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Richard MacDonald
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"Ex-Media Analyst": Rich MacDonald was a leading media analyst for about 15 years for bulge bracket US investment banks and later as a Global Director of Equity Research for a leading Canadian Bank.
My company:
MacDonald Media Analytics
My blog:
MacDonald Media Analytics
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  • Apple Shares (APPL: NASDAQ: $586) Attractively Priced At Current Levels

    Since early October, Apple Inc.'s (OTC:APPL) retrenchment from $705 per share to a current $586 has shaken the faith of many enthusiasts, and in some cases, shaken the enthusiasm for many participants for the market as a whole.

    Based on current consensus estimates, we believe Apple is trading at the low end of its historic range. As you can see from the chart below, Apple P/E ratio on current earnings has declined asymptotically to about 11.6 times.

    At current prices the shares are trading below their mid point p/e for the last two years. They are also trading below the SP 500 market multiple.

    If the shares were to trade at the midpoint of both historic multiples 14.2 times (17.10 median) and median consensus estimates $49.75 upcoming year and and $57.95 for the following, then the shares should trade at between $800 and $850, and offer a +40% return, even before the current $2.65 dividend. So yes the shares look cheap.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AAPL, Media
    Nov 27 4:15 PM | Link | Comment!
  • Why Apple Is The New Microsoft. Investor Caution Warranted
    This morning I hit the seemingly innocuous weekly software update button on an Apple iMac. After disastrous "bad" updates from Apple for Airport and Apple TV devices (rendering them useless) I always read the details on any update. So, today, I clicked "read detail" and saw that the updates were for Safari (Apple's browser) and iTunes. "Restart required". Well, there was no restart. The machine struggle to restart and died.

    Now, why write this complaint to Seeking Alpha? I am an occasional contributor to SA (on) media issues. I have also been Mac Fan from the days I owned an Apple II. Here's the investment issue. The Mac environment has had three attributes which distinguished them from Microsoft: Mac's are easy to learn, easy to use and reliable--both hardware and software. In my humble opinion, I believe that is no longer true. The updates that have killed three devices of mine have clearly been sloppily written and tested and created extraodinary costs in time, lost files and money. Here's the real question: is Apple a mediocre computer company that makes good phones or a phone company that makes poor computers?

    I've read a number of pieces in Seeking Alpha about how everybody loves Apple. It seems to me that investors need to be cautious from here for a couple of reasons. It's sheer size, its deferred tax liability (I will at some point write about thta and company's overseas cash position--when I figure it out.) Most importantly, at a time, when its quality as a maker of easy to use, friendly, reliable computers and devices is deterorating, Apple is in a position of tremendous vulnerability precisely because everybody loves it as an investment vehicle.

    Tags: AAPL, MSFT
    Mar 18 4:07 PM | Link | Comment!
  • FBI opens an investigation into whether News Corp Employees hacked phones of 911
     As momentous as the phone hacking scandal in the UK has been for the News Corp.,  its shareholders and the shareholders of BSkyB, news comes that the FBI has opened an investigation into possible similar hacks into 911 victims. If the Bureau finds any such activities then the risk is that the FCC would be drawn into scrutinizing the suitability of the company to own broadcast licenses. If Mr. Murdoch had knowledge of criminal acts related to any hacking then the broadcast licenses might be subjected to revocation. No criminality has been proved on either side of the Atlantic and we find it difficult to believe that Mr. Murdoch would have been involved. . But if criminal acts occurred in the United States and Mr. Murdoch knew of them, then revocation becomes possible and the damage to the company's asset value would be severe. Mr. Murdoch personally assumed control of the license (and became a US Citizen to do so) when the company acquired what are now the Fox TV stations. Again we do not believe he was involved--but we don't know that he was not either but this is added uncertainty to the weight on the shares already.  We still see no upside in the shares as the investigations on both sides of the Atlantic take place and resolve the comapny's management and Mr. Murdoch personally. 
    Jul 14 3:57 PM | Link | Comment!
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