Seeking Alpha

David Addison's  Instablog

David Addison
Send Message
I am a value investor with a bent for quantitative analysis. What began as an inconspicuous post-college job became an unintended odyssey into the 'rabbit hole' of quantitative finance. I began as a floor clerk on the CME/CBOT floor in Chicago. It was a pretty simple job running around pieces... More
My blog:
The World Is
View David Addison's Instablogs on:
  • I Bought Apple Today

    I finally broke down and bought a share of AAPL today. It closed near where it opened; down 5.48% today after the unveiling of iPhone 5C and 5S.

    I think that the market is incorrectly interpreting iPhone 5C's expensive price tag (though quite a bit less than the 5S) incorrectly. Apple (the company) is playing to its strong suit of high-margin products, not market share. With their steadily increasing book value, solid (albeit shrinking) margins, and their immense and growing cash pile, I think Apple's managers are well-positioned to play by their own rules, which should eventually reflect in AAPL (the stock's) market valuation. Although history shows that cash flows today are more valuable than speculative growth that may or may never come to fruition, I believe AAPL's modest P/E shows that the market may be discounting potential revenue growth from China, AppleTV, or even an iWatch. This all combined made today's dip an irresistible impulse buying opportunity for me.

    Here are some 10-year graphs to make my points more clear*.

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    Data provided courtesy of MSN Money

    Admittedly, I had to bypass some of my investing principles in order to hit the 'buy' button on my computer screen. But heck, there's never been a twelve-month stretch where AAPL was cheaper! I intend to hold AAPL for more than 3 months but less than eternity, so we'll just see what happens...

    DISCLAIMER: I do not own an iPhone nor do I intend to initiate such a purchase within the near future.

    Disclosure: I am long AAPL.

    Tags: AAPL
    Sep 27 1:24 AM | Link | Comment!
Full index of posts »
Latest Followers


More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.