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Interested in stock markets, how companies are valued, and why share prices move (or don't).
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  • Apple Seems Like A Buy To Me

    Disclaimer: This is for the sole purpose of my education. I write this to keep track of my opinions and not to change them in hindsight.

    It is a humbling experience to look back and read black on white one's own words on a topic he was wrong about. An opportunity to learn, too.

    Apple (NASDAQ:AAPL) is on a sustained free fall since September 2012. Its 52 weeks range is 705.07 - 385.10.

    My personal opinion on this is that it will go up in a year span to at least the $700, and hysteresis obliges, go past that, maybe mid $700 or even the $800 since many people would want to ride that, and the go down and settle.

    If you're interested in capital gains.

    Apple builds products that form an ecosystem and has a gazillion fanboys that would defend it claw and teeth. It's not tomorrow that your average iPhone/iPad/Mac user will switch. They wont. They'll still keep using iTunes and all these things built to keep a customer.

    Apple reportedly had record high earnings from iTunes in Q2 (I think $4.1 billions).

    It has a PE ratio of 10.4 and PEG ratio of 0.71. This makes it very attractive.

    It has an ROCI (return on capital invested) of 29.3% which is pretty good (this is the same figure for ROE).

    Its Dividend Yield is 2.8% and it does that with a Dividend Payout Ratio of only 6%.

    Cash Flow is growing in the last five years. As so does the Book Value. Results are consistent.

    ROCI and ROA are increasing every year (for the last five years).

    Debt is decreasing every year (almost) and they seem to have it under control.

    I'll throw a number and say that one can make a decent 40% return on AAPL. (I love to throw numbers like that).

    PS: If you disagree with me, I would love to hear your opinion on this. I am a beginner and I might not be seeing the big picture here. Thanks.

    Tags: AAPL
    Jul 04 11:23 PM | Link | Comment!

    About 8 minutes until opening. Yesterday, I noticed an interesting stock. Oracle (NYSE:ORCL). It went down Friday (21st) and it closed yesterday at $30.14.

    I looked into it, an it seems to be pretty low for a company like Oracle.

    PE Ratio : 16.

    Dividend Payout Ratio = 12%.

    Return on Equity (ROE) = 24.4% (This is very decent).

    Return on Capital Invested (ROCI) = 17.1%

    And relatively low debt

    Leverage Ratio (Assets/Equity) = 1.8

    LT Debt/Total Capital = 30%

    Now, maybe it's not paying high dividends (Yield = 0.7%) but I think it will go higher. Yesterday was the lowest in 6 months, and it's a pretty solid company in my opinion.

    I don't have any stake in this company, I am doing this to keep track (Virtual Stock Exchange in Marketwatch). I bought a couple of thousand shares yesterday and I'm waiting to see what they do.

    If I am mistaken, there is no risk I will forget about it, so I can learn and see where I went wrong.

    Verba volant, scripta manent.

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

    Additional disclosure: I am doing this for my education to keep track on why I thought what I thought.

    Tags: ORCL, Oracle
    Jun 27 9:49 AM | Link | Comment!
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