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AAPL Off In Mixed Market
Stocks are wavering in early trading as investors sift through another batch of earnings. Shares of AAPL continue to trade sideways after the initial earnings decline earlier this week. Upcoming catalysts include monthly NPD data (Mac / iPod business); holiday iPhone and iPad sales updates and carrier expansion; new content revenue streams such as video, books and social (Ping); and the uptake of refreshed Apple TV. AAPL trades at 14x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Apple Losing Investors Because It Won’t Pay Dividend (Bloomberg)
According to Toni Sacconaghi at Bernstein & Co., Apple’s failure to pay a dividend is preventing some investors from buying shares. About 10% to 15% of the investors he speaks with avoid Apple because they only buy firms with payouts or they’re concerned Apple will use the cash for an acquisition (as the company has well documented). Toni’s talking to the wrong investors. The stock has increased 5x the past 5 years versus an 11% gain in the S&P 500, with little signs of stopping. 45 million iPads next year says the company doesn’t have to issue a dividend. Picky value investors can wait.
Stock Still Attractive At These Levels (Seeking Alpha)
Apple stock has been on an incredible run, yet still appears attractive by standard valuation metrics. The stock currently trades at 14x next year’s expected earnings, and with a 20% earnings growth for the next 3-5 years. That’s an attractive price-to-earnings-growth ratio of 0.7. And that’s just based on company guidance. And we all know how low that bar is.
HP’s Slate Is No Match For The iPad; And It’s $300 More (PC Magazine)
Hewlett-Packard’s first tablet, the Slate, isn’t really an Apple iPad competitor at all. With Windows 7 Professional and other business-friendly features, it’s aimed straight at the corporate world rather than entertainment. The iPad, some would argue, is both. Additionally, there’s no 3G connectivity and there are limited pre-loaded applications. It also sells for $799, about $300 more than the iPad. Meaning, it’s dead on arrival.
Networks Are Already Blocking Google TV (The Wall Street Journal)
ABC, CBS and NBC are blocking free TV programming on their websites from being viewable on Google TV because they don’t think Google is doing enough to stop piracy. While Apple has run into its own issues, focus on paid or locally shared media has helped it see shows from ABC and Fox that either have or might be blocked on a Google TV. Check out SEO expert Danny Sullivan’s complete review of Google TV.
New Mac App Store Creating New Competition (The New York Times)
Apple is changing how everyone thinks about software. Instead of CD downloads and licensing keys, the newly announced Mac App Store will be as easy as iTunes. This puts Adobe and Microsoft up against a whole new range of competitors. This launch is an attempt to pre-empt Google, which is readying a Chrome app store expected to launch soon.
Washington Comes To Steve Jobs (Reuters)
President Barack Obama met with Steve Jobs yesterday according to White House spokesman Robert Gibbs. The discussion surrounded American competitiveness and education, especially reforms such as the President’s Race to the Top initiative. Obama and Jobs also talked about energy independence and ways to increase job creation. Read more from Business Insider here.