Apple Profits, But Stock Is Not A Buy – WSJ.com – Brett Arends:
But even if the iPhone defeats all takers, what will happen to profit margins? This is an industry of mutual assured destruction.
And:
That said, you don’t have to be a raging bear on Apple, because the company is both unlevered and a cash machine. At June 27, it had $42 billion in cash, equivalents and marketable securities,and $22.3 in short-term liabilities. So it could actually hand out $20 billion — or just over $20 a share — as a special dividend without tapping credit markets. If it wanted to borrow, it could hand out more.
Furthermore it ought to see substantial growth from emerging Asia in the years ahead, although at the moment such sales are tiny.
But it’s hard to see this company as a bargain. The issue isn’t whether the stock is certain to go up or down, it’s where the balance lies in terms of risk and reward.
Snapshot of Apple Inc. – Yahoo Finance, Jul 22, 2009
Read Roughly Drafted Magazine’s opposing view – Daniel Eran Dilger:
Of course, Arends wasn’t out to get the iPhone just because he had a sketchy understanding of the new device and no capacity for visualizing the future. He was simply disgorging propaganda fed to him by Verizon troll Roger Entner of “IAG Research,” a group that represents the interests of Microsoft of mobile phone companies, which are all listed on the ‘research’ group’s clients page.
So who paid Arends to “counter” Apple’s blockbuster earnings report by writing for the Wall Street Journal that Apple is a bad stock pick because, he says, there’s no way the company can possibly continue to grow? Arends doesn’t say. He also doesn’t ever say why he thinks there’s limited potential for Apple to continue its trajectory of success, an opinion that flies in the face of the general Wall Street consensus to buy Apple.