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[1:38 PM]
Whoa! Wall Street Money Manager Says Apple "Under Appreciated!"
Observer Frederic Murray sent us a great story from The Street that says some great things about Apple. The Street is a financial web site offering professional news and commentary. The story, titled Compaq Capers, and Why a Turnaround at Apple May Be for Real, spends a good bit of time talking about what we Mac users have known for the last year, Apple is back. This is an excerpt from the article:

Now, a kind word about Apple: Given the aforementioned turmoil at Compaq, it might be foolish to find kind words for anyone in the PC world. But it's when the emotions of headlines are fiercest that taking a clear-headed look away from the fray makes some sense. I heard from one of my regular (albeit press-shy when it comes to using his name) money managers regarding Apple (AAPL:Nasdaq).

This is the same money manager who not long ago gave readers a head's up on the rebound at Qualcomm (QCOM:Nasdaq), and not that long ago he was prescient in his reasons for loving the then-dejected GM (GM:NYSE), Ford (F:NYSE) and Chrysler [now Daimler Chrysler ((DCX:NYSE).] "Yeah, I may have lost my mind on this, but I am really beginning to believe this company is misunderstood and underappreciated," he says. "First, the recent improvement at the company is very real. Cash Flow from operations has been gigantic for the last seven quarters. As of the numbers announced last week, Apple has $2.92 billion of cash on the balance sheet. They announced that they are calling their $660 million convertible issue in on June 1.

"When you eliminate the convertible debt and adjust for the new shares, Apple will have over $2.6 billion of net cash on the balance sheet, which is $15.20 a share -- NET. That is 42% of the stock price. Operationally, gross margins have been trending up for the past five quarters, and were just shy of 26% in the March quarter. Remember that Apple has a cost advantage of over $100 a box over the Wintel contingent because they don't pay Intel (INTC:Nasdaq) for their expensive processors and they don't pay Microsoft (MSFT:Nasdaq).

"The net of all this is that I could see perception of Apple changing dramatically over the next six months or so. In a world of vast uncertainty in the PC space, Apple should be one of the few companies to grow." He may have something there. My 14-year-old needs a new computer, and she'd really like a blue iMac! It's the way she says, "They're so Cuuuute! Just like a Beetle." And look at the resurgence at VW. (Yep, you know what car is destined for my garage one day!)

This is a great article, and we recommend that you read it. There is much more than what we quoted.

The Mac Observer Spin: It's good to see that a Wall Street money manager is finally seeing what The Mac Observer and our own columnist The Apple Trader have been saying for a long time. Apple is undervalued (they have cash on hand that is equal to about 45% of their market value! That does not count their physical assets and intellectual property), and investors need to buy a clue. It looks like this particular money manager has invested in a big clue. When his or her colleagues catch on, there will be a whole bunch of Apple investors who will be very happy.

The Street



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