Thursday, January 29, 2015

Apple Of My Eye

I was driving on the interstate a couple of years ago and a nice, new Mercedes SL500 convertible zoomed by with these vanity plates.

I immediately understood why that guy was driving that car.

2013 Mercedes 500SL

I wrote about the Apple (symbol;AAPL) stock success story four years ago in my blog post, The Mall, Main Street and Wall Street., in which I stated,

In Apple's first quarter results for fiscal 2011 that were announced yesterday, Apple sold 4.1 million iMacs, 16.2 million iPhones and 7.3 million iPads. These are sales in just 3 months! They had $27 billion in revenue and $6 billion in profit in the quarter. Remember, this is a company that had annual revenues of $ 5 billion for the entire year in 2001.

Apple released its first quarter results for fiscal 2015 this week so let's revisit the AAPL story compared to four years ago.

  • Total revenues of $74.6 billion (compared to $27 billion four years ago)
  • Net profit of $18.0 billion (compared to $6 billion)
  • Cash and marketable securities on hand of $179 billion (compared to $50 billion)
  • Market cap of $695 billion (compared to $312 billion)
  • 74.5 million iPhones sold (compared to 16.2 million)
  • 21.4 million iPads sold (compared to 7.3 million)
  • 5.5 million iMacs sold (compared to 4.1 million)

Let's put a few of these numbers in perspective.

This is a chart prepared by Zero Hedge that shows Apple's cash position compared to other large S&P 500 companies. Again, this compares Apple's cash on hand compared to the total value of the other companies.

Back to that Mercedes 500SL with the OWNAAPL license plate that zoomed by me like I was going backwards.

A purchase of 1,000 shares of Apple stock at its closing price of $14.33 on December 31, 2002 ($14,330), or approximately the price of a Honda Civic at that time, would now have a cost basis of $.97 per share adjusted for stock splits.

At today's closing price of $115.31 per share, that $14,330 investment in Apple would now be worth $1,703,497---or about 119 times the original investment.

Stated another way, that would be one 2015 Mercedes 550SL and $1.6 million in AAPL stock today.

If I had been smart enough to own Apple in 2002 until today (except for selling a small chunk for that one car), I might deem myself worthy of a vanity plate like that myself.

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