Monday, August 27, 2018

Apple: Still Cheap At $1 Trillion

Despite surging past a $1 trillion market cap, Apple remains cheap trading at roughly 14x FY19 estimates, ex-cash.
Active iPhone device growth continues to provide a boost to service revenues.
Apple remains on pace for a 10% net payout yield.
Due to huge free cash flows in the December quarter, the tech giant will hardly reduce cash balances in the 2H at the $25 billion quarterly capital return pace.
Now that Apple (AAPL) has crossed the $1 trillion market cap threshold, the capital returns need to be reviewed again to derive whether value still exists in the stock. The famous plan for a $100 billion boost to stock buybacks was impressive at much lower values. My investment thesis that the stock wasn't still priced for the EPS boost still stands.
Read the full article on Seeking Alpha. 

Disclosure: Long AAPL. Please review this disclaimer page for more details. 

 

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