Apple for the next 40 years
“What do we get for the current price of $110?” Sven Carlin writes for Seeking Alpha. “That gets $38.8 in cash per share of which 93% is outside of the US. AAPL is waiting for a tax holiday in order to repatriate that cash without paying the 35% US corporate income tax rate. The last time a tax holiday was voted by the US Congress was in 2004 when corporations were allowed to repatriate offshore cash at a tax rate of 5.25%. Corporations brought $362 billion to the US economy on that occasion. This is essential for long-term investors as sooner or later the tax holiday will probably be voted and AAPL’s offshore cash will be available for dividends and buybacks.”
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“The issue with the tax holiday is that we cannot know when or if it will be voted but looking at the logic behind it I find it an inevitable thing,” Carlin writes. “If Trump wins the elections the tax holiday is practically a sure thing.”
“AAPL has reached the milestone of 1 billion active devices. With a customer retention rate close to 90% we can easily estimate future revenues for AAPL,” Carlin writes. “AAPL has been around for 40 years now. According to the Lindy effect where the longer a technology has been around, the longer it’s likely to stay around it is more and more probable, day by day, AAPL will be around for another 40 years. ”
Much more in the full article here.
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