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richbar

richbar
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  • Apple: Does The Party End In 2015? [View article]
    Good article Alex. The debate between you and MB should be settled by the second half of 2015.

    A few words about your price target of $165. I assume that's a one year target. Assuming buybacks will reduce the share count to 5.7 B at that time, the market cap would be $940 B if the price reached $165. That would imply an annual earnings stream of over $80 B ad infinitum using DCF analysis. But Apple's earnings stream over the past 3 years has only been around $40 B. ($41.3 B in 2012, $36.6 B in 2013, and $39.4 B in 2014). It should surpass 2012's record in 2015, but I don't see how earnings are going to double from the current level.
    Dec 18, 2014. 10:47 AM | 1 Like Like |Link to Comment
  • Buy Signals Triggered Today In Apple [View article]
    I have to admit that I expected a continuing runup through the earnings report in late January and overstayed the party. I attribute the current weakness to expectations that after the current quarter, growth estimates will be lowered.
    Dec 17, 2014. 10:17 AM | Likes Like |Link to Comment
  • Update: American Capital Agency Declares Its Latest Dividend - Why I'm A Buyer Here [View article]
    There really is no analysis at all in this article. AGNC has lately been down for a reason. There is no discussion of why. The dividend and book value news (which I knew before reading this article) has been good, so the stock should be up - no?

    I've been long the stock for some time and write calls to generate additional income. But I'm uneasy why it has been so weak lately. The decline in the 10 year has no doubt increased book value since 11/30. The news has been good. So why the decline?

    My feeling is that the Fed will probably hike short term rates in mid 2015 since lower oil prices will provide a huge stimulus to the economy. But long term rates are likely to remain low - around 2% for the 10 year, since low oil prices are deflationary. This will squeeze AGNC's spread income and probably lead to dividend cut in the second half of 2015.

    It is more important to focus on the future rather than laud the current situation.
    Dec 16, 2014. 02:55 PM | 1 Like Like |Link to Comment
  • Time To Eat Your Apple Pie [View article]
    Time will tell if MB is right. It should be evident by the second half of 2015.
    Dec 15, 2014. 10:41 PM | 3 Likes Like |Link to Comment
  • Apple: A Pullback To Strongly Consider [View article]
    Bill, the error being made by most analysts is extrapolating the high YOY growth expected for the current quarter to a long term growth rate. It will be nowhere near 20%. Ultimately, annual EPS growth will only be around 6%, with half of this coming from buybacks. So with organic growth of only 3%, a low P/E multiple is warranted.
    Dec 15, 2014. 09:38 AM | 1 Like Like |Link to Comment
  • What's Driving Our $120 Price Estimate For Apple? [View article]
    It could be at 104 by mid to late 2015 as it becomes obvious that revenue and earnings (not EPS) growth has slowed to mid single digit.
    Dec 11, 2014. 10:01 AM | 2 Likes Like |Link to Comment
  • Why I Hate Apple [View article]
    Larry, what you're missing is believing analysts' 5-year consensus EPS growth rate of 11.5%. It may very well exceed 11.5% for 2015, but in the long term it's going to be mid single digit. About 3% from share buybacks and another 3% from organic growth. So about 6% overall, half of what analysts project.
    Dec 7, 2014. 09:51 AM | Likes Like |Link to Comment
  • Why I Hate Apple [View article]
    What you're missing is believing the analysts' 5-year consensus EPS growth rate of 11.5%. It may very well exceed 11.5% for 2015, but in the long term it's going to be mid single digit. About 3% from share buybacks and another 3% from organic growth. So about 6% overall, half of what analysts project.
    Dec 7, 2014. 09:49 AM | Likes Like |Link to Comment
  • Apple: Kantar's Data Points To A Huge December Quarter [View article]
    Good analysis Mark. I just wanted to note a typo in the "Stunning Results" section. Q1 revenues should be $68.1 B (i.e., the value in your table), not $65 B.
    Dec 4, 2014. 04:57 PM | Likes Like |Link to Comment
  • Apple's Recent Pullback A Buy Opportunity [View article]
    It will take several more quarters to see that Apple's revenue and earnings growth are well below current consensus projections. I see a correction to a market cap of $550-600 billion in the second half of 2015. That would put the stock in the $95-100 range.
    Dec 3, 2014. 10:05 AM | Likes Like |Link to Comment
  • FY2015: Apple's Big Adventure [View article]
    FY2015 revenue of $225B and EPS of $8.25. Really? These would represent increases of 23% and 28% respectively over FY2014 numbers. Your revenue estimate is higher than the highest estimate of the 43 analysts surveyed by Morningstar.
    Dec 2, 2014. 09:04 PM | Likes Like |Link to Comment
  • Why Estimates Of A 1 Trillion Market Cap For Apple Are Still Far-Fetched: Fundamental And Algorithmic Analysis [View article]
    See my comment below. Unless they can double their earnings to $80 billion annually and stay there consistently, they won't get to a $1 trillion market cap.
    Dec 2, 2014. 07:32 PM | Likes Like |Link to Comment
  • Why Estimates Of A 1 Trillion Market Cap For Apple Are Still Far-Fetched: Fundamental And Algorithmic Analysis [View article]
    Forget algorithmic analysis. The four quarterly revenue plots each clearly show typical "S" curve flattening. Q4 revenues will be stuck in the low to mid $60 billions, Q1 in the low $50 billions, and Q2/Q3 each in the low $40 billions. Add these up and you get $200-210 billion. Net income will be in the low $40 billions for this level of revenues. The present value of this earnings stream assuming they can consistently achieve it, is $400-450 billion. Add repatriated current cash less debt of $100 billion and you get $550 billion. This is what Apple is worth. At today's market cap of close to $700 billion, it is woefully overpriced. A market cap of $1 trillion is clearly not in the offing.
    Dec 2, 2014. 04:17 PM | 2 Likes Like |Link to Comment
  • Apple lower following cautious Pac Crest, Deutsche notes [View news story]
    Pac Crest has got it right.
    Dec 2, 2014. 01:35 PM | 1 Like Like |Link to Comment
  • Apple: How Realistic Is A $1 Trillion Market Cap? [View article]
    I currently value Apple at $500-550 billion as follows: $400 billion from a future earnings stream of $40-45 billion annually plus $100 billion from the current value of repatriated cash less debt. The market values Apple at $700 billion, expecting the earnings stream to grow to $60 billion annually and stay there. So there is overvaluation in my opinion, yet the overvaluation can continue to grow. I can't see a $1 trillion market cap unless they create substantial new markets beyond what they have created this year, as revenues and earnings would have to double from their current level.
    Dec 1, 2014. 08:59 PM | 1 Like Like |Link to Comment
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