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Apple – Sell

NOT worth $50.00 a share!

 

Every company that has had tremendous price appreciation, especially those with major increases in their sales, earnings and tangible net worth, attract millions of new investors and build a very loyal shareholder base. But how much is a company with $110 billion of net worth, really worth?

 

In the past 2 years Apple has turned in the following results:

                     Revenues        LT Debts         Tangible Net Worth

  • Sept 2013       $171B           $39.8B                       $117.8
  • Sept 2015       $234B          $90.5                         $110.4

While revenues have risen in the past two years, long term debt and Tangible Net Worth are going in the wrong direction.  And revenues are slowing!

 

Two facts to consider:

1) Apple’s market cap is about $565B. Is any company worth $450 billion more than their tangible net worth?  Why?

2) Apple sells consumer products.  No consumer products company maintains a leadership position permanently. Competition works!  Eventually, another company will introduce new products that offer more of what consumers seek. Then, consumers will flock to the “new” hot products, and stocks buyers will switch their stock positions as well.

Apple is not worth $450 billion more than their tangible net worth, their share price will fall, a great deal, I just don’t know when.