Apple Inc (AAPL)

[langostino]

"he sees AAPL oversold"


Careful there, Tex. He didn't say AAPL was oversold. He said it was "attractively valued". Very different things.

Of course "attractively valued" based on cash flow depends on what you think cash flow will be. As you point out, that's the real question, and what that turns out to be in 2008 and 2009, is an awfully tough unknown to predict.

FWIW, iSupply is reporting that Apple has gone and warned the NAND producers that it is pessimistic on the economy and cutting back orders substantially. Is this true, or just bad info? iSupply isn't perfect, but they're reputable, and they have excellent sourcing in all electronics supply chains. I seriously doubt they've gotten this wrong. If iPod and/or iPhone sales (not to mention PC sales) show deceleration and slower growth rates, it's almost inevitable that there will be a p/e compression in the stock. That's pretty much the law of the market jungle.

Regardless of how things go in 2008 and 2009, I doubt we'll be bored, and even if the stock slips on a banana peel, there will always be new products to talk about instead.