AAPL (Apple) 4.25.2012
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Apple (AAPL)
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Because I have shared this sheet with at least one person, I am adding this message: Please don't change the sheet without letting me know. Instead go ahead and make yourself a copy. This sheet was created by www.dumbmoneyinvestor.tumblr.com. If you find any mistakes, please DO let me know! I am self-taught, and not trained as a CFA, and have no experience in the financial services industry. Please always do your OWN DILIGENCE. I think this sheet is right, and I'm relying in part on it, but you should not assume it is correct. For fuller disclaimers, see here: http://dumbmoney.tumblr.com/Disclaimer . Please consider following me on Twitter (https://twitter.com/#!/The_Dumb_Money), at Stocktwits (http://stocktwits.com/The_Dumb_Money ), at www.fool.com (handle: "TheDumbMoney"). Please do not remove this information if you copy and share this sheet with others. Thank you and best of fortune! Further notes: 1) I discount all cash on hand by 35%. That is to account for eventual taxation of money held abroad. I realize not all money is held abroad and that this is too conservative. I also realize that tax holidays, etc., may mean the taxes are never paid. 2) For purposes of this analysis, I am not delving into the cash flow statement to question it very much. This is just a quick-and-dirty. 3) For my discount rate I have gone with some dude's best shot at the WACC. See http://www.wikiwealth.com/wacc-analysis:aapl. Note this is all possibly a bit conservative because I am using the 9/2011 y/e FCF figure (30.011 billion) as my starting point for valuing the company. For example, FCF in 12/2011 quarter was 16.125 billion, up from 8.510 billion in 12/2010 quarter (which is incorporated in the 30.011 billion y/e 9/2011 figure I'm using). Calculation for Years 1-10 = Future CF Value/((1+i)^N);
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Calculation for Perpetuity Growth After That: (CFn*(1+g))/(R-g)
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where: CFn = Cash Flow in the Last Individual Year Estimated; g= Long-Term Growth Rate; R= Discount Rate, or Cost of Capital, or Cost of Equity
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Discount Perpetuity Growth to Present Value Using: Present Value of Cash Flow in Year N = CF at Year N / (1 + R)^N
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Estimation of Free Cash Flow Growth (to use for C24)
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(BILLIONS)MORE RECENT
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Ending FCF Value (9/2011)30.07709/201130.011
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Beginning FCF Value (9/2005)2.27509/20098.946
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Compound Annual Growth Rate (CAGR) (%)53.77%35.34%
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53.77138256%35.33586194%
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Two Stage Discounted Free Cash Flow SpreadsheetYear 1 FCFYear 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10
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%
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FCF & % Growth (BILLIONS)0.1230.01133.6123237.645798442.1632942147.2228895152.8896362559.2363926166.3447597274.3061308883.22286659
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Discount Factor10.11.11.211.3311.46411.610511.7715611.94871712.143588812.3579476912.59374246
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Discounted (FCF) to Present Value27.2827272727.7787768628.2838455328.7980972729.3216990429.8548208430.3976357630.9503200531.5130531432.08601774
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Sum 10 Year DFCF (BILLIONS)296.2669935
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Post-10 Year Perpetuity DFCF Value (2% Growth)0.021061.091549
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Discounted to Present Value (BILLIONS)2.59374246409.0967262
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Present Intrinsic Value all FCF (BILLIONS)705.3637197
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Shares Outstanding (BILLIONS) (diluted)0.939
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Present Intrinsic Value Per Share (DCF ONLY)751.1860699
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PLUS CASH & EQUIVS. ON HAND (35% tax disc.) (billions)68
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MINUS SHORT AND LONG TERM DEBT (BILLIONS)0
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NET CASH (BILLIONS)68
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Value of Cash on Hand, Per Share72.41746539
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TOTAL INTRINSIC VALUE PER SHARE$823.6035
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Present Actual Share Price (November 1, 2011)$580.13
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Amount Undervalued (Percent)29.56%
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Buy Price$658.88
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Sell Price$988.32
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