This Apple Product Could Mean the End of Cell Phones

Total Wealth Staff Apr 13, 2015


5 Responses to This Apple Product Could Mean the End of Cell Phones

  1. H. Craig Bradley says:


    Activist investor Carl Icahn this week once again heaped praise on Apple, saying the company’s stock continues to be vastly undervalued and should be trading today at a price of $216. If so, then why does the market seldom bid Apple’s share price much above a P/E of 17? Carl thinks it should be valued at 20X earnings.

    I have observed that the average P/E for Apple over long periods is about 13X. So, each time in the past whenever the stock’s P/E got to about 17 the price then stalled-out, even if earnings are still going-up by a modest amount ( 15%) annually. Earnings increased year over year by 23% in the fourth quarter of 2014, propelling the stock up from $94/share to a 52 week high of $133/share. It soon pulled-back from the stratosphere.

    Clearly, the market doubts Apple’s staying power and wants to see the numbers first (consistency). Carl, on the other hand, wants buyers to pay more first, but the market is not inclined to see it Carl Ican’s Way. So, Carl wants more of Apple’s cash deployed to stock buybacks as compensation.

    The earnings spurt in 2012 was a short term anomaly but it did show that high growth rates of 50% really attract the attention of buyers and accelerate measures of momentum, as long as the earnings can keep it up. Often they don’t and the stock soon comes crashing back down to earth. I don’t expect a repeat of that in the next year.

  2. Tom Stanley says:

    If I could afford some apple stock I’d get it

  3. J bear says:

    Follow the money

  4. J bear says:

    Good firms win. Bad ones lose. Always.

  5. RJ says:

    Replace the cell phone?

    As a cellular communication (perhaps GPS) device, maybe. But not yet.

    First, the cell phone is also a media, streaming media, and social media proxy device, and those capabilities are expanding. The cell phone, at this juncture, is replacing the tablet, not the watch.

    Second, for those reasons — storage and delivery — the watch can only be an interface, a proxy, to actuate and then stream media. Presently, it can not do this.

    Third, do you really want to replace your cell phone with a postage stamp screen?

    What is possible, however, is that the watch can interface with something like Google Glass (are you listening Google?), which would enhance its capabilities.

    For now, as interesting and fashionable as the watch is, it is NOT a must have; just a cool looking accessory…or expensive piece of jewelry.

    It never ceases to amaze me how people will froth at the mouth and shell the dough for add-on accessories that really don’t add much.

    Uh….what was that you were saying, Kieth? “Must have” companies and services. YOu know, the things people “can’t live without”.

    I can forgo the watch for now..

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