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Bachar Samawi  

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  • Shutdown Impact On Buffett Top Holding IBM [View article]
    It is highly unlikely that a $12.2 billion investment does not have his nod....
    Oct 10, 2013. 11:55 AM | 2 Likes Like |Link to Comment
  • Apple: The Truth Shall Set You Free [View article]
    Bears consider Apple a typical technology stock, despite the evidence proving otherwise. Apple is not a typical technology stock, whereby temporary euphoria is ultimately replaced by outdated technology.

    Apple has been around for over 3 decades so far, and has continuously made other companies' technology outdated. Such evidence should provide Apple a higher price/earning ratio than about 7.5 on a forward basis once you exclude cash and long term investments. If the mentality changes, Apple shares can leap higher strictly from price/earning valuation basis, putting aside potential for higher revenues....
    Oct 9, 2013. 03:57 AM | 10 Likes Like |Link to Comment
  • Consider Apple Supplier ARM And Hedge [View article]
    Thank you for your comments Yaron. The stock is trading where it is trading based on the belief that future revenues will be substantially higher. Hence, future revenues are expected to show substantial growth vs. past revenues in part due to migration to 64 bit architecture... The strategy described, by buying puts on a 2 to 1 ratio vs. the underlying, does allow for making money in case everyone is wrong and there is a substantial move to the downside....

    Please do note that I am not saying that it is irrational at these prices. Being exuberant does not mean irrationally exuberant. Irrational can only be determined in hindsight....
    Oct 8, 2013. 07:37 PM | 1 Like Like |Link to Comment
  • Apple At $800: Flight Delay Or Cancellation? [View article]
    During the past 30 years, Apple has had the track record of repeatedly introducing captivating products: the Mac, the iPod, the iPhone, the iPad, iTunes, etc...

    As opposed to other technology companies that come and go, Apple has shown staying power. Yet, from a financial ratio perspective it is traded as if it is the new kid around the block that needs to prove himself. At the same time, when in its history it did stumble more than 20 years ago, it resurrected itself and came back even stronger...

    5 years is a long time in technology. Apple has shown that 5 years is a short time for Apple.
    Oct 8, 2013. 09:59 AM | Likes Like |Link to Comment
  • Consider Apple Supplier ARM And Hedge [View article]
    Thank you Michael for your comment.

    As in the previous article I published discussing exuberance, I do agree that based on valuations, there seems to be exuberance in ARM . On the other hand, whether it is irrational or not can only be determined in hindsight, and such exuberance may build further on itself. Meanwhile, the Macro and seasonal environment is constructive...
    Oct 8, 2013. 09:37 AM | 2 Likes Like |Link to Comment
  • How To Profit From Tesla, Amazon And Netflix Stock Exuberance [View article]
    With a price of $117.76, the 150 puts would be $32.24 in the money (150-117.76) x 2 puts = $64.48 ; that's the benefit

    Meanwhile, cost of the 2 puts is $17 x 2 = $34 while the cost of the call is $30.48. Hence, total premiums paid is $34+$30.48 = $64.48 ; that's the cost

    The break-even is where the cost = the benefit
    Oct 7, 2013. 04:04 PM | Likes Like |Link to Comment
  • How To Profit From Tesla, Amazon And Netflix Stock Exuberance [View article]
    Thank you for your comment Adam. You make a good point. However, I do have a very strong opinion that there is a very high likelihood that such stocks will exhibit substantial moves due to the exuberance they are experiencing.

    Furthermore, the risk that an investor could be taking by going long in case of irrational exuberance, or by going short in case such exuberance is not irrational, could be substantially higher than the proposed strategy.

    Naturally, if an investor cannot afford the risk, then they should avoid the strategy, as they should probably also avoid either being long or short the stocks on an outright position. In other words, they should avoid these stocks all together.
    Oct 7, 2013. 12:46 PM | Likes Like |Link to Comment
  • Apple At $800: Flight Delay Or Cancellation? [View article]
    Thank you for your accurate reply strozzi
    Oct 7, 2013. 11:52 AM | 3 Likes Like |Link to Comment
  • How To Profit From Tesla, Amazon And Netflix Stock Exuberance [View article]
    yes thank you.... we will submit a correction as 2012 should have been 2013 as with the other 4 instances...
    Oct 7, 2013. 08:59 AM | Likes Like |Link to Comment
  • Microsoft Should Consider Acquiring BlackBerry [View article]
    What should have happened is that Apple should have bought Blackberry in early 2012 as per our article 'Apple and Blackberry: $16 billion or fruit salad?'

    And Apple should have saved Blackberry as per suggested strategy, hence also benefiting from potential share price appreciation, while gaining exposure to lower priced phones without necessarily affecting the Apple status and cannibalizing....
    Oct 7, 2013. 05:41 AM | 6 Likes Like |Link to Comment
  • Is It Time To Sell These 4 Financial Stocks ? [View article]
    Thank you for your comment vireoman. Certainly, past performance is not an indication of future performance. Several additional factors were considered, including increasing P/E ratio, increasing Price/Book ratio, potential fed tapering, etc...

    At the same time, from my 26 year trading experience, I have learned not to ignore seasonal factors from a short term perspective. These same factors were taken into consideration when we recommended buying these shares, and it is never wrong to book profits of between 40% and 65% achieved in about one year.

    Even if these shares continue higher during the next month, we feel it is better to book such hefty profits given the risks we stated, rather than take the risk of letting ride further... You will note we did not suggest shorting these shares....
    Oct 5, 2013. 02:24 AM | Likes Like |Link to Comment
  • Is It Time To Sell LinkedIn And Buy Facebook? [View article]
    Thank you for your comment whomanrunning. That would imply a market cap of $ 375 billion to $500 billion. In such territory, as we experienced with Apple, you face serious capitalization hurdles, which typically would ultimately pressure the P/E ratio. It is certainly possible, depending on where net revenues come in during the next year, but once you get past $250 billion market cap, for a technology/media company, it gets really tough....
    Sep 30, 2013. 09:48 AM | Likes Like |Link to Comment
  • Facebook Home - What It Means For Apple, Google, And Microsoft [View article]
    Facebook Home at the end of the day is nothing but a glorified App.

    The whole marketing gimmick of "people centric" vs. "app centric" is actually a marketing fad with limited longevity.

    Facebook in essence simply made sure that its App, called Home, captures the most real estate space on the screen by automatically loading as the front screen for your phone.

    This can easily be replicated by others, such as a potential "Twitter Home", "Linkedin Home", "Google Home", "Yahoo Home" etc....

    These "Homes" will actually validate Apple's decade old vision of the importance of an ecosystem. Facebook has renamed the word "ecosystem" to the word "home". When all is said and done, such renamed Facebook ecosystem will prove to be quite shy of the advantages of Apple's ecosystem.

    Most importantly, such "Homes", will outline the importance of ecosystems, and when users learn the value of an ecosystem, and ultimately compare different ecosystems, they will realize the allure and advantage of Apple's ecosystem. Hence, this could inadvertently cause more users to convert to Apple, while it will limit Google's ability to derive much benefit of its own Android operating system.
    Apr 7, 2013. 06:29 AM | 4 Likes Like |Link to Comment
  • Apple Could Take Another Beating [View article]
    They typically keep most such cash in short dated securities such as government T-bills and other high rated liquid securities, as well as investments.

    As per last balance sheet, they had $16 bil in cash and cash equivalents, $23.7 bil in short term investments and $97.3 bil in long term investments. Since then, they have accumulated additional profits, hence probably raising each such category higher....
    Apr 4, 2013. 03:30 AM | 1 Like Like |Link to Comment
  • Apple Could Take Another Beating [View article]
    In the long run, valuations always matter. Furthermore, Apple's cash at this point is probably close to $150 billion, and when such cash is excluded, Apple's PE ratio is between 5 and 6. What does that mean? It means that if Apple's earnings expected for this year stay the same for the next 5 to 6 years, in 5 to 6 years, with Apple's existing cash, it would have generated as much as its current market cap.

    Many seem to forget that the reason Apple traded at 12 PE ratio and not 14 PE ratio despite its above average growth was due to the fact that analysts were expecting such growth to slow. In other words, at its previous 12 PE ratio, Apple's price had already taken into consideration the risk of a slow down in net revenue growth...

    The bottom line line is as follows: with interest rates at 0, and even negative, and your money not even safe in a bank as we saw in Cyprus, would you invest it in a company which within 5 to 6 years will have as much cash generation as its Market Cap?

    For me the answer is an absolute YES. As a matter of a fact, I would even do so even if it took as much as 10 years, which would imply 10% return on my capital...

    You are right that theoretically, Apple can go lower. However, such direction would be slow and grinding. At the same time, the stock can also double in a very short time, when investors realize that valuation is indeed extremely attractive....
    Apr 3, 2013. 07:02 AM | 39 Likes Like |Link to Comment