Market cap is misleading. Look at Enterprise Value which strips out excess cash and adds back debt outstanding. This is the real price a company's profit-generating assets are worth to the market. Apple's EV (as of 12:40 EST) is $364.8B vs. $377.6B for XOM and $211.5B for MSFT.
Why did the stock go up $17 so far today?! What happened last night to do this? It's a normal day; it's supposed to go up by $1 at most and down by $4-10 like the insane ramblers believe.
Probably the firming up of the iPad3 release date rumors, but I wouldn't spend a lot time trying to figure out day-to-day moves, or even week-to-week. The tendency is to get really focused on these instant numbers just because we are able to get constant readouts, but it's a trap investors should not fall into.
Probably the firming up of the iPad3 release date rumors, but I wouldn't spend a lot time trying to figure out day-to-day moves, or even week-to-week. The tendency is to get really focused on these instant numbers just because we are able to get constant readouts, but it's a trap investors should not fall into.
It will fall back somewhat once the iPad 3 is a massive sell out hit. It never fails...
1 option lot is the same has owning 100 shares of the stock. The problem with option is premium and the greeks. If you dont understand them you could get own and lose a ton of money. But if you buy 1 year from expiration options (LEAPS), and go 10% of the stock price in the money, you will reduce the effect of the premiums and wont have to bother with them.
But its very important to do roll ups has the stock rise to take out profits. You take the profits and buy more dividend stock with them.
Note that stock price variation go both ways, if the stock drop, options prices will drop to a much greater % than stocks because of the leverage. You own large amount of stocks for a small price, so variation are amplified both ways.
imo anyone playing with options need to learn about them, especially when trading close to expiration options.
In youre example you could had turn that 1000$ to 200 000$ easy. Easy to say after the fact because we know the stock went from 200$ to almost 500$. But when you invest you never know what will happen, so the stress can get pretty high.
I was recently thinking about investing a little bit of money and picking up some AAPL, I don't own any AAPL from before. I'd been thinking about it everyday this past week, and the stock has just kept on rising and rising, so I never did buy in, because I was hoping for a slight downturn and I don't have much experience with the market. And now the stock skyrockets today!
I think that I need to start one of those retarded rumors and try to manipulate the stock price down, so then I can buy in.
You all do know that the iPad 3 is going to flop don't you? I heard that it's going to be thicker than the previous model and also yep, here's the biggie, it's not going to have a retina display! And yes, it's still a toy. Samsung is going to take over the tablet lead from Apple in 3 months time. Please repeat this rumor on all forums and blogs that you can find. It's from very reliable sources ( I pulled it out of my ass), but there's enough dumb people out there that will believe anything. And also, I heard that Apple is a very inhumane company, with all of that evil China business and worker abuse taking place. So any shrewd investor would surely not hang on to such a immoral stock.
But seriously, I do hope that the stock goes down slightly, because I was actually thinking about entering the market soon and I'd prefer to buy in at a lower price, since I know zilch about the market.
I just sold the 10k shares I bought at $8. I AM LYING
Shame on you believing in a company, taking a risk, and profiting handsomely from it! The Occupy folks are going to put a bullseye on your forehead. How dare you make money!!
Uncle Sam thanks you for the taxes you're going to pay on the gains. Bravo to you Solips!
I just about burped last-night's dinner when I saw the stock price this morning. My chunk of change in AAPL will still be marinating for a while longer. I think the stock price has a wee bit more to go before the steam begins to run out.
Are you still in the AAPL game or did you completely cash out?
[Edit -Dang you Solips!!! You got me too!!! I didn't know you could erase text like the government does. Are you FBI?? ]
The market capitalization is simply (Price per Share * # shares outstanding). Market caps for AAPL, XOM, MSFT, WMT, and GOOG are: 461.4B, 406.6B, 257.0B, 212.7B, and 198.4B respectively. Thus all the articles that state Apple is the most valuable company are basing their "analyses" on market capitalization. Where this falls short is that it misses the entire debt portion of a company's capital structure. As a rule debt has absolute priority over equity in a bankruptcy, and interest payments have priority over any cash flows given to equity holders.
If a company has 100B in debt outstanding, and it *also* has a market capitalization of $100B, then the market is saying this company has an equity "cushion" of $100B beyond the $100B in debt outstanding. Thus the implied value of the company is $200. If a company was only worth it's market cap (as this article seems to imply), then said company should have a stock price of $0 because all its value is owed contractually to bondholders. Note: that the above analysis assumes the company doesn't have significant excess cash on hand beyond what's required to run the business.
Enterprise value is calculated as Market Cap + Market Value of Debt Oustanding - Excess Cash. EV gets to the heart of what the operating assets of a company are being valued at. It's also how most M&A transactions get valued at, as you'll often read: "the deal was valued at 8x trailing EBITDA" where value is not market cap, but EV.
Onto the calculations:
AAPL: Market cap ($461.4) + debt ($0) - excess cash ($97B) = 363.8B EV
XOM: 406.6B + 16.8B - 46.3B = 377B EV
and so forth. MSFT has an EV of 211.5B and GOOG has an EV of 159.2B
As an aside, the reason you subtract out excess cash (of which Apple has some 97B) is because this can be considered a direct offset of debt (as the cash can be immediately used to pay down debt). Often times you'll hear EV being calculated as Market Cap + Net Debt (debt, net of cash) which is the same analysis as above. Hope this helps.
WP7 is innovative but being innovative doesn't make a product popular. . . I think MS's biggest problem with WP7 is that they decided to keep the Windows name. If they had only rebranded it they could have shed a lot of what people dislike about MS. . .
Good points. How about the yPhone and yPad using Microsoft's new yOS. I can see the MS advert slogan now: "Y Not!".
The market capitalization is simply (Price per Share * # shares outstanding). Market caps for AAPL, XOM, MSFT, WMT, and GOOG are: 461.4B, 406.6B, 257.0B, 212.7B, and 198.4B respectively. Thus all the articles that state Apple is the most valuable company are basing their "analyses" on market capitalization. Where this falls short is that it misses the entire debt portion of a company's capital structure. As a rule debt has absolute priority over equity in a bankruptcy, and interest payments have priority over any cash flows given to equity holders.
If a company has 100B in debt outstanding, and it *also* has a market capitalization of $100B, then the market is saying this company has an equity "cushion" of $100B beyond the $100B in debt outstanding. Thus the implied value of the company is $200. If a company was only worth it's market cap (as this article seems to imply), then said company should have a stock price of $0 because all its value is owed contractually to bondholders. Note: that the above analysis assumes the company doesn't have significant excess cash on hand beyond what's required to run the business.
Enterprise value is calculated as Market Cap + Market Value of Debt Oustanding - Excess Cash. EV gets to the heart of what the operating assets of a company are being valued at. It's also how most M&A transactions get valued at, as you'll often read: "the deal was valued at 8x trailing EBITDA" where value is not market cap, but EV.
Onto the calculations:
AAPL: Market cap ($461.4) + debt ($0) - excess cash ($97B) = 363.8B EV
XOM: 406.6B + 16.8B - 46.3B = 377B EV
and so forth. MSFT has an EV of 211.5B and GOOG has an EV of 159.2B
As an aside, the reason you subtract out excess cash (of which Apple has some 97B) is because this can be considered a direct offset of debt (as the cash can be immediately used to pay down debt). Often times you'll hear EV being calculated as Market Cap + Net Debt (debt, net of cash) which is the same analysis as above. Hope this helps.
Why not simply use cash to offset debt in the calculation and add what's left back? In this model had Apple had $400B in cash it would be worthless. Or am I missing something lol
2nd condescending put down today, I must be doing something right. LOL There is a historical track record of profit taking after a successful launch BTW.
I never see looking at the DOW or NASDAQ is being all that relevant to AAPL. Of course if the swing is a major catastrophe then yes, but not the day to day swings. Apple even defied the recent recession.
First on AI: Apple's stock soared to new heights on Thursday, pushing the company's market capitalization to $456 billion, a number that is greater than the values of rivals Google and Microsoft combined.
We're just seeing the tip of the iPad iceberg. Post-PC era is true, it's real, it's going to happen, it is happening. And the post-PC era isn't a tablet era, it's an iPad era.
Enterprise smartphone and tablet market might have reached an inflection point with Halli announcement (even though I hate the guts of that company, but that's immaterial), and today NOAA.
Macs at 5% (8%?) worldwide share and rising but still a long way to go.
Throw away all your rules of thumb about investing. Especially those along the lines of "it can't possibly get higher than this". Look at the numbers, look at the market potential out there, then make your best informed estimate.
And remember, this recession will not go on forever.
Comments
Market cap is misleading. Look at Enterprise Value which strips out excess cash and adds back debt outstanding. This is the real price a company's profit-generating assets are worth to the market. Apple's EV (as of 12:40 EST) is $364.8B vs. $377.6B for XOM and $211.5B for MSFT.
Can you explain how you came to those values?
Why did the stock go up $17 so far today?! What happened last night to do this? It's a normal day; it's supposed to go up by $1 at most and down by $4-10 like the insane ramblers believe.
Probably the firming up of the iPad3 release date rumors, but I wouldn't spend a lot time trying to figure out day-to-day moves, or even week-to-week. The tendency is to get really focused on these instant numbers just because we are able to get constant readouts, but it's a trap investors should not fall into.
Probably the firming up of the iPad3 release date rumors, but I wouldn't spend a lot time trying to figure out day-to-day moves, or even week-to-week. The tendency is to get really focused on these instant numbers just because we are able to get constant readouts, but it's a trap investors should not fall into.
It will fall back somewhat once the iPad 3 is a massive sell out hit. It never fails...
Crap sold at $454!
... and yet you smile. You'll be hysterical when it's at 650 I assume
1 option lot is the same has owning 100 shares of the stock. The problem with option is premium and the greeks. If you dont understand them you could get own and lose a ton of money. But if you buy 1 year from expiration options (LEAPS), and go 10% of the stock price in the money, you will reduce the effect of the premiums and wont have to bother with them.
But its very important to do roll ups has the stock rise to take out profits. You take the profits and buy more dividend stock with them.
Note that stock price variation go both ways, if the stock drop, options prices will drop to a much greater % than stocks because of the leverage. You own large amount of stocks for a small price, so variation are amplified both ways.
imo anyone playing with options need to learn about them, especially when trading close to expiration options.
In youre example you could had turn that 1000$ to 200 000$ easy. Easy to say after the fact because we know the stock went from 200$ to almost 500$. But when you invest you never know what will happen, so the stress can get pretty high.
I'll stick with the stress of owning AAPL
I just sold the 10k shares I bought at $8. I AM LYING
Chicken ...
edit: OK got me .. I saw the white text too late ... LOL But I did buy at mostly $78 and a few at 35.
I think that I need to start one of those retarded rumors and try to manipulate the stock price down, so then I can buy in.
You all do know that the iPad 3 is going to flop don't you? I heard that it's going to be thicker than the previous model and also yep, here's the biggie, it's not going to have a retina display! And yes, it's still a toy. Samsung is going to take over the tablet lead from Apple in 3 months time. Please repeat this rumor on all forums and blogs that you can find. It's from very reliable sources ( I pulled it out of my ass), but there's enough dumb people out there that will believe anything. And also, I heard that Apple is a very inhumane company, with all of that evil China business and worker abuse taking place. So any shrewd investor would surely not hang on to such a immoral stock.
But seriously, I do hope that the stock goes down slightly, because I was actually thinking about entering the market soon and I'd prefer to buy in at a lower price, since I know zilch about the market.
I just sold the 10k shares I bought at $8. I AM LYING
Shame on you believing in a company, taking a risk, and profiting handsomely from it! The Occupy folks are going to put a bullseye on your forehead. How dare you make money!!
Uncle Sam thanks you for the taxes you're going to pay on the gains. Bravo to you Solips!
I just about burped last-night's dinner when I saw the stock price this morning. My chunk of change in AAPL will still be marinating for a while longer. I think the stock price has a wee bit more to go before the steam begins to run out.
Are you still in the AAPL game or did you completely cash out?
[Edit -Dang you Solips!!! You got me too!!! I didn't know you could erase text like the government does. Are you FBI??
Crap sold at $454!
Don't worry... you should be able to pick it up again under that.
Can you explain how you came to those values?
Sure.
The market capitalization is simply (Price per Share * # shares outstanding). Market caps for AAPL, XOM, MSFT, WMT, and GOOG are: 461.4B, 406.6B, 257.0B, 212.7B, and 198.4B respectively. Thus all the articles that state Apple is the most valuable company are basing their "analyses" on market capitalization. Where this falls short is that it misses the entire debt portion of a company's capital structure. As a rule debt has absolute priority over equity in a bankruptcy, and interest payments have priority over any cash flows given to equity holders.
If a company has 100B in debt outstanding, and it *also* has a market capitalization of $100B, then the market is saying this company has an equity "cushion" of $100B beyond the $100B in debt outstanding. Thus the implied value of the company is $200. If a company was only worth it's market cap (as this article seems to imply), then said company should have a stock price of $0 because all its value is owed contractually to bondholders. Note: that the above analysis assumes the company doesn't have significant excess cash on hand beyond what's required to run the business.
Enterprise value is calculated as Market Cap + Market Value of Debt Oustanding - Excess Cash. EV gets to the heart of what the operating assets of a company are being valued at. It's also how most M&A transactions get valued at, as you'll often read: "the deal was valued at 8x trailing EBITDA" where value is not market cap, but EV.
Onto the calculations:
AAPL: Market cap ($461.4) + debt ($0) - excess cash ($97B) = 363.8B EV
XOM: 406.6B + 16.8B - 46.3B = 377B EV
and so forth. MSFT has an EV of 211.5B and GOOG has an EV of 159.2B
As an aside, the reason you subtract out excess cash (of which Apple has some 97B) is because this can be considered a direct offset of debt (as the cash can be immediately used to pay down debt). Often times you'll hear EV being calculated as Market Cap + Net Debt (debt, net of cash) which is the same analysis as above. Hope this helps.
It will fall back somewhat once the iPad 3 is a massive sell out hit. It never fails...
Yeah, somebody always has a prediction that never fails. Millions of stopped clocks can't be wrong.
Anyhow, for a bit of market reality therapy, this story ran on NPR just this morning.
http://www.npr.org/blogs/money/2012/...-mean-not-much
Something to consider.
WP7 is innovative but being innovative doesn't make a product popular. . . I think MS's biggest problem with WP7 is that they decided to keep the Windows name. If they had only rebranded it they could have shed a lot of what people dislike about MS. . .
Good points. How about the yPhone and yPad using Microsoft's new yOS. I can see the MS advert slogan now: "Y Not!".
Sure.
The market capitalization is simply (Price per Share * # shares outstanding). Market caps for AAPL, XOM, MSFT, WMT, and GOOG are: 461.4B, 406.6B, 257.0B, 212.7B, and 198.4B respectively. Thus all the articles that state Apple is the most valuable company are basing their "analyses" on market capitalization. Where this falls short is that it misses the entire debt portion of a company's capital structure. As a rule debt has absolute priority over equity in a bankruptcy, and interest payments have priority over any cash flows given to equity holders.
If a company has 100B in debt outstanding, and it *also* has a market capitalization of $100B, then the market is saying this company has an equity "cushion" of $100B beyond the $100B in debt outstanding. Thus the implied value of the company is $200. If a company was only worth it's market cap (as this article seems to imply), then said company should have a stock price of $0 because all its value is owed contractually to bondholders. Note: that the above analysis assumes the company doesn't have significant excess cash on hand beyond what's required to run the business.
Enterprise value is calculated as Market Cap + Market Value of Debt Oustanding - Excess Cash. EV gets to the heart of what the operating assets of a company are being valued at. It's also how most M&A transactions get valued at, as you'll often read: "the deal was valued at 8x trailing EBITDA" where value is not market cap, but EV.
Onto the calculations:
AAPL: Market cap ($461.4) + debt ($0) - excess cash ($97B) = 363.8B EV
XOM: 406.6B + 16.8B - 46.3B = 377B EV
and so forth. MSFT has an EV of 211.5B and GOOG has an EV of 159.2B
As an aside, the reason you subtract out excess cash (of which Apple has some 97B) is because this can be considered a direct offset of debt (as the cash can be immediately used to pay down debt). Often times you'll hear EV being calculated as Market Cap + Net Debt (debt, net of cash) which is the same analysis as above. Hope this helps.
Why not simply use cash to offset debt in the calculation and add what's left back? In this model had Apple had $400B in cash it would be worthless. Or am I missing something lol
Yeah, somebody always has a prediction that never fails. Millions of stopped clocks can't be wrong.
Anyhow, for a bit of market reality therapy, this story ran on NPR just this morning.
http://www.npr.org/blogs/money/2012/...-mean-not-much
Something to consider.
2nd condescending put down today, I must be doing something right. LOL There is a historical track record of profit taking after a successful launch BTW.
I never see looking at the DOW or NASDAQ is being all that relevant to AAPL. Of course if the swing is a major catastrophe then yes, but not the day to day swings. Apple even defied the recent recession.
First on AI: Apple's stock soared to new heights on Thursday, pushing the company's market capitalization to $456 billion, a number that is greater than the values of rivals Google and Microsoft combined.
Big deal... AAPL is only worth 4.5 x cash...
We're just seeing the tip of the iPad iceberg. Post-PC era is true, it's real, it's going to happen, it is happening. And the post-PC era isn't a tablet era, it's an iPad era.
Enterprise smartphone and tablet market might have reached an inflection point with Halli announcement (even though I hate the guts of that company, but that's immaterial), and today NOAA.
Macs at 5% (8%?) worldwide share and rising but still a long way to go.
Throw away all your rules of thumb about investing. Especially those along the lines of "it can't possibly get higher than this". Look at the numbers, look at the market potential out there, then make your best informed estimate.
And remember, this recession will not go on forever.
[Edit -Dang you Solips!!! You got me too!!! I didn't know you could erase text like the government does. Are you FBI??
Nah, he's just testing your political persuasion.....