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Apple No Longer Seems Massively Cheap, Even Ex-Cash
- Apple is subjected to negative leverage due to the large cash position on its balance sheet.
- This means that as the stock goes up, its ex-cash valuation goes up even faster.
- Given this effect and how much Apple went up, as well as the nature of the market it relies on for most of its value, Apple no longer seems cheap.
A Tale Of Unbridled Optimism
- There seems to be excessive optimism regarding what Apple's upcoming iWatch can do.
- This is borne by the reaction to my former article. Expectations for the iWatch have gone irrational.
- Excessive optimism is dangerous for the share price.
An iWatch Cannot Move The Needle Much
- There's tremendous expectation regarding the iWatch.
- However, I show that the iWatch cannot move the needle for Apple.
- This is so even if we use rather optimistic assumptions, including making Apple the worldwide leader in the watch space, which is rather unlikely to happen.
Apple Is Acquiring A Fad - Not Quality - And That Is Troubling
- Apple is acquiring Beats for $3.2 billion.
- A check of Beat's history shows it likely that it's mostly just slapping a celebrity name into an OEM product.
- So Apple is buying a fad, not audio quality. Apple could have easily bought audio quality instead, so buying a fad is troubling.
- The acquisition itself is not really material for Apple's prospects, but the decision behind it is troubling and seems to show Apple is on the wrong track.
Apple Faces A Problem And Increasing Prices Will Make It Worse
- Apple is rumored to be asking $100 more for its latest iPhone 6.
- This is a problem, because Apple has lost its ecosystem advantage and its phones are already too expensive.
- While the larger display is welcome, a larger price will make the share problem larger at a point where Android is already dominating.
- There seems to be no way out for Apple. Either it sacrifices margins or volume, and both are bad outcomes.
- Jabil Circuit Implosion Not Negative For Apple
- Apple Faces The Ever-Present 'Then What' Problem
- Another Insane Apple Advantage
- The True Objective Of The iPhone 5C
- Apple's Main Catalyst And Main Risk
- Translating Apple Inc.'s Guidance Into An EPS Number
- What iPhone 5 Discounts Could Mean
- Apple: iOS7 Might Be Another Shot In The Foot
- Apple's Magic Is Broken
- Implications Of Apple Guidance
- Further Signs Of Demand Weakness Now Hit The iPad Mini
- Apple Has No Choice But To Make A Larger iPhone
- The Massive Underperformance Of Apple Vs. Amazon
- Einhorn's Apple Preferred Stock Dividend Solution
- Is Apple The 2000 Cisco/Microsoft Of Today?
- Apple iPhone 5: What Are The Implications From AT&T And Verizon?
- What's Worrisome About Apple
- The Lines Meme Seems Bogus
- The Reason Behind Apple's Beating
- The Unsung Apple Advantage
- Apple's October Sell-Off: Remarkably Similar To Last Time
- Apple: The Executive Wars
- First Indications On Apple's iPad Mini
- How Apple's Size Limits Its Valuation
- Without Steve Jobs, Apple Is Without A Map
- Apple: One More Thing
- Excessive Speculation In Apple Call Options?