http://stockbrokerplayspoker.blogspot.sg...pl-us.html
I've been using apple products for the last 3 years, I like it very much. I find that its not difficult to understand why consumers like apple products, its really easy to use. Last year I bought an iPad for my dad, who is over 60 years old and it only took him a day to learn how to use it. Now he watches HK drama and plays mahjong on his iPad, he never touches his computer and TV anymore. Amazing.
Apple has recently dropped over 20% from its high. I think the reason for the fall is mainly coming from the fear of competition from other big players such as Samsung. I do admit that I'm not really familiar with their products but it does seem that products such as S3 are getting very popular.
If you had read my previous post, you will notice that my portfolio mainly just focuses on the IT retailing sector which I believe still has a lot of growth potential. The young are using technology more often and the old are learning how to use it too, nowadays when I take the bus or the train, I see so many people sliding around and using their smartphones or tablets.
I think my current positions in starhub and challenger serves very well in capturing profits from this area. However I'm currently mainly just focusing on the down stream, which is the final sale of the products to retail customers. Upstream would be the design and production of the products. If I were to take a position on lets say Samsung and Apple, I'll be better positioned to capture both the upstream and downstream profits. I would avoid the midstream which is distribution as I feel I am quite weak in analyzing companies in such areas.
Lets look at apple's numbers. First of all, my most important return on equity, apple delivers an amazing 40%, definitely a lot more then the 20% that I usually look for. Profit margins stays at over 25% and I do believe they will have no problems maintaining it above 20%, apple is a premium product with a very strong branding, I think they should be able to have strong pricing power. Lastly looking at their balance sheet, they are net cash with a war chest of 29 billion in cash against a market cap of 490 billion, so when we buy the shares about 6% of it is all cash which is a big cushion against any shocks.
I'm not in a big hurry to pick up apple shares but I'll be closely monitoring its news and share price. The ideal situation is an improvement in fundamentals with the stock price still remaining sideways or even better still another big dip in stock price. With a favorable situation I would definitely wanna pick it up at anything from PE 8 or less, as it is definitely more than enough margin of safety and makes up for it being a foreign stock.
Homepage
PR Newswire
