01/15/2012, 02:32 AM
Wall street may be full of crooks and idiots but they have not been wrong to like Apple. Wall street is not one person. It's a bunch of people making decisions based on information often speculative, unreliable and bad. But Apple has been a no brainer for several years and for the most part they haven't been wrong about apple because they've delivered the information that is most important. Consistent earnings.
Originally Posted by laserboy
Apple trades at like only 15 times earnings. it earns something absurd like $27 per share. Its got like 6 times the market cap of a company as big as HP. It has had pretty consistent earnings for years. In a PC market during a recession where most pc makers have been having declining sales in PC and laptops, Apple has actually seen growth in their macbooks. So they've had growth where most others have been faltering. Not only that they have extremely high customer satisfaction which tends to mean repeat customers. So investors can reasonably speculate that they will continue to have a lot of good will with customers. It is a market leader in growth industries of mobile phone and tablets so investors can make an educated guess that in the near future they'll continue to make profits. Also a profitable music, movie, and ebook platform. Add to that in a month or two they are likely to announce an iPad 3 which i'm sure will do quite well since plenty of people skipped the ipad 2 or simply don't have an ipad but want to buy a first one. And in 9 months we'll likely see an iphone 5, possibly with a 4 inch screen and LTE which i see no reason why it wouldn't be popular. And there's still the possibility that they'll release a tv with appletv, airplay, icloud access, and apps, all inside. If you're projecting about the near future of apple you have to take an educated guess and thinK that for the next few quarters they'll continue to be profitable. Oh yeah and $80 billion dollars in cash just sitting around earning interest. $80 billion in cash means they have the flexibility to withstand flops, to buy companies that can add either new products or add features like they've done with itunes and Siri. Apple recently bought a flash memory maker Anobit for $300 and something mill to secure a key component and expensive component in their devices flash memory. Smart. No relying on Samsung. $400? Yeah it's not a horrible price for that stock.
Smoke and Mirrors? No, they have real earnings, consistent earnings, dominant market share, in growth industries, satisfied, repeat customers, sound management, and they have a boat load of cash. Not smoke and mirrors. The are just a well run company.