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  • Apple: Foxconn Data Is Not A False Positive [View article]
    Interesting comment string. Both Mark and Alex are very good analysts. Let's see what Apple reports in January before settling this dispute.

    I, like most analysts, expect that 2016 will be a year of mid single digit revenue growth, with EPS being helped an equivalent amount by continuing buybacks. An upward 10% move in the stock price from here seems reasonable to me, but one-year projections of $150-200 are way too optimistic. Maybe 5 years from now when they have bought back a ton more stock, but not in the near future. For example, if they reduce share count 5% annually, they would increase the stock price 28% in 5 years, everything else being equal. Growth would add to this percentage, and a 50% increase in the stock price in 5-years would be doable. But not next year. Incidentally, the market cap would only increase about half the percentage increase in the stock price, making Apple an $800 billion company. Still short of the $1 trillion target that some seem to think will happen.
    Nov 28, 2015. 10:56 AM | 2 Likes Like |Link to Comment
  • Gilead Sciences Stock Forecast For 2016 [View article]
    Huge growth opportunities? Analysts expect no growth over the next 2 years. That justifies the low P/E.
    Nov 25, 2015. 10:50 PM | 10 Likes Like |Link to Comment
  • Next Quarter Could Be A Back-Breaking Event For Apple Shareholders [View article]
    First, to the many commenters who post abusive comments that are deleted and wonder why they are being "censored". Differing points of view are always tolerated. Abuse is not. Abuse could be a personal attack, abusive language, or a blanket dismissal of someone's thinking to name a few examples. Click on "report abuse" to see all the examples. That's why you're deleted.

    Unfortunately, SA doesn't screen comments. They rely on others to report abuse. I wish they did screen so that they could be elevated to be a true forum for mature discussions of issues, rather than the childish poster board seen in so many comment strings on bearish articles on Apple.

    Now for my views on Apple. I have no idea how their iphone sales are going. I'll stick with analysts' concensus of around 5% annual revenue growth for 2016 and 2017. With buybacks, EPS and the stock price should move up 7-10% or so annually. Together with the dividend, that makes it an OK investment. But a $163 price target? That's not reasonable unless growth is substantially greater. I put no faith in Goldman Sachs and much much less in Brian White, whose price targets have repeatedly been ridiculous, and orchestrated mainly for attention.
    Nov 24, 2015. 06:01 PM | 4 Likes Like |Link to Comment
  • Gilead Sciences: 92% Earnings Growth And 88% Free Cash Flow Growth [View article]
    This is a meaningless rear view mirror analysis missing all the key points. The myriad amount of data presented and swooned over is all in the past. The calculated fair values presented all assume past performance and are wildly optimistic.

    Current analyst concensus questions whether there will be any revenue growth at all in 2016 and beyond for a number of reasons not discussed here. EPS growth, if there is any, will probably be entirely from buybacks.

    If there indeed is no forward growth in revenues and net income, a correct analysis should have evaluated the present value of a continuous earnings stream of their current level of net income of around $17 billion/year. That's around $170 billion. Add to that their cash and investments less debt and it brings it to around $180 billion. The current market cap is $155 billion. So there's a potential 15% upside in market cap from here. With buybacks of several percent annually, there's perhaps an 18% upside in the stock price to $125/share. Though this is much lower than the numbers presented in the article, it is still very decent, and together with the dividend allows a very good return. The risk of course is whether they can maintain their net income at the $17 billion level, let alone grow it.

    I'm still long but have cut my position. I'll wait and see how competition, margin pressures, and their pipeline develops before changing it.
    Nov 24, 2015. 05:16 PM | 2 Likes Like |Link to Comment
  • Apple Will Soar After Solving This One Problem [View article]
    Get real. Apple isn't going back to 20% revenue growth on a long term basis. Analysts are forecasting around 5% annual revenue growth for 2016 and 2017, and even that may be optimistic. With buybacks, annual EPS growth should be in the range of 7-10% over the next two years, so the stock should do OK even as growth slows. But projections of 50% gains in the stock price over the next year are not realistic.
    Nov 23, 2015. 02:01 PM | 4 Likes Like |Link to Comment
  • Apple Investors Should Be More Cautious, Foxconn Data A False Positive [View article]
    Good article Alex. I do have a problem with your widely varying price targets over the past year though. Right now, I think 116 is too pessimistic, but let's see.
    Nov 23, 2015. 10:30 AM | 6 Likes Like |Link to Comment
  • Apple Investors Should Be More Cautious, Foxconn Data A False Positive [View article]
    Oh yeah tough guy? Puddem up, puddem up. I fight you standing on one leg. I fight you with one paw behind my back....
    Nov 23, 2015. 10:25 AM | 1 Like Like |Link to Comment
  • Apple Investors Should Be More Cautious, Foxconn Data A False Positive [View article]
    Exactly Ricardo.
    Nov 23, 2015. 10:20 AM | 5 Likes Like |Link to Comment
  • Apple touched by Goldman; up 1.6% [View news story]
    Her reasons for Apple moving higher are OK, but her one-year price target of 163 is not realistic. That price target would make Apple's market cap $900 billion, vs $633 billion at present. (This assumes share count would be reduced to 5.5 billion due to buybacks.) A price target of 130 is more realistic.
    Nov 18, 2015. 09:14 AM | Likes Like |Link to Comment
  • 2016 Will Be Apple's Biggest Year [View article]
    Good article Bill. Alex's 2016 estimates seemed too pessimistic to me. Your revenue, EPS, share count, and target price estimates seem very reasonable.
    Nov 16, 2015. 07:38 PM | 3 Likes Like |Link to Comment
  • What Should You Know About American Capital Agency's Dividend? [View article]
    Your statement "...the current dividend includes a partial return of book value" is a good way to look at it. They're not earning the dividend at present. This month's $0.20 dividend retention seems to me just a move to placate their sharehoders and stall for the inevitable cut. I've cut my position way back and will wait for more favorable macroeconomic conditions to increase it.
    Nov 16, 2015. 07:13 PM | Likes Like |Link to Comment
  • Apple: Sifting iPhone Sales Data [View article]
    Good article Mark. And it's refreshing to read your comments about doing data-driven analysis and your kind words toward Mr. Blair.
    Nov 12, 2015. 06:55 PM | 5 Likes Like |Link to Comment
  • Why Can't American Capital Agency Corp Deliver 20% Returns Anymore? [View article]
    I agree that the yield curve could flatten when the Fed raises rates, and if that happened, the dividend would likely be cut causing further declines in the stock price.

    The sickening decline of AGNC's stock price brings to mind Woody Allen's definition of a stockbroker: "A stockbroker is someone who invests your money until there's nothing left to invest."

    I would avoid the stock until we again see a steep yield curve and the Fed is in the process of lowering rates.
    Nov 12, 2015. 10:33 AM | 1 Like Like |Link to Comment
  • Apple Sales Could Decline This Year: Investors Need To Lower Expectations [View article]
    Good article Alex. You're very brave to have to deal with all the childish abuse that I have seen in various comments. I've been espousing a slowdown in revenue and net income growth next year for some time now, and have especially questioned whether F1Q16 could match the record setting F1Q15. Whether growth next year slows to single digits as most analysts currently project, or declines like bears such as Michael Blair and Doug Kass project, is the key question now. My own feeling now is that growth next year will be low single digit if there is any at all. Even so, with the 5% annual buyback EPS should increase by 5%, and your $130 price target seems reasonable.
    Nov 11, 2015. 02:16 PM | 1 Like Like |Link to Comment
  • Apple: Q1 2016 Could Be A Harbinger Of Softer Days Ahead [View article]
    Most analysts are forecasting around 5% annual revenue and net income growth over the next 2 years. I think that that forecast may now be in danger due to the recent news concerning their supply chain. Mr. Blair is not the only Apple bear. Doug Kass projects flat revenues over the 2016-2017 period. If switching is enough to counter upgrading from an ever growing installed base, Doug and Mr. Blair may be right. Time will tell.

    Even so, what's the fair value of the stock? If they can maintain FY2015's net income of $54 B annually into the future, the present value of that income stream is $540 B (using a 10% discount factor). Add to that the value of their net cash of $110 B, and you get $650 B fair value. (Net cash includes repatriation taxes of $65 B and debt of $47 B.) With the current share count of $5.58 B, the fair value of the shares is $116, exactly today's price.

    But Apple is buying back shares at a rate of around 5% annually. Thus if the P/E stays constant, the share price should increase by 5% annually even as the market cap remains constant. Or by 10% annually if they can continue to grow at 5%.

    Add to that the 2% dividend (likely to increase), and the 12% annual return (5% growth) or 7% annual return (no growth) seem to bracket what one can expect.

    The next several quarters should be very interesting.
    Nov 11, 2015. 10:40 AM | 3 Likes Like |Link to Comment