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  • Apple Is Still a Great Investment, Right? Not for Value Investors [View article]
    AAPL is probably a good investment, but it is not arguably a value play.

    Non-GAAP is only useful for evaluating operations of rapidly growing small companies that have a high proportion of stock-based compensation; do you think S Jobs is going to magically give that cash or dilution back to you? sometimes you can remove a one-time cost, but it is generally meaningless on a company this big; those expenses are removed from your pocket forever, period. AAPL will probably not sell enough iphones to reach a 16 PEx at this valuation; therefore, you are counting on dividends and share buybacks only (which may wind up being great, but that is a different subject).

    good example is CSCO. billions of earnings year after year, but unless you are TRADING the ups and downs you have never made a dime on the stock b/c it was valued so high relative to earnings that it could never catch up; no dividends, limited share buybacks, you have great financial statements and no return for the shareholder who got in late.

    because phone companies must defer revs, cash flow is the only way to evaluate them. earnings will increase as sales are recognized, but the sale and cash are ancient history. AAPL is an excellent co and i wish i had bought the stock when it was a value play
    Aug 14, 2009. 05:46 PM | 4 Likes Like |Link to Comment
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