I would love to see Apple buy a small cable system to experiment with new home-entertainment technology and then license the hell out it to Comcast and Time Warner.

I would love to see Apple buy a small cable system to experiment with new home-entertainment technology and then license the hell out it to Comcast and Time Warner.

Thanks! I completely agree. I think PE multiples are poor metrics, CF multiples are much better, which essentially captures netting out the cash to a degree. Especially since interest rates are so low, interest income doesn't have much effect on EPS, but it surely would if rates were higher since AAPL has so much cash investments.

Another powerful metric is EV/NOPAT. Enterprise value = market value – cash + debt, NOPAT is net operating profit after tax, (which excludes interest income) this is really the correct multiple if netting out cash.

Thanks for your input.

Thanks! I completely agree. I think PE multiples are poor metrics, CF multiples are much better, which essentially captures netting out the cash to a degree. Especially since interest rates are so low, interest income doesn't have much effect on EPS, but it surely would if rates were higher since AAPL has so much cash investments.

Another powerful metric is EV/NOPAT. Enterprise value = market value – cash + debt, NOPAT is net operating profit after tax, (which excludes interest income) this is really the correct multiple if netting out cash.

Thanks for your input.

Sure it looks good on paper, and may bouy the stock during good times. And it is definately good for the EMPLOYEES!

But, if a time comes when Apple looses their charm, they will spend the cash while the stock goes down.

Just look at MS or BRKA right now.

Sure it looks good on paper, and may bouy the stock during good times. And it is definately good for the EMPLOYEES!

But, if a time comes when Apple looses their charm, they will spend the cash while the stock goes down.

Just look at MS or BRKA right now.

I was under the impression that Apple spread the iPhone accounting over the length of a contract because Apple received a portion of each month's payments to AT&T. If this no longer applies to 3G – OK.

While I want to see SPJ make a full recovery, I am not concerned about his health as it relates to the company. I have held the stock for years and will continue to do so no matter what.

The bench is strong and deep; they have a level of corporate and strategic discipline and focus that is now legendary, though sometimes too rigid; their ability to read the market remains unparalleled; they remain laser focused on the customer, quality and innovation; and they have $28B in the bank.

There's no doubt I remain filled with confidence in Apple.

But I really want an iPod Touch Phone with a voice only plan!!! I am not income constrained, but I am frugal. Though I have bought top of the line Apple laptops every 2 years since 97, I will never buy an iPhone due to contract costs. I have had a $29/month, bargain basement voice-only cell phone plan for 9 years and will keep it along with the $30 phone that came with the plan.

There are more like me out there. Give us a good iPod Touch phone with voice only and free wifi, and for very little additional cost to Apple, the company gets one additional dumptruck load of cash ready to make a daily deposit at the Bank of Apple.

I was under the impression that Apple spread the iPhone accounting over the length of a contract because Apple received a portion of each month's payments to AT&T. If this no longer applies to 3G – OK.

While I want to see SPJ make a full recovery, I am not concerned about his health as it relates to the company. I have held the stock for years and will continue to do so no matter what.

The bench is strong and deep; they have a level of corporate and strategic discipline and focus that is now legendary, though sometimes too rigid; their ability to read the market remains unparalleled; they remain laser focused on the customer, quality and innovation; and they have $28B in the bank.

There's no doubt I remain filled with confidence in Apple.

But I really want an iPod Touch Phone with a voice only plan!!! I am not income constrained, but I am frugal. Though I have bought top of the line Apple laptops every 2 years since 97, I will never buy an iPhone due to contract costs. I have had a $29/month, bargain basement voice-only cell phone plan for 9 years and will keep it along with the $30 phone that came with the plan.

There are more like me out there. Give us a good iPod Touch phone with voice only and free wifi, and for very little additional cost to Apple, the company gets one additional dumptruck load of cash ready to make a daily deposit at the Bank of Apple.

The argument still applies that analysts are ignoring the $33 cash per share when looking at the P/E. This is a much larger error than the mistake of ignoring the interest earnings (in this environment!)

P/E (ttm):

Analysts: $87 / $5.36 = 16.2x

Correct: ($87-$33) / (5.25 – 0.70) = 11.6x

AND, with the deferred revenue from every single iPhone ever sold still hitting the books, it is very hard to imagine FY09 earnings falling below FY08! If the don't sell a single iPhone this quarter, iPhone GAAP revenue is still the same as Q408. Who thinks they didn't sell any handsets this quarter?

The argument still applies that analysts are ignoring the $33 cash per share when looking at the P/E. This is a much larger error than the mistake of ignoring the interest earnings (in this environment!)

P/E (ttm):

Analysts: $87 / $5.36 = 16.2x

Correct: ($87-$33) / (5.25 – 0.70) = 11.6x

AND, with the deferred revenue from every single iPhone ever sold still hitting the books, it is very hard to imagine FY09 earnings falling below FY08! If the don't sell a single iPhone this quarter, iPhone GAAP revenue is still the same as Q408. Who thinks they didn't sell any handsets this quarter?