By Brad Cornell Apple – Too often the investment business mimics the entertainment business.  An issue becomes hot, it dominates the press for a short time, and then it is gone and everyone forgets it.  While that may be a fine strategy for think about movies, it is not a good one for analyzing investments.  If you don’t follow up on your predictions and reassess your analyses, what is the point of doing the valuation analysis in the first place?

Here is one example.  On May 18, 2015 Carl Icahn penned an open letter to Tim Cook on the valuation of Apple.  Icahn concluded, “With Apple’s shares trading for just $128.77 per share versus our valuation of $240 per share, now is the time for a much larger buyback.”   , Icahn predicted that AAPL would soon enter the market for consumer televisions and would push its own automobile to the market by 2020, which should make its Wall Street valuation — already tops in the world — nearly $1.4 trillion.

 

“It may be difficult for some to fathom (only because AAPL is already the largest company in the world), but Apple is very much a long term growth story from our perspective,” Icahn wrote in a letter posted on his website, adding that increased spending on research and development “bolstered our confidence that Apple will enter two new product categories: television and cars.”

 

AAPL has long been rumored to have a television in the works, and more recently has reportedly been trying to build a streaming bundle of television networks similar to a truncated cable offering. More recently, the tech titan has been hiring for what appears to be the development of an electric Relevant Products/Services automobile.

Well, Apple bought back a bunch of shares and now it is trading at $110.  The question is where is Mr. Icahn?  Is he buying shares like crazy at $110?  Has he changed his mind?  Who knows.  Those questions are no longer fashionable.

Apple
Apple