hang in there longs.

    Sentiment: Strong Buy

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    • Flash memory has been a major profit center for Apple all along. However the price difference is almost insignifigant as Apple has been paying very little for the memory. So little that it is no longer one of the more valuable component costs. Very little effect to increase their PM

      • 1 Reply to waldo.ferris
      • I have to disagree and recently Dan Niles of AlphaOne Hedge fund, who was formerly bearish on Apple told CNBC that he has been buying shares and now has a full position. This is what he said in the interview, "We started buying AAPL stock the day before they reported, and we bought the next three days, bringing us to a full position. It really comes down to, as you pointed out, look at U.S. Treasuries, offering 1.6%, and with Apple, they’re going to return, between dividends and stock buyback, upward of 7% per year. Estimates have gotten cut in half.
        "So, unlike a year ago, you have gone ahead and reset that, and there are potentially positive catalysts with the Worldwide Developers Conference on June 10th. Also, on margin, commodity prices, DRAM and flash, are starting to come down again. Those were going up in Q4, which a lot of people chose to ignore. Flash is a big component in their cost structure, that’s going to help them a lot. A lot of great investments start out as trades.

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