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Misho ILIEV

Misho ILIEV
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  • Regardless Of Price, Apple's Intrinsic Value Is Still On Its Way To $1,000 [View article]
    Thanks, Valuentum.

    I do not take the multple at face value. The problem with Apple is that future cashflows are speculative, especially the cashflows in 2016-2020.

    Why would you pay 8 times trailing earnings if you know that you have no clear idea about the next 7-8 years eranings. But you do know the "law" of large numbers and there is a likelyhood earning will start decreasing.

    @Zhang:
    Investopedia explains 'Law Of Large Numbers'
    As an example, assume that company X has a market capitalization of $400 billion and company Y has a market capitalization of $5 billion. In order for company X to grow by 50%, it must increase its market capitalization by $200 billion, while company Y would only have to increase its market capitalization by $2.5 billion. The law of large numbers suggests that it is much more likely that company Y will be able to expand by 50% than company X.

    The law of large numbers makes logical sense. If a large company continues to grow at 30-50% every year, it would eventually become bigger than the economy itself! Obviously, this can't happen and eventually growth has to slow down. As a result, investing in companies with very high market capitalization can dampen the potential for stock appreciation.

    Read more: http://bit.ly/X7I0Pa
    Jan 30 06:31 AM | 1 Like Like |Link to Comment
  • Regardless Of Price, Apple's Intrinsic Value Is Still On Its Way To $1,000 [View article]
    bjnflicks,

    Apple need at least to keep its earnings at the present level for 7,7 years to make up for those $350.

    The $150 cannot go directly into the pockets of the investors as there are variuos costs in bringing the cash back to the US.

    On top of that,having that "dead" money isn't really attractive as such. They can as well bury them on the Moon. Buy back is a great idea at this point but Apple's managment seem to not care about such little details as efficient capital allocaion. Too bad for investors.

    Also, I don't contest what Apple could do. Apple is not dead, it can have potentially a great future. Only there are significant risks on the way there and that, I think, is factored in into the present price (a bit exaggerated even).

    My favourite company is Visa. It's a wonderful cash generation machine, high profit margins, high barriers to entry and mind-boggling potential for future growth (more than 80% of the payments worldwide are done cash or by check).
    Jan 30 06:25 AM | Likes Like |Link to Comment
  • Regardless Of Price, Apple's Intrinsic Value Is Still On Its Way To $1,000 [View article]
    The flaw in your analysis is that you don't take into account the "law of the big numbers" - the fact that a company so huge has bad growth prospects. Especially if it operates in a highly competitive markets.

    I think Apple is currently undervalued but only slightly. 500 would be a fair value.
    Jan 29 03:58 PM | 2 Likes Like |Link to Comment
  • Apple Is No Longer A 'Don't Buy' [View article]
    That's precisely the problem with the Apple stock. Nobody knows what to expect.

    It has been overbought (ignoring the realities that once Apple is so huge it cannot continue to grow at that breakneck speed) and then oversold.

    Currently Apple is investing in R&D more than ever before. So... maybe its best days are still ahead. Problem is, nobody has got a clue...

    I think the stock can easily recover in the next 2-6 weeks to 480 or even 500. But that's as far as I can go with the predictions.
    Jan 29 03:47 PM | Likes Like |Link to Comment
  • Apple Is No Longer A 'Don't Buy' [View article]
    I am not at all into technical analysis but I think AAPL is finding support a 440-450 and the stock will slightly, but not much, rebound from now.

    The volume of trade now has normalised and that means, I think, that the desperation to sell is subsiding. Without a big sell off price cannot go down as Apple is fairly priced (maybe indeed a bit undervalued) now to reflect the risks to growh.
    Jan 29 03:58 AM | Likes Like |Link to Comment
  • Apple Is No Longer A 'Don't Buy' [View article]
    Apple only looks cheap but it is not really. This is because it is too big and it profit can start sliding any minute now.

    True, it could remain on top of things but this is very uncertain. Hence the low valuation.
    Jan 28 01:17 PM | Likes Like |Link to Comment
  • Mr. Market Should Be Looking At Apple's Cash Flow Rather Than Its Profits [View article]
    Apple did OK; the problem is the expectations were very high.
    Jan 25 08:37 AM | 3 Likes Like |Link to Comment
  • Mr. Market Should Be Looking At Apple's Cash Flow Rather Than Its Profits [View article]
    Agreed, Serega. Apple at above 550-600 was a speculation that AAPL will have an outstanding quarter.

    That didn't come true, hence the sell off. After irrational exuberance comes irrational gloom - so we may see AAPL pluging further to low 400s. Sadly, all that's happening is very logical.
    Jan 25 08:01 AM | 1 Like Like |Link to Comment
  • Apple Pie Or Rotten Apples? A DCF Valuation Following Earnings [View article]
    Here's an interesting quote from the FT:

    "Benedict Evans, a London-based smartphone analyst with Enders Analysis, points to the “Catch-22” situation in which Apple finds itself, where high sales create fears of market saturation and low sales suggest slowing growth. “Apple has got to the point where all news is bad news,” he says."
    Jan 25 05:39 AM | 2 Likes Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Camden,

    I am not sure the cash should be subtracted in full when calculating the multiple. I don't think this pile of cash can be given back to the shareholders as it is. It is not in the US and in any event there will be taxes.

    Plus, what seems more important is the generation profit, not the equity already accumulated.
    Jan 24 05:31 PM | 3 Likes Like |Link to Comment
  • Apple's Earnings Fall Is Completely Unjustified [View article]
    It's all about:
    - the trend which is not good
    - compounded with the "law of the large numbers".

    Everybody knows that the king of the hill can only go down... And now there are signals in that direction. So people are spooked.

    If you seriously believe that Apple is the long term monster cash generator you don't have to worry as if they prove that share price will eventually shoot up. But you are not sure, right?

    Well, so are the other investors/speculators.
    Jan 24 02:43 PM | Likes Like |Link to Comment
  • Apple's Earnings Fall Is Completely Unjustified [View article]
    One word of advice, RycheMykol - diversify!

    Do not further load yourself with a stock that will potentially underperform for at least next 1-2 years.
    Jan 24 02:17 PM | 1 Like Like |Link to Comment
  • Apple's Earnings Fall Is Completely Unjustified [View article]
    Apple can learn a lot from IBM. With falling revenue, margins and even at the treat of missing earnings estimates they manage through buy backs to keep the EPS and the share price growing.
    Jan 23 10:50 PM | 5 Likes Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    Apple has lot of cash that is doing nothing (misallocation of capital reducing the return on equity). So why not buy back if the stock is cheap?

    Two possibilities:

    - Apple is shareholder unfriendly;
    - stock is not really that cheap.

    Whichever is true it does not speak in favour of buying Apple.
    Jan 13 03:24 PM | 2 Likes Like |Link to Comment
  • An 'Apple To Apple' Comparison Of Apple [View article]
    This sell off today (AAPL at 510) seems a good buying opportunity for those who have no Apple or just 2-3% in their portfolio.

    "A total gift" is a bit exaggerated. There are not insignificant risks in owning this stock.
    Dec 14 12:05 PM | Likes Like |Link to Comment
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