Apple Stock due to crash soon?
Berko's comments on whether Apple stock is a good buy
Any stock heads want to comment. This talk is beyond my grasp. I'd never dispute the claims that Dell and HP are much bigger and have deeper product lines. That's easy to see. However if I was a prospective investor I wouldn't exactly feel comfortable with this mans assertions. I think it's rather presumptuous to think Wallstreet doesn't understand Apple's income statement yet the finance writer for The Beacon News seems to have everything figured out. What say ye?
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Now if you really want to own AAPL, you should peel the skin and examine the core. The core is AAPL's $4.7 billion cash trove that in the last 12 months earned AAPL $48 million in interest. To match its interest income, AAPL would have to more than double earnings from operations this year. Read the teeny-weeny print in AAPL's income statement and you'll find out that $48 million is 13 cents a share. And if AAPL were to apply the pending Financial Accounting Standards Board accounting rules in 2004, which treat stock options as a cost, this year's expected $175 million in net income would be reduced by 70 percent. Do you get my drift?
Now if you really want to own AAPL, you should peel the skin and examine the core. The core is AAPL's $4.7 billion cash trove that in the last 12 months earned AAPL $48 million in interest. To match its interest income, AAPL would have to more than double earnings from operations this year. Read the teeny-weeny print in AAPL's income statement and you'll find out that $48 million is 13 cents a share. And if AAPL were to apply the pending Financial Accounting Standards Board accounting rules in 2004, which treat stock options as a cost, this year's expected $175 million in net income would be reduced by 70 percent. Do you get my drift?
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Fortunately, the company has the best balance sheet in the industry. Book value is $12 a share and growing, the company has zero long-term debt; however its net profit margins (2.4 percent this year) can't hold a candle to Dell and Hewlett-Packard, each with margins over 6 percent.
Fortunately, the company has the best balance sheet in the industry. Book value is $12 a share and growing, the company has zero long-term debt; however its net profit margins (2.4 percent this year) can't hold a candle to Dell and Hewlett-Packard, each with margins over 6 percent.
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I'm not an AAPL computer devotee anymore. I think it's the best on the market, but when you only need to travel between 50 and 75 mph, why purchase something with a 200 mph capacity? And I wouldn't buy the stock, either. I think the current $35.70 price is too high and when Wall Street begins to understand AAPL's income statement, I think shares could fall to the low $20s. Stay away for another day.
I'm not an AAPL computer devotee anymore. I think it's the best on the market, but when you only need to travel between 50 and 75 mph, why purchase something with a 200 mph capacity? And I wouldn't buy the stock, either. I think the current $35.70 price is too high and when Wall Street begins to understand AAPL's income statement, I think shares could fall to the low $20s. Stay away for another day.
Any stock heads want to comment. This talk is beyond my grasp. I'd never dispute the claims that Dell and HP are much bigger and have deeper product lines. That's easy to see. However if I was a prospective investor I wouldn't exactly feel comfortable with this mans assertions. I think it's rather presumptuous to think Wallstreet doesn't understand Apple's income statement yet the finance writer for The Beacon News seems to have everything figured out. What say ye?
Comments
One thing to look at is the Price/Earnings ratio... Apple's is a bit high, about 41 looking forward, as opposed to Dell, Microsoft, and HP, all of which are around 20. I think that if the P/E ratio is too high, then investors are looking/hoping that something not reflected in estimated earnings is coming in the future. For example, iPod/iTunes continuing to explode, maybe Mac marketshare turning upward, etc.
I think it's a bit overpriced (maybe should be closer to 30) given that I don't see enough positive upswing to offset the P/E ratio. That's my dumb analysis.
Originally posted by hmurchison
Berko's comments on whether Apple stock is a good buy
Any stock heads want to comment. This talk is beyond my grasp. I'd never dispute the claims that Dell and HP are much bigger and have deeper product lines. That's easy to see. However if I was a prospective investor I wouldn't exactly feel comfortable with this mans assertions. I think it's rather presumptuous to think Wallstreet doesn't understand Apple's income statement yet the finance writer for The Beacon News seems to have everything figured out. What say ye?
The Beacon News is not Forbes or the WSJ. The author's grasp of Apple's business seems somewhat short sighted
" But the stock was stoked by a silly iPod music player, a useless, nonproductive gimmick. AAPL sold several million of these bootless devices from which users can download hard rock, acid rock, hot rock, gangster rock, rap, etc. at 99 cents a pop, from which AAPL makes a penurious profit of pennies on each download.''
An incredibly naive description of what the iPod is all about
My own view of its lofty price compared to HP and Dell is based on what
the market EXPECTS IT TO DO. Apple's PE ratio of 58 for the current year is
high compared to other hardware producers.( DELL 30 and HP 17) But Apple stock has one thing that the market loves ___MOMENTUM. Dell and HP do not. Judging by recent volume on the stock and the volume and premiums on AAPL options, the market is not only expecting great results in October from the CFO but optimistic guidance into 2005. Apple is cooking on all burners. Even the threat of a massive $$$ settlement with the Beatles Apple label may be turned into a coup if they make a deal on exclusive iTMS listing as Variety has suggested.
As of yesterday HP had a market value of $56 billion, Dell $ 87.5 billion and Apple about $10 billion ( $14.3 billion less $4 billion cash on hand) If ever the tide turns and switching becomes a reality, and we will get a hint of this from Apple's CFO in October, then the money managers, mutual funds etc. will pile on.
With 2 % market share and the world becoming aware of the pain of owning windows, Apple stock has no place to go but up...how far I leave to your imagination. My guess is over $60 within a year barring a major recession or anything happening to SJ
Originally posted by snipe
With 2 % market share and the world becoming aware of the pain of owning windows, Apple stock has no place to go but up
i thought apple had 5-6% of the market share?
Originally posted by mattjohndrow
i thought apple had 5-6% of the market share?
If I remember correctly, apple has, upto 10% of the installed base, but only about 2% of the computers sold each quarter are macs. But I could be completely wrong
Originally posted by iPoster
Dell and HP with profit margins greater than Apples? I'd like to know who's cooking those books!!
DELL SERVERS==$$$$$$$$$
HP PRINTERS/CARDS and calculators and servers==$$$$$$$$$
after thought
DONT FORGET EXTENDED WARENTIES.... and commercial services.
Originally posted by Wrong Robot
If I remember correctly, apple has, upto 10% of the installed base, but only about 2% of the computers sold each quarter are macs. But I could be completely wrong
ahh, i c, thanks for clearing that up
Originally posted by a_greer
DELL SERVERS==$$$$$$$$$
HP PRINTERS/CARDS and calculators and servers==$$$$$$$$$
after thought
DONT FORGET EXTENDED WARENTIES.... and commercial services.
Not just Dell servers, but they completely cut out the middleman except for outlet and some business sales.
And yes, HP rides on its consumables.
Originally posted by mattjohndrow
i thought apple had 5-6% of the market share?
2 percent world wide. It is higher in U.S.