Gene Munster says that Apple has entered a new era
With Apple's shares making a new all-time high this morning at $187.67, former analyst turned Venture Capital executive Gene Munster says that Apple is starting a whole new era. Munster says that Warren Buffet's purchase of 75 million additional shares of Apple during the first quarter is just one sign of this new "Apple story." Munster adds that this new era is a week old, and started with the release of the company's fiscal second quarter earnings report. "The big picture here is, we're essentially one week into a new type of thinking around the Apple story," said Munster.
Independent analyst Neil Cybart says that Apple's balance sheet initiative is what will now drive the company's shares instead of iPhone sales. And that change is happening just in time; iPhone sales made up 62% of Apple's net sales in its latest quarter, down from 67% a year ago. Munster has followed Apple for many years and says that this new era for Apple could be just as big for the company as the introduction of the iPhone turned out to be.
"Two things are changing about the Apple story, and we could be in front of a significant move higher in the stock. We're entering a phase of more visibility around the iPhone. There's always going to be some level of anxiety, but not the stress [investors] have had in the past."-Gene Munster, managing partner, Loup Ventures
Shares that are bought back by Apple are retired and are no longer considered outstanding. Long term investors like Warren Buffet like to see this type of activity because it means that the company thinks its own shares are a value. And if there is one thing that attracts Buffet like flies to honey, it is a stock trading below what he sees as its future intrinsic value. And in theory, who would know more about the real future value of Apple than Apple?
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