‘Mr. Market Is Not Impressed With Apple (And Why He’s Wrong)’

Jesse Felder:

We all know that the market is a discounting mechanism so what really matters is what Apple does over the next twelve months and beyond. The current valuation suggests to me that investors believe the company is already in decline like Microsoft and Radio Shack, as I mentioned above. Think about that: even if Microsoft were to acquire Radio Shack to have a retail presence to compete with Apple stores would you take that bet? Not a chance. There’s no way in hell those two could come close to generating an 18% sales gain let alone free cash flow margin of 28.8% like Apple just did in this last quarter. (Microsoft just announced a 2.7% sales gain and 16% free cash flow margin, in fact. Radio Shack’s numbers are worse.)

★ Sunday, 27 January 2013