Skip to main content

Apple, Inc. Passes Saudi Aramco on Track to be World's First $2T Company; Shares Overvalued

Article by Christopher Larson of Evergreen Financial Research (@tophlars)



Shares of Apple, Inc. (NASDAQ: $AAPL) traded higher today, reaching a market cap of $1.90T, before rolling over and erasing most of the day's gains on Tuesday afternoon. Apple has been on fire recently (in a good way), after they reported better-than-expected sales this past quarter.

One of the more memorable items on Apple's balance sheet was the company's current cash position: $192.8 billion in cash on-hand, or about $45/share of cash. On this, Kaden McBride (@McBrideKade), Chief Analyst at Evergreen Capital, tweeted, "I guess you can save quite a bit on R&D when you don't innovate."

Apple, Inc. has 4,280,000,000 shares outstanding. To reach a record-breaking market cap of two trillion, shares of Apple would need to reach a price of $467.29 per share. Evergreen feels safe issuing a "Soft Sell" rating to Apple, or a 2/5 rating, based on current prices, and with respect to a short-to-mid term time frame. The recent run up was slightly concerning. The earnings report attributed to causing the run-up was good, but Apple does not give us any significant, concrete, or salient evidence that future sources of income will be created or grow. 

Apple's product line has been given flak for several years now for lagging in innovation and lacking features that other brands have already implemented. We believe that one of the main factors keeping Apple's market cap up is the interdependence of the product lines. Apple is notorious for product lines that, the more a consumer has in the line, the higher the practicality and usefulness of each individual product. While this strategy works well for retaining existing buyers, it alone does not constitute a pull-factor for new consumers. 

Apple's foundation is built on two main pillars: cutting-edge innovation, and making this cutting-edge innovation available and simple to use for the average consumer. We are somewhat disappointed as of late in Apple's lack of the prior. We believe that for Apple to maintain its industrial superiority, it must bring more competitively-focused, industry-leading technology breakthroughs. 

The question must be asked, what has Apple done year-to-date that warrants a 41% increase? What new industries has Apple dominated; what new market share has it commandeered? Apple continues to make decent products and sell them at premium premiums, and while this is fine for a balance sheet, we do not believe it to be constituent of a healthy company, especially in respect to the whopping cash position. 

Evergreen Financial Research lowers Apple, Inc.'s rating from 3/5 to 2/5, or a "Soft Sell" rating, and offers a price target of $387/share. 

Comments

Popular posts from this blog

Tesla Continues Parabolic Rise; How Evergreen Will Play Options

Tesla has had a twelve month run that, if one can assume that a conservatively managed fund will average 6% YoY, equates to 190 years worth of gains. For much of this time, Evergreen Financial Research has pushed the case that shares of Tesla were extremely undervalued, and that the company was gripped by the lapels and held underwater by most mainstream financial news outlets. For the first time ever, Evergreen Financial Research believes that Tesla has, from a valuation standpoint, grown into its well-deserved shell. Tesla remains an interestingly valued firm; while Tesla seems to be overvalued by a fundamental perspective (EPS 1094), there is hardly a shred of a guarantee that the market will not continue to value Tesla based on the assumption that the firm succeeds in pioneering the transition to renewable energy, and eats every ICE automobile in the process. Tesla shattered many bears' expectations in Q2 of this year by posting a profit, and those who follow the stock know tha

Querying Live Stock Prices in Python Without an API

When I first got into Python, I had a clear goal from the very start: I wanted to make a stock ticker that I could choose a company, and it would show me the price in real time. Due to the beautiful simplicity of Python, I found myself getting closer to achieving this goal in less time than I thought I would need. Once I got the basics of Python down, I started searching for how to query a live stock price. There are plenty  of APIs that are happy to give you live stock data... for a handsome fee. Google Finance had a promising API, though it seems to have since been abandoned. Most of the decent free APIs I came across had a dishearteningly low daily query limit. In the end, I decided on a less respectable method: web scraping.  Through much trial and error, I have simplified the code quite a bit. I have also sorted through dozens of websites to see who does and does not monitor/throttle excessive requesting. I have come to the conclusion that Yahoo Finance is best for scraping stock