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Stephen Rosenman enjoys analyzing the financial health of companies and pointing out areas the market is either not recognizing or ignoring. A long time investor, I put my money where my mouth is. That's why I'm passionate about my positions. I trumpet companies I believe in and back my articles... More
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Stephen Rosenman
  • How Did 2009 Apple Predictions Do? 0 comments
    Feb 1, 2010 11:47 AM | about stocks: AAPL

    January 4 of last year, I made several predictions about Apple. (
    1. Apple's cash would continue to follow a steep curve up.  That trend has continued.  In fact, its cash position has uncannily continued the steep plot line I drew last year.
    If Apple continues its current path, cash will reach $50 billion in 2011 and $70 billion in 2012, an extraordinary feat.  Last year, when the stock was trading in the 80s, I wondered when the market would realize how undervalued Apple was.  It still is. The cash thrown off each year is incredible.  Six billion dollars alone over the last quarter.  Eleven billion over the last year.  The story is not so much the cash position as the ability to generate cash.
    2. I postulated that non-GAAP earnings would be the big story.  Indeed, Apple succeeded in getting the FASB to change the rules of accounting for smart phones. Now non-GAAP earnings have become the only story.  The change gives investors transparency in evaluating Apple's earnings.  The previous high PE of 33 is torn down.  In its place, we get a PE of 18 that actually reflects Apple's iPhone sales.
    3. I predicted Steve Jobs would host January's investor meeting.  Unfortunately, the conference I forecast he would attend was January 2009.  Jobs missed that event of course, taking a leave of absence. He did lead the iPad launch January 2010.  (After all, what's a year? At least I got the month right.)
    4. And, finally, I argued the stock would have a major move up.

    As for more predictions: 
    1. Apple heaps on more cash.
    2. Earnings soar.
    3. Steve continues leading product rollouts (Januarys).
    4. Cash generation and climbing earnings convince investors to buy the stock.

    Disclosure: long AAPL

    Stocks: AAPL
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