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Apple profits soar 95% on 18.65M iPhones, 4.69M iPads and 3.76M Macs - Page 2

post #41 of 97
Quote:
Originally Posted by Apple/// View Post

Okay so $26.74 billion for quarter number one and $24.67 billion for quarter number two, what do you think we are looking at for the year...? Well over 100 Billion...?

The street thinks $100.75B revenue and $23.03 EPS.

My guess is that revenue will be closer to $107B and $27.50 EPS.
post #42 of 97
Quote:
Originally Posted by Askew View Post

Poor beleaguered Apple.

Back when Apple was hovering around $11-12/share (before the split), I was telling all my friends to buy some Apple stock because of the potential of the iPod.

Not one person followed my advice. Several even assured me that Apple would be out of business "within five years, tops" because of Microsoft's "Longhorn" OS.

Even my own father decided to buy Microsoft stock instead because the experts told him Microsoft was about to boom again and Apple was about to go under.


Back in late 2000 my Boss said he had MS stock. I commented he ought to dump the MS stock and buy Apple and Apple would be bigger than MS in fifteen years (it only took 10 years since I wouldn't have guessed the iPod, iPhone and iPad would come along). But he did buy me a Mac(PM G3) in 1999 when the 20 some other computers in our offices were PC's.
post #43 of 97
This represents earnings from last quarter. Not now. Expect another blockbuster quarter next time.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #44 of 97
Quote:
Originally Posted by Dr Millmoss View Post

After-hours trading is thin and a notoriously poor indicator of a stock's direction. We'll know tomorrow if the news holds up. It would be great if AAPL could catch up the rest of the market.

As of about 30 minutes ago, Apple's after hours trading numbers were over 4 million. i don't know what it is now. That's a lot for after hours. The stock is now up by $13.73 to $356.14.
post #45 of 97
Quote:
Originally Posted by asdasd View Post

idc predicts 74% in smartphone market - iphone must be beating the market then.

113%.
post #46 of 97
Quote:
Originally Posted by asdasd View Post

They could do much better than that . Assume 110% growth throughout the year and you get much higher. December would be 32 million alone. I would see 100-110 M. With cheaper models they would be much higher.

They expect June iPhone sale to rise"significantly"; their words. Perhaps something on the OS upgrade will enhance sales a lot.
post #47 of 97
Quote:
Originally Posted by djsherly View Post

All in all, amazing numbers. The odd one out is iPad. Or rather, how iPad sales and the comments by the executive gel with wait times for the product.

Ie lower than expected sales (not broken down iPad v iPad 2) v improved availability?

This is more puzzling given the supposed supply constraints out of Japan.

Two possibilities spring to mind.

1. Supply has amped up considerably despite supposed supply constraints.
2. Demand is not as strong as expected.

Perhaps the iPad as a general computing device may not be a two year refresh cycle for consumers?

Thoughts?

It was explained in the call. They had a bit less than two weeks of iPad 2 selling time in the quarter. They couldn't make enough, and they would have liked to have been able to make "a lot more".

As we now have a new model replacing an old model, we see the same situation we see with Apple's other products. Sales of the old model decline in the quarter leading up to the new model's arrival. Then, we're coming off the holiday quarter before, Apple's largest selling period of the year.

They expect to product much more product this current quarter, and are so confident of doing so, that they're introducing the product to over 35 new countries this quarter. Demand has been unprecedented, and there's been "the mother of an iPad backlog".
post #48 of 97
Quote:
Originally Posted by Gatorguy View Post

Which would jibe with my comment elsewhere that (I'm guessing) Apple pushed up the release of the ipad2 much sooner than originally planned to grab media attention away from scheduled press conferences by Motorola. Probably would have worked out OK except for an earthquake.

Not at all. Apple planned to release the iPad last year in March, as we should all remember, but pushed the date back because of overwhelming demand, which gave them time to produce more. They also pushed the foreign sales back a month because of that problem.

Cooke explained, today, that they have been able to produce a lot more iPad 2's than iPad 1's upon release, but it still wasn't enough.

So March is apparently the expected release date for iPads.
post #49 of 97
Quote:
Originally Posted by JackTheRat View Post

Apple will probably do over $100 billion for the year and some analyst(s) will find fault with the numbers.

It's incredible that the iPod is still selling just 9 million a quarter.

As Cook said today, supply issues are manageable, and shouldn't impact product products or costs. He also said that there could be unexpected additional problems around the 4th quarter which might. But as it stands, no.

If that's true, I expect sales for the 2011 fiscal year to be around $110 billion, and for the 2011 calender year, about $117 billion.
post #50 of 97
My wild-arsed guess for Q3:

$26.8B revenue
$6.60 EPS

with lower margins due to increased iPad sales. I'll bookmark this, just to see how badly I'm off.
post #51 of 97
Quote:
Originally Posted by melgross View Post

Not at all. Apple planned to release the iPad last year in March, as we should all remember, but pushed the date back because of overwhelming demand, which gave them time to produce more. They also pushed the foreign sales back a month because of that problem.

Cooke explained, today, that they have been able to produce a lot more iPad 2's than iPad 1's upon release, but it still wasn't enough.

So March is apparently the expected release date for iPads.

As I mentioned in a different thread, you and others are probably right. Yet I still can't shake the idea that Apple didn't plan to begin shipping iPad2's so soon until Motorola scheduled their tablet release. If they delayed the release last year to accommodate "overwhelming demand", why not this year?

When I opined in posts earlier this year that Apple might not be selling huge numbers of iPad2's and instead had few for sale, I caught some ridicule. As it was, I was pretty close to the truth. And that was well before any of the rumors of short supply began making the rounds. http://forums.appleinsider.com/showthread.php?t=121873
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post #52 of 97
Quote:
Originally Posted by melgross View Post

As of about 30 minutes ago, Apple's after hours trading numbers were over 4 million. i don't know what it is now. That's a lot for after hours. The stock is now up by $13.73 to $356.14.

You are right, that's a big number for after-hours trading -- about a quarter of an average regular session. Tomorrow should be an interesting trading session, in a good way.
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post #53 of 97
Quote:
Originally Posted by Gatorguy View Post

As I mentioned in a different thread, you and others are probably right. Yet I still can't shake the idea that Apple didn't plan to begin shipping iPad2's so soon until Motorola scheduled their tablet release. If they delayed the release last year to accommodate "overwhelming demand", why not this year?

When I opined in posts earlier this year that Apple might not be selling huge numbers of iPad2's and instead had few for sale, I caught some ridicule. As it was, I was pretty close to the truth. And that was well before any of the rumors of short supply began making the rounds. http://forums.appleinsider.com/showthread.php?t=121873

Apple couldn't care less about Motorola's plans, or Samsung's plans, or RIM's plans, or anyone's plans.

All these companies know when Apple is releasing their product, because Apple telegraphs that information, even though they don't tell exactly what they are releasing. It was Motorola and RIM that released their incomplete products as many articles and reviews have noticed, because they knew when Apple was going to introduce the iPad 2. It certainly wasn't the other way around.
post #54 of 97
Quote:
Originally Posted by djsherly View Post

All in all, amazing numbers. The odd one out is iPad. Or rather, how iPad sales and the comments by the executive gel with wait times for the product.

Ie lower than expected sales (not broken down iPad v iPad 2) v improved availability?

This is more puzzling given the supposed supply constraints out of Japan.

Two possibilities spring to mind.

1. Supply has amped up considerably despite supposed supply constraints.
2. Demand is not as strong as expected.

Perhaps the iPad as a general computing device may not be a two year refresh cycle for consumers?

Thoughts?

The iPad sales numbers alone will be enough to sink the price of AAPL tomorrow (even though it is already deeply oversold).

I'd like to hear more forward statements concerning sales of the iPad.

I, for one, don't think there is a problem and think the numbers are quite good considering that, for the most part, iPad 1 sales would have been in the toilet by February and then iPad 2 numbers only covered 2 weeks of the quarter. A better indicator will be Q3 numbers for the iPad.
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post #55 of 97
Quote:
Originally Posted by Dr Millmoss View Post

You are right, that's a big number for after-hours trading -- about a quarter of an average regular session. Tomorrow should be an interesting trading session, in a good way.

An article you will be interested in from the day before on why Apple's shares should pop, and what happens if they don't. I happen to agree with the analysis, so it makes it a very good article for me. I hope it will be for you as well, and including everyone else here.

http://tech.fortune.cnn.com/2011/04/...ce=yahoo_quote
post #56 of 97
Quote:
Originally Posted by island hermit View Post

The iPad sales numbers alone will be enough to sink the price of AAPL tomorrow (even though it is already deeply oversold).

I'd like to hear more forward statements concerning sales of the iPad.

I, for one, don't think there is a problem and think the numbers are quite good considering that, for the most part, iPad 1 sales would have been in the toilet by February and then iPad 2 numbers only covered 2 weeks of the quarter. A better indicator will be Q3 numbers for the iPad.

I don't agree. The reasons for this were asked for, and replied to very well during the call, and that's helped to contribute to the rise in the shares after hours. Read my previous post in answer to this to see why.
post #57 of 97
Quote:
Originally Posted by melgross View Post

I don't agree. The reasons for this were asked for, and replied to very well during the call, and that's helped to contribute to the rise in the shares after hours. Read my previous post in answer to this to see why.

Actually, I don't agree either... the second part of my comment says exactly what you are saying... but when have analysts ever been logical. I've seen big after hours numbers before and at opening only to see the stock sink as the days wears on.
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post #58 of 97
Quote:
Originally Posted by melgross View Post

An article you will be interested in from the day before on why Apple's shares should pop, and what happens if they don't. I happen to agree with the analysis, so it makes it a very good article for me. I hope it will be for you as well, and including everyone else here.

http://tech.fortune.cnn.com/2011/04/...ce=yahoo_quote

Excellent work once again from Andy. Thanks for the reference. SO, where's our dividend?

Yes, I tend to agree with the analysis, though I think perhaps he's overstated the possible outcomes of AAPL trading under 300. The next few days will tell whether the markets are convinced by the growth numbers Apple continues to post or are going to continue to compress valuations to ridiculously low levels. One thing I've learned about the markets from hard experience: just because a thing is ridiculous, doesn't mean it won't happen.
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post #59 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Excellent work once again from Andy. Thanks for the reference. SO, where's our dividend?

Yes, I tend to agree with the analysis, though I think perhaps he's overstated the possible outcomes of AAPL trading under 300. The next few days will tell whether the markets are convinced by the growth numbers Apple continues to post or are going to continue to compress valuations to ridiculously low levels. One thing I've learned about the markets from hard experience: just because a thing is ridiculous, doesn't mean it won't happen.

One thing I found interesting, assuming it wasn't a mistake, was the statement that cash and investments were $55.8 billion. Considering that they generated over $6 billion in cash this quarter, I would have expected it to be 68.5 billion. They're spending money this year, as they explained, but this discrepancy is interesting.
post #60 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Excellent work once again from Andy. Thanks for the reference. SO, where's our dividend?

Yes, I tend to agree with the analysis, though I think perhaps he's overstated the possible outcomes of AAPL trading under 300. The next few days will tell whether the markets are convinced by the growth numbers Apple continues to post or are going to continue to compress valuations to ridiculously low levels. One thing I've learned about the markets from hard experience: just because a thing is ridiculous, doesn't mean it won't happen.

Apparently a lot of fund managers dropped Apple shares in anticipation of the NASDAQ 100 re jiggling. I suspect they'll change their minds shortly.
post #61 of 97
Quote:
Originally Posted by melgross View Post

One thing I found interesting, assuming it wasn't a mistake, was the statement that cash and investments were $55.8 billion. Considering that they generated over $6 billion in cash this quarter, I would have expected it to be 68.5 billion. They're spending money this year, as they explained, but this discrepancy is interesting.

Good catch. I was looking for the cash figure but had not seen it quoted anywhere. But an expenditure of that magnitude, I think we'd have heard something.

Quote:
Originally Posted by melgross View Post

Apparently a lot of fund managers dropped Apple shares in anticipation of the NASDAQ 100 re jiggling. I suspect they'll change their minds shortly.

I'm not so sure. They buy into trends. If the momentum comes back, sure.
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post #62 of 97
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Originally Posted by backtomac View Post

Numbers look great to me but I wonder how the street will view them.

The iPad number isn't astronomically high so some analysts may fret over this.

The glass is 14% empty. The sky is on it's way down. Apple is doomed.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #63 of 97
Quote:
Originally Posted by Dr Millmoss View Post


I'm not so sure. They buy into trends. If the momentum comes back, sure.

They still have to do some due diligence. And they can't ignore Apple's bottom line. I think the NASDAQ adjustment was a mistake. If anything, it should have given Apple a larger portion. Ms's valuation is shrinking, not growing. I believe this was a political move.

At any rate, it won't have a lasting effect on Apple shares. I feel sure about that.
post #64 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Excellent work once again from Andy. Thanks for the reference. SO, where's our dividend?

Yes, I tend to agree with the analysis, though I think perhaps he's overstated the possible outcomes of AAPL trading under 300. The next few days will tell whether the markets are convinced by the growth numbers Apple continues to post or are going to continue to compress valuations to ridiculously low levels. One thing I've learned about the markets from hard experience: just because a thing is ridiculous, doesn't mean it won't happen.

I enjoyed Andy's article, too. I don't think there's much point, though, in going through the ramifications of a drop below a p/e of 18 as if it were a violation of some sacred rule. It is what it is, and by that I mean, this was an unusual quarter for Apple, with 3 big shocks in a row right before earnings that dragged its p/e down to 18 . Given the extraordinary nature of these events and their timing just before earnings, it seems reasonable that the stock will take a while to recover beyond a p/e of 18. After all, now that the 12 month eps is 20.98 , in order for Apple to move from its closing price today of 342.41 to maintain a p/e of 18 tomorrow, it will have to rise 10%. that's a lot to ask . I think that it will make its way closer to a p/e of 20 over the next few months, though.
post #65 of 97
Quote:
Originally Posted by melgross View Post

One thing I found interesting, assuming it wasn't a mistake, was the statement that cash and investments were $55.8 billion. Considering that they generated over $6 billion in cash this quarter, I would have expected it to be 68.5 billion. They're spending money this year, as they explained, but this discrepancy is interesting.

Don't know who is right but Ars is reporting 65.8 billion in cash and securities. http://arstechnica.com/apple/news/20...nings-call.ars
Page 3 of live blog.
post #66 of 97
Quote:
Originally Posted by joshdean View Post

I don't think there's much point, though, in going through the ramifications of a drop below a p/e of 18 as if it were a violation of some sacred rule. It is what it is ...

I agree with you. As an AAPL investor my emotions tell me the P/E "should" go above 20, but as a realist I think it's unlikely. I expect the P and the E to climb in the next few years, but I expect the P/E to decline. I'm not sure if this is because of the Law of Large Numbers, but rather it's because of the fact there are a finite number of dollars in the world. The bigger AAPL's market cap, the more speculative dollars it requires for a large P/E, and it's only natural that investors will speculate more freely with smaller amounts of money. (Maybe it's a corollary to the LoLN.)
post #67 of 97
Quote:
Originally Posted by backtomac View Post

Don't know who is right but Ars is reporting 65.8 billion in cash and securities. http://arstechnica.com/apple/news/20...nings-call.ars
Page 3 of live blog.

That is, indeed, the right number: http://www.apple.com/pr/library/2011/04/20results.html

The breakdown is: Cash and Equivalents $15,978, Short-term Marketable Securities $13,256, and Long-term Marketable Securities $36,533, for a total 'cash' balance of $65,767 ≈ $65.8B.

Someone mis-spoke.
post #68 of 97
Quote:
Originally Posted by anantksundaram View Post

That is, indeed, the right number: http://www.apple.com/pr/library/2011/04/20results.html

The breakdown is: Cash and Equivalents $15,978, Short-term Marketable Securities $13,256, and Long-term Marketable Securities $36,533, for a total 'cash' balance of $65,767 ≈ $65.8B.

Someone mis-spoke.

That seems closer to what I expected. I was watching three live blogs on this though, and all three said $55.8. I figured if all three said that, it should be correct.
post #69 of 97
Quote:
Originally Posted by joshdean View Post

I enjoyed Andy's article, too. I don't think there's much point, though, in going through the ramifications of a drop below a p/e of 18 as if it were a violation of some sacred rule. It is what it is, and by that I mean, this was an unusual quarter for Apple, with 3 big shocks in a row right before earnings that dragged its p/e down to 18 . Given the extraordinary nature of these events and their timing just before earnings, it seems reasonable that the stock will take a while to recover beyond a p/e of 18. After all, now that the 12 month eps is 20.98 , in order for Apple to move from its closing price today of 342.41 to maintain a p/e of 18 tomorrow, it will have to rise 10%. that's a lot to ask . I think that it will make its way closer to a p/e of 20 over the next few months, though.

Andy wasn't saying that it violated some rule. He wasn't hinting that either. It's just that Apple is undervalued by a lot. His reasoning is pretty good. If the stock drops below some value, with the cash on hand, the high net margins, and the forward earnings potential and sales increases could make the company a takeover target. Not to say it would happen, but I've seen stranger deals made than that.

In addition a companies valuation isn't normally an island. It's also relative to how other companies in the industry are valued according to their performance and expectations. With this metric, again, Apple is undervalued.

Rising 10% isn't a lot when you consider it recently dropped over 10%.
post #70 of 97
Quote:
Originally Posted by joshdean View Post

I enjoyed Andy's article, too. I don't think there's much point, though, in going through the ramifications of a drop below a p/e of 18 as if it were a violation of some sacred rule. It is what it is, and by that I mean, this was an unusual quarter for Apple, with 3 big shocks in a row right before earnings that dragged its p/e down to 18 . Given the extraordinary nature of these events and their timing just before earnings, it seems reasonable that the stock will take a while to recover beyond a p/e of 18. After all, now that the 12 month eps is 20.98 , in order for Apple to move from its closing price today of 342.41 to maintain a p/e of 18 tomorrow, it will have to rise 10%. that's a lot to ask . I think that it will make its way closer to a p/e of 20 over the next few months, though.

Not a rule, but at the lower end of a historical range, which creates a floor he reasons that AAPL has no reason to break through. So far so good, but what Andy doesn't say in this article at least (but the chart shows somewhat) is that AAPL's P/E has been compressing for some time now. You can also see how much investors are discounting earnings growth by looking at PEG, which is at a quite low 0.74. For points of comparison, try DELL at 1.87, MSFT at 0.96, GE at 1.26 and AMZN at 2.21. If you go ex-cash the numbers are even more dramatic. It's been that way for a long time -- investors just don't seem to be entirely buying Apple's earnings growth story, no matter how long it goes on. It's not very logical, but nobody said the markets are logical.
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post #71 of 97
Quote:
Originally Posted by melgross View Post

Andy wasn't saying that it violated some rule. He wasn't hinting that either. It's just that Apple is undervalued by a lot. His reasoning is pretty good. If the stock drops below some value, with the cash on hand, the high net margins, and the forward earnings potential and sales increases could make the company a takeover target. Not to say it would happen, but I've seen stranger deals made than that.

In addition a companies valuation isn't normally an island. It's also relative to how other companies in the industry are valued according to their performance and expectations. With this metric, again, Apple is undervalued.

Rising 10% isn't a lot when you consider it recently dropped over 10%.

Sure he was. To say a stock is undervalued is meaningless except by reference to some standard or frame of reference one has in mind to organize or 'rule' the data.
The question is, if investors ignore this standard in pricing a stock, are they being irrational? If the metrics that are used to determine a stock's fair value don't jibe with its actual price, is it the responsibility of investors to get in line with those metrics, or might it be more useful to transform and enrich those standards so that they better take into account the actual behavior of investors? Isn't it like rules of grammar, wherein fixed bibles of language rules are created in an attempt to corral an organic and constantly evolving instrument of communication?
I believe the adage 'the customer is always right' applies to stock valuation. It may be tempting to dismiss investor behavior that doesn't conform to the conventions that are assumed to determine a stock's value as due to ignorance or manipulation, but this can blind one to legitimate and important factors that come into play in real-world perception of company value. It could turn out to be the accepted metrics which aren't quite as 'rational' as they were thought to be.
post #72 of 97
Alex Gauna has proven to be a stock manipulator - he ought to be fined, jailed, and demoted for his incompetent, destructive, and baseless FUD.
post #73 of 97
Quote:
Originally Posted by joshdean View Post

Sure he was. To say a stock is undervalued is meaningless except by reference to some standard or frame of reference one has in mind to organize or 'rule' the data.
The question is, if investors ignore this standard in pricing a stock, are they being irrational? If the metrics that are used to determine a stock's fair value don't jibe with its actual price, is it the responsibility of investors to get in line with those metrics, or might it be more useful to transform and enrich those standards so that they better take into account the actual behavior of investors? Isn't it like rules of grammar, wherein fixed bibles of language rules are created in an attempt to corral an organic and constantly evolving instrument of communication?
I believe the adage 'the customer is always right' applies to stock valuation. It may be tempting to dismiss investor behavior that doesn't conform to the conventions that are assumed to determine a stock's value as due to ignorance or manipulation, but this can blind one to legitimate and important factors that come into play in real-world perception of company value. It could turn out to be the accepted metrics which aren't quite as 'rational' as they were thought to be.

You're stretching things here. I don't think you actually understand what we're saying.
post #74 of 97
Quote:
Originally Posted by melgross View Post

You're stretching things here. I don't think you actually understand what we're saying.

Perhaps, but I do tend to agree with this:

Quote:
Originally Posted by joshdean View Post

I believe the adage 'the customer is always right' applies to stock valuation. It may be tempting to dismiss investor behavior that doesn't conform to the conventions that are assumed to determine a stock's value as due to ignorance or manipulation, but this can blind one to legitimate and important factors that come into play in real-world perception of company value. It could turn out to be the accepted metrics which aren't quite as 'rational' as they were thought to be.

Stocks are worth what the markets say they are worth at any given moment, not any more nor any less. This concept should be obvious to any investor, but apparently not -- I've had to point this out many times myself, mainly to frustrated novice investors who prefer to attribute every move to the downside to some sort of conspiracy. Market pricing is all about fear, greed and (if you make the effort) educated guesswork. The markets have been guessing for some time that Apple's earnings growth story can't go on forever -- the rule of large numbers, and all that. This is hardly surprising, given the historic nature of this growth. So PE gets compressed as confidence in continuing this growth rate wanes.

Even fans of Apple have to acknowledge that the company is in uncharted territory. They are becoming a industrial juggernaut of virtually unheard of proportions. Nobody can rightly know how this will turn out, so the markets collectively hedge their bets.
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post #75 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Perhaps, but I do tend to agree with this:



Stocks are worth what the markets say they are worth at any given moment, not any more nor any less. This concept should be obvious to any investor, but apparently not -- I've had to point this out many times myself, mainly to frustrated novice investors who prefer to attribute every move to the downside to some sort of conspiracy. Market pricing is all about fear, greed and (if you make the effort) educated guesswork. The markets have been guessing for some time that Apple's earnings growth story can't go on forever -- the rule of large numbers, and all that. This is hardly surprising, given the historic nature of this growth. So PE gets compressed as confidence in continuing this growth rate wanes.

Even fans of Apple have to acknowledge that the company is in uncharted territory. They are becoming a industrial juggernaut of virtually unheard of proportions. Nobody can rightly know how this will turn out, so the markets collectively hedge their bets.

That's obvious though. It holds true for housing prices too. Actually, it holds true for every product and service, so it's not a major observation. But nevertheless, the market normally corrects for companies that are too over or undervalued. They don't get it 100% correct, but over time, they come close enough. And right now, going from the numbers at this time, Apple is at about a PE of 20. We had a short period of unbalance, and it's moving back in balance. Over a longer time period, that balance will materialize. Over short time periods, anything can happen.

I wish I had some more liquidity, because when the stock was below 332 I was thinking of buying more, but I didn't have enough cash to buy as much as I thought worthwhile, as I had other plans.

I think that people who look at these very short deviations, and think something significant is meant by them, are people who don't understand how any of this works. I came across the same people during the recession, when fund managers were dumping the stock. I happily bought into their losses.
post #76 of 97
Quote:
Originally Posted by melgross View Post

That's obvious though. It holds true for housing prices too. Actually, it holds true for every product and service, so it's not a major observation. But nevertheless, the market normally corrects for companies that are too over or undervalued. They don't get it 100% correct, but over time, they come close enough. And right now, going from the numbers at this time, Apple is at about a PE of 20. We had a short period of unbalance, and it's moving back in balance. Over a longer time period, that balance will materialize. Over short time periods, anything can happen.

I wish I had some more liquidity, because when the stock was below 332 I was thinking of buying more, but I didn't have enough cash to buy as much as I thought worthwhile, as I had other plans.

I think that people who look at these very short deviations, and think something significant is meant by them, are people who don't understand how any of this works. I came across the same people during the recession, when fund managers were dumping the stock. I happily bought into their losses.

Fund managers are on a completely different program. Often, literally a computer program. They're happy to net a few percentage points on any given stock in any given quarter. Looks good on their books at the end of the quarter.

I'm sure we've discussed this before, but I've never really been on board with the concept of overvalued and undervalued. The market sets value every day, so in reality we are collectively setting the exact value of any stock at any given moment. Looking at it any other way IMO is a formula for driving yourself crazy.

I'm not sure if yesterday's numbers are factored into the currently posted PE for AAPL yet.
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post #77 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Fund managers are on a completely different program. Often, literally a computer program. They're happy to net a few percentage points on any given stock in any given quarter. Looks good on their books at the end of the quarter.

I'm sure we've discussed this before, but I've never really been on board with the concept of overvalued and undervalued. The market sets value every day, so in reality we are collectively setting the exact value of any stock at any given moment. Looking at it any other way IMO is a formula for driving yourself crazy.

I'm not sure if yesterday's numbers are factored into the currently posted PE for AAPL yet.

We can discuss what "value" actually means, I suppose. But as I've been saying, it tends to move about where it should. At least that's true for most companies. I really don't understand how so e companiesmcan be valued so highly that they have PEs of 50, or 100, or even higher. We can look at Sirius XM Radio, with a PE of 193. This is a company with very shaky financials, an uncertain growth cycle, and a dependence on one major show for most of its profits. So it it properly valued just because its stock is so high? Not really. It could collapse at any time, and likely will.

This on Apple, interesting:

http://tech.fortune.cnn.com/2011/04/...ays-its-sorry/
post #78 of 97
Quote:
Originally Posted by Dr Millmoss View Post

Fund managers are on a completely different program. Often, literally a computer program. They're happy to net a few percentage points on any given stock in any given quarter. Looks good on their books at the end of the quarter.

I'm sure we've discussed this before, but I've never really been on board with the concept of overvalued and undervalued. The market sets value every day, so in reality we are collectively setting the exact value of any stock at any given moment. Looking at it any other way IMO is a formula for driving yourself crazy.

I'm not sure if yesterday's numbers are factored into the currently posted PE for AAPL yet.

If you think Apple was undervalued as of Tuesday, you may have to prepare yourself for a new era of dissonance with investors. It looks to me, as of market close on April 21, like 16-17 will be the new 'normal' p/e for Apple. Here's a list of highest and lowest p/e's since Oct. 2009. Notice that for each quarter, p/e tends to peak in either the run-up to earnings or just after earnings.It's hard to imagine what catalysts between now and September would be able to raise it much beyond 18 if yesterday's blowout earnings couldn't do it.Is there any possibility that the qqq rebalancing is still having an effect? If not, we may be witnessing another sea-change in investor sentiment concerning Apple. Call it undervaluation if you want, but don't hold your breath waiting for it to to make its way back to the p/e rang of 20.

Apple P/E:
(eps:9?)
Oct. 22,2009:22.80
Oct. 30,2009:20.94
Jan. 19,2010:23.90

(eps:10.24)
Jan. 27,2010:20.30
Feb. 4,2010:18.75
Apr 15,2010:24.30

(eps:11.78)
Apr. 23,2010:22.99
May 7, 2010:20.02
June 18,2010:23.26

(eps:13.28)
July 27,2010:19.88
Aug 24,2010:18.06
Oct. 18,2010:23.94

(eps:15.15)
Oct. 20,2010:20.50
Nov. 17,2010:19.83
Jan. 14,2011:23.00

(eps:17.92)
Jan 21,2011:18.23
Jan. 26,2011:19.19
Feb. 16,2011:20.26
Apr. 15,2011:18.27

(eps:20.98)
Apr. 21,2011:16.72
post #79 of 97
Quote:
Originally Posted by melgross View Post

We can discuss what "value" actually means, I suppose. But as I've been saying, it tends to move about where it should. At least that's true for most companies. I really don't understand how so e companiesmcan be valued so highly that they have PEs of 50, or 100, or even higher. We can look at Sirius XM Radio, with a PE of 193. This is a company with very shaky financials, an uncertain growth cycle, and a dependence on one major show for most of its profits. So it it properly valued just because its stock is so high? Not really. It could collapse at any time, and likely will.

I see you're still looking for logic.

Truly, it is difficult to know how a PE in stratosphere can be justified by any logic, but again, the market is speaking in the only way it knows how. I suppose you'd have to call it a willingness on the part of investors to make a long-shot bet, with the hopes of getting in early on a big future growth story. I'll bet RIMM was selling in this PE range ten or so years ago. I actually had that stock on my watch list for a long time, before anybody had heard of the Blackberry, but I thought it was too risky and expensive, so I never bought in. A small bet in that direction would have netted me handsomely. Also, when I bought AAPL in 1997 it posted a PE of N/A since they'd had unprofitable quarters, many of them actually. That wasn't a purchase made on the fundamentals. It was made by feel, not logic.


The same old apologists, not apologizing!

Quote:
Originally Posted by joshdean View Post

If you think Apple was undervalued as of Tuesday, you may have to prepare yourself for a new era of dissonance with investors. It looks to me, as of market close on April 21, like 16-17 will be the new 'normal' p/e for Apple. Here's a list of highest and lowest p/e's since Oct. 2009. Notice that for each quarter, p/e tends to peak in either the run-up to earnings or just after earnings.It's hard to imagine what catalysts between now and September would be able to raise it much beyond 18 if yesterday's blowout earnings couldn't do it.Is there any possibility that the qqq rebalancing is still having an effect? If not, we may be witnessing another sea-change in investor sentiment concerning Apple. Call it undervaluation if you want, but don't hold your breath waiting for it to to make its way back to the p/e rang of 20.

What you have charted here so well is the compression of AAPL's PE over the last few years. Some of the analysts are being honest in saying that even if this process continues, the stock should still rise, so long as earning growth outstrips the multiples compression. As investors we'd just have get used to the idea that doubling earnings does not double stock price. So then what happens when earnings don't double? Now, there's the rub.

What we seem to be witnessing is the transition of AAPL from growth to value. Painful to watch while it's still very much a growth story.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #80 of 97
Quote:
Originally Posted by Dr Millmoss View Post

I see you're still looking for logic.

Truly, it is difficult to know how a PE in stratosphere can be justified by any logic, but again, the market is speaking in the only way it knows how. I suppose you'd have to call it a willingness on the part of investors to make a long-shot bet, with the hopes of getting in early on a big future growth story. I'll bet RIMM was selling in this PE range ten or so years ago. I actually had that stock on my watch list for a long time, before anybody had heard of the Blackberry, but I thought it was too risky and expensive, so I never bought in. A small bet in that direction would have netted me handsomely. Also, when I bought AAPL in 1997 it posted a PE of N/A since they'd had unprofitable quarters, many of them actually. That wasn't a purchase made on the fundamentals. It was made by feel, not logic.



The same old apologists, not apologizing!

I'm looking for some consistency. I tend to be consistent. That's the way you make money, as long as your ideas work, of course. I had Apple in the '90's, on and off, and did pretty well. But then, almost anything in the mid to late '90's made money.

I don't see a couple of points in PE as being a problem. In fact, I never like a company to get too far ahead. Whenever Apple was sitting at 35, I became nervous. I do think Apple should be at 20. I would feel comfortable at that. Apple isn't an old line manufacturing company that sits at 10. And 10 is low by historical standards.

The main reason why Apple isn't higher is the reason we all know. The law of large numbers. There were people who felt Apple would bump against it last year, but they didn't. So they were (are) sure they would hit it this year, but so far, they've gone in the other direction.

Unless Apple comes up with a major new(for them) product category, they will likely hit it next year. I can see sales of the phone and iPad increasing by a great amount, but it would likely limit Apple's growth in 2012 to no more than about 25 to 40%. a lot lower than this year. But that's still an enormous amount for a company so large. Then growth will slowly taper off.

It's still is no reason for the PE to drop now. If next quarter is another blowout, then I'm sure the stock will rise quickly for the rest of the year. I still expect at least $450 by the end of the calendar year.


Quote:
What you have charted here so well is the compression of AAPL's PE over the last few years. Some of the analysts are being honest in saying that even if this process continues, the stock should still rise, so long as earning growth outstrips the multiples compression. As investors we'd just have get used to the idea that doubling earnings does not double stock price. So then what happens when earnings don't double? Now, there's the rub.

What we seem to be witnessing is the transition of AAPL from growth to value. Painful to watch while it's still very much a growth story.

Of course, what he charted is arbitrary. When that's done, the numbers can show anything. In addition, except for a couple of outliers, the PE now isn't that different from his first numbers. We tend to see trends that don't exist, or that are minor. Humans are built to make connections between things that aren't connected.
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