Sajal

Is Apple Stuck in a Trading Range?

@Stephen, I agree with you. This argument would have been even more persuasive at 200. But between 60 and 200 is where I see Apple for the next few years, or stuck in a range. You could have made the same argument for Microsoft anytime since 1998 and still been correct.

Look at Microsoft. The stock is where it was in 1998 (buy and hold). Net income in the meantime has gone up 400%, from 4.5 Billion to 18 billion. Apple could also quadruple it's net income without the stock going anywhere over the next few YEARS. That's the kind of growth to value stock transition I'm talking of.

I looked at www.indexarb.com/index.... Out of the 20 largest S&P 500 companies, the only ones not paying a dividend are Google and Apple. There’s a good reason for this.

@Mac'em X. Thanks for your valuable feedback. Yes, I think that number was changed. But still, 5.4 trillion is HUGE. I guess as far what is priced in or not is a matter of opinion!

Contrarian Pick: Flash Memory Vendors

Antoine Gerard: Thanks for the link.

I agree timing the business cycle is a difficult exercise. But I can say with certainty that two years from now most of these companies would be trading at higher valuations. MU for instance.. I see a downside of say 5, and an upside of 15+.. that's an attractive risk-reward tradeoff.

RB9652: That's an interesting trade. Except STX and WDC trade
at really low multiples. Mr. Market may be pricing a bit of that already.
Also, there's nothing stopping STX from getting into the SSD business. I believe STX has a fair amount of patents in the drive industry which they intend to use aggressively.
Refer to
arstechnica.com/news.a...
and
arstechnica.com/news.a...

omitsure, I think you'll find that with M&A activity, more companies would be collaborating on the R&D expenses in developing newer process fabs. It's already happening on the PC side with the IBM led consortium. Mergers are the only way to reduce supply and increase pricing power.