One of the biggest stories in Tuesday's news cycle comes from
Goldman Sachs (NYSE:
In a research note from April 1, 2013, the company removed
) from its Conviction Buy List citing lower than
expected market share.
While the headline is important, there was a lot more to the
report and most of it is bullish. Here are seven other quotes
from the report worth reading.
The dividend will increase-- and not by just a little.
"…we believe Apple is set to announce a new capital allocation
plan in short order, and a substantial increase in its dividend
and/or share repurchase authorization could provide a healthy
floor for the stock price."
The naysayers who said the iPad mini didn't have a place in
the product line were clearly wrong.
"…we believe it is now clear that the iPad mini has been far
more successful than we anticipated, and the iPad family may be
permanently tilted towards this smaller form factor."
It's still about the ecosystem.
"We continue to believe Apple's platform-centric business
model makes its cash flows and installed base loyalty far more
resilient than traditional hardware-centric companies."
Expect iPad Mini demand to continue.
"…we believe iPad mini demand remains robust, and as a result,
we believe this category will account for a far greater portion
of total iPad sales than we previously anticipated."
iPhone demand remains soft, especially with the iPhone 5S on
"We lowered iPhone units due to our view that the iPhone 5
product cycle has generated less new user growth and installed
base upgrades than we had previously hoped. While we left our
March quarter estimates unchanged, we reduced our June quarter
unit expectations to 30.92 million from 33.47 million previously.
This is based on our belief that demand will wane ahead of the
upcoming iPhone 5S refresh…"
MORE- iPhone Patent Filing Could Put Apple Back
at the Top of the Cell Phone Food Chain
Purely based on valuation, Apple is a steal at these
"Even on our new estimates, Apple's valuation remains
remarkably depressed. Its CY2013 P/E of 9.6X is a 7% discount to
the IT hardware group average (excludes outliers Fusion-io and
Lexmark). In addition, a significant discount emerges when
Apple's cash stockpile is taken into account: its P/E ex-cash of
6.5X is 26% lower than IT hardware average of 8.8X."
Those "rumored" products
are beginning to become part of analyst's thesis.
"…new product innovations such as iWatch and iTV could emerge
over the next year, further enhancing the company's overall
platform reach and ability to monetize its installed base."
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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