Later, 10:55 p.m. CT: shortly after posting the article below, a reader sent me the link to a NYT article: "The Fabulous Apple Cash Machine."
That hasn’t prevented its share price from powering upward. For the moment, the stock market remains entranced with what Apple is doing financially, and for understandable reasons. Apple may no longer be a great growth company but it is still extraordinary, said Aswath Damodaran, a New York University finance professor, who has analyzed Apple’s earnings closely since 2010. Come what may, he said, Apple churns out staggering quantities of money with metronomic regularity.
“Apple is the greatest corporate cash machine in history,” he said in an interview. “We should appreciate that amazing achievement. The problem is, it’s not growing much. It’s a slow-growth cash-generating machine.”
Quantum theory: Although the use of the wave-particle duality has worked well in physics, the meaning or interpretation has not been satisfactorily resolved.On Tuesday, the company provided fresh details of how great a cash machine it is. In just three months, after expenses and investments and payouts to shareholders, Apple’s already colossal pile of cash and marketable securities grew another $10.8 billion, reaching a nearly unfathomable $256.8 billion.
Likewise, Apple, to me suggests a similar problem when trying to pigeon-hole Apple: is it a growth company? Is it a value company?
I don't think the answer to that has been satisfactorily resolved.
In physics, whether an entity is a particle or a wave depends on how it is measured.
Same with Apple Inc: how one sees Apple Inc -- as a growth company or as a value company depends on how it is measured.
My hunch is that Apple folks like to think of the company as a "growth" company, whereas financial analysts see Apple as a "value" company.
In my 40+ years of mediocre investing, I've never seen such clear-cut options for those who want to invest in the equity market (NYSE or NASDAQ). For me there are three options if I win the $1 million + lottery:
a) one-half goes into AAPL and one-half goes into Berkshire Hathaway (Warren Buffett). One could live off the AAPL dividends but if not enough, then sell a portion of Berkshire shares at one year + one day, paying capital gains taxThat's what I plan to do if I win the $1 million+ lottery. Plus buy a new bike. Plus an expensive bottle of Scotch. New shoes for my wife. Ditto, a new purse. A chocolate croissant for Sophia. And a new iPad for Sophia. But that's about it.
b) if one thinks WTI will never go below $40 again, then put the entire $1 million into oil and oil service companies
c) if either of those options are too extreme, then simply put the entire amount into a John Bogle mutual fund and forget about it
With regard to AAPL, these are the current price targets: