Seeking Alpha

Amir Houriani

View as an RSS Feed
View Amir Houriani's Comments BY TICKER:
Latest  |  Highest rated
  • Cisco Shares: Extremely High Chance Of Being Undervalued [View article]
    Thank you for taking the time to read it!
    Jan 13 02:13 PM | Likes Like |Link to Comment
  • Cisco Shares: Extremely High Chance Of Being Undervalued [View article]
    Thank you for the compliments. I tried breaking down the analysis to be as simple as possible, but can definitely understand why it's still difficult to digest.
    Jan 13 01:05 PM | Likes Like |Link to Comment
  • Google Is Way Overpriced, Trading At 51 Times Forward Free Cash Flow [View article]
    You're completely right. It's incorrect to use the total "investing cash flows" figure to calculate your free cash flow. Just need to take the "Investments in Property, Plant, Equipment", "Capital Expenditures", and/or "Acquisitions" amount.
    Dec 27 04:03 PM | Likes Like |Link to Comment
  • Does Exact Sciences' $1B Valuation Foreshadow A Bright Future For TrovaGene? [View article]
    Daniel, you need to learn how to respect your readers. I was appalled by your sheer level of disrespect.
    Aug 30 02:49 PM | 2 Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    okpj,

    To say Apple isn't vulnerable to swaying consumer sentiment is a bit extreme. It's true that Blackberry's revenue driver was through its mobile sales, and it's also true that Apple has a more diversified product offering; however, Apple's iPhone and iPad sales significantly outweigh its other product sales.

    Apple's iPhone and iPad are still in very high demand, even amid intense competition. Blackberry, on the other hand, was quickly overthrown by Apple's iPhone, whereas, Apple is still maintaining its stronghold on the market even amid such competition.

    I feel confident in saying that I don't believe Apple will follow the same fate blackberry has; however, Apple must introduce a low-cost iPhone (for developing markets) and a larger screen iPhone (to compete more aggressively with Samsung). Furthermore, I believe Apple should introduce yet another iPhone, priced at $1000+ to attract the very high end, niche market.

    Apple also needs to innovate. The way in which television and movies are done now are ancient, which is why issues like piracy are rampant. It's very apparent that something is wrong with the system, which is where Apple can come into play. Their iTunes platform can be instrumental in developing a pay-per-channel type service, and also to stream movies through.
    Aug 24 09:18 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Skippy,

    That's actually correct. With the sheer amount of money Apple is employing for these buybacks, they're buying their shares in huge bulks (likely at market spot rates), which helps them increase the cost effectiveness of their buyback program.

    Thank you for reading the article! Glad you liked it
    Aug 23 12:27 AM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    The method I outlined is like a commodity with an increasing marginal cost of production. In this case, our commodity is Apple's outstanding shares. As Apple continues to buy back their shares, the price (cost) continues to rise, making each new "extraction" progressively more expensive.
    Aug 22 01:25 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Thank you very much. I tried my best to make this article as unbiased and logical as possible.
    Aug 22 04:34 AM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Well, the only caveat of this article is it implies that will have to ramp up its buyback program more aggressively. The $17 billion debt issuance back in May was great, but they need to start issuing debt and buying back their stock much more aggressively.
    Aug 21 04:26 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    That's what I'm here for. To provide the best possible information so you can make informed decisions. Thank you for reading my long-winded article.
    Aug 21 03:59 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Typically, costs go down as manufacturing ramps up, but after a certain point, the costs start increasing again when cost effectiveness disappears.

    I outlined 3 scenarios in which cost efficiencies are increasing, staying fixed, then decreasing. We utilized the concept of declines in marginal returns which fit the situation I was describing with Apple's buyback program.

    For every share Apple buys back, they push up the prices of the remaining shares, which decreases the cost effectiveness of their buyback program.
    Aug 21 03:55 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Apple has chosen to issue debt because they're situated to utilize that debt more effectively
    Aug 21 03:50 PM | Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    The basis is this:
    1) Keep a constant market cap
    2) Have fewer outstanding shares because of the buybacks
    3) Higher price/share because each outstanding share is worth more now

    I'm sorry you feel this is "disingenuous or just plaint defective", but based on the model I made, I tried minimizing as many variables to solely isolate the effects from the buyback program. Ultimately, assumptions had to be made in order to progress with the analysis. I believe the assumptions I have made are fair and valid.
    Aug 21 12:17 PM | 3 Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    The analysis implies that nothing will change in regards to Apple's future expectations of cash flows. In this analysis, I've kept that at a constant to simply analyze the effects of the buyback program.

    There is room for expanding cash flows via generating new revenue lines, like with the introduction of an iTV, iWatch, etc. which will increase the bottom line. With China Telecom posting faster-than-expected rise in profits due to the iPhone, it will become more likely that China Mobile will adopt the iPhone as well, integrating Apple into China's largest mobile provider. Furthermore, reports of a low-cost iPhone are building up, which will give Apple a much needed edge in developing markets.

    It's nothing new that Apple is facing tough competition, which has led to margin contraction and flat year-over-year revenue growth. Analysts have already built that reality in their models, which is why price targets have dropped across the board.

    This article solely serves to analyze the buyback program and its effects on Apple's stock, and does not serve to project Apple's future profitability.
    Aug 21 06:40 AM | 9 Likes Like |Link to Comment
  • Apple's Buyback Program: Value Destroying And Value Retaining [View article]
    Thank you jbcm! I appreciate your feedback and hope I conveyed new and valuable information to you
    Aug 21 06:22 AM | 1 Like Like |Link to Comment
COMMENTS STATS
226 Comments
178 Likes