“What do we get for the current price of $110?” Sven Carlin writes for Seeking Alpha. “That gets $38.8 in cash per share of which 93% is outside of the US. AAPL is waiting for a tax holiday in order to repatriate that cash without paying the 35% US corporate income tax rate. The last time a tax holiday was voted by the US Congress was in 2004 when corporations were allowed to repatriate offshore cash at a tax rate of 5.25%. Corporations brought $362 billion to the US economy on that occasion. This is essential for long-term investors as sooner or later the tax holiday will probably be voted and AAPL’s offshore cash will be available for dividends and buybacks.”
“The issue with the tax holiday is that we cannot know when or if it will be voted but looking at the logic behind it I find it an inevitable thing,” Carlin writes. “If Trump wins the elections the tax holiday is practically a sure thing.”
“AAPL has reached the milestone of 1 billion active devices. With a customer retention rate close to 90% we can easily estimate future revenues for AAPL,” Carlin writes. “AAPL has been around for 40 years now. According to the Lindy effect where the longer a technology has been around, the longer it’s likely to stay around it is more and more probable, day by day, AAPL will be around for another 40 years. ”
Much more in the full article here.
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