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Apple price targets reduced as company's growth slows to 'normal' levels - Page 3

post #81 of 99

Apple needs to sign a deal with China Mobile as soon as possible, as the Chinese Android brands control 70% of China's market, in addition to Samsung's share.

Even if Apple comes up with the smart TV, they are still lagging the Samsung Smart TV. A 5 inch or bigger screen iPhone is a must.

post #82 of 99
Originally Posted by peter236 View Post
Even if Apple comes up with the smart TV, they are still lagging the Samsung Smart TV. 

 

What does this even mean? The product has never existed, does not exist, may never exist at all, and you're already claiming that it's worse than existing solutions from companies whose business model is "steal everything from everyone else"?!


A 5 inch or bigger screen iPhone is a must.

 

Yes, as in "must never do".

post #83 of 99
Quote:
Originally Posted by Mikeb85 View Post

The stock market pays my bills, university tuition, and my capital keeps growing.  I doubled up last year, and am already up around 15% this year... Although I somewhat regret selling my RIM shares when I did...  

I hope you're smart enough to not confuse luck and skill.

 

Anyway, good luck. 1wink.gif

post #84 of 99
Quote:
Originally Posted by Mikeb85 View Post

When growth slows and the company becomes 'mature', then dividends and buybacks are incentive for investors to hold on or buy more shares.  Otherwise they sell, take their profit, and move on to the next company.  

(i) That's not what he said; (ii) I actually didn't ask you that question, and I have no idea what your answer means; (iii) Ref. jragosta's post above, as an example: Are Berkshire Hathaway and Merck "mature"? (Hint: 1888; 1891 lol.gif)

 

As I said above, for your own sake, I hope you're not confusing luck with skill.

post #85 of 99

Why does everyone assume that the iPad Mini makes less profit that the iPad?

 

I ask, because the Mini has less expensive:  memory, processor, screen, battery, etc.....

 

It sells for less, but I suspect is also costs significantly less to produce....

 

Any one know for sure?

post #86 of 99
Quote:
Originally Posted by anantksundaram View Post

I hope you're smart enough to not confuse luck and skill.

 

Anyway, good luck. 1wink.gif

 

Well, these days I make around 50 trades per year, on several exchanges (mostly Hong Kong and Paris, sometimes Toronto and NY), so odds are it's more than dumb luck.  I learned my lesson when I first started, and lost quite a bit on several trades...  Since then I've had a pretty good record, and now most of my mistakes don't incur me any losses, they simply cost me a bit of gains.  

 

And though I haven't held any Apple stock recently, every trade I've made in AAPL has made me money.  

post #87 of 99
Quote:
Originally Posted by sranger View Post

Why does everyone assume that the iPad Mini makes less profit that the iPad?

 

I ask, because the Mini has less expensive:  memory, processor, screen, battery, etc.....

 

It sells for less, but I suspect is also costs significantly less to produce....

 

Any one know for sure?

I doubt that that anyone does.

 

Of course, they could lie.....

post #88 of 99
Quote:
Originally Posted by jragosta View Post


Sorry, but you're just plain wrong. Apple's market cap was higher than any company in the world last year - and they weren't offering dividends. Many large companies don't pay dividends - Google. Amazon. Berkshire Hathaway. Merck. Amgen.

There's absolutely nothing that says a company can't attract investors without dividends. In fact, history shows otherwise.
Not even close. You obviously need to stop talking about financial matters since you don't have a clue what you're talking about.

A ponzi scheme is a company which keeps taking money from new investors so it can pay existing investors a dividend or other payout. If a company is not paying a dividend, it isn't a Ponzi scheme.

 

When the only possible way to get a return on investment is to get money from the next investor, it functions like a Ponzi scheme.  Not saying that it's a literal Ponzi scheme, just trying to illustrate the fact that without a strategy of returning capital to investors, the market functions like one.  

 

However the market does return capital to investors (a lot of it actually, it's surprising because we think mostly in terms of growth stocks).  

 

I personally avoid companies that are mature and don't pay dividends, this is actually one reason I like Asian stocks, you can find many growth companies that do pay dividends.  

 

Edit - by the way, Merck does pay a dividend, and Amgen has started recently.  Google and Amazon still have plenty of growth in them before deciding to pay back investors, and Berkshire Hathaway's value is tied to their assets, not some abstract notion of growth.  

post #89 of 99
Quote:
Originally Posted by anantksundaram View Post

I doubt that that anyone does.

 

Of course, they could lie.....


Lie?

 

That never occurs around here.

Hmmmmmm...
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Hmmmmmm...
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post #90 of 99
Quote:
Originally Posted by jragosta View Post


That's OK. Neither does Wall Street.

There's absolutely no rational reason for Apple to be trading at 7 times forward, cash-adjusted P/E and dropping over 10% when they just had a record quarter and beat their guidance (as well as most of the analysts' predictions).

That's why my tagline is what it is.

See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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post #91 of 99
I'm hoping this downturn in the stock will get rid of some of the daytraders and some of the manipulation. I could give a shit less if Apple is the most valuable company in the world or if their share price is higher than Google's or whatever. I'm sick of the wild swings where any rumor, even one not credible at all sends the stock down 5%. If Apple goes from a growth stock to a value stock that's fine with me. Maybe we can finally get rid of these ridiculous expectations that no one else is ever expected to meet.
post #92 of 99
Quote:
Originally Posted by Rogifan View Post

I'm hoping this downturn in the stock will get rid of some of the daytraders and some of the manipulation. I could give a shit less if Apple is the most valuable company in the world or if their share price is higher than Google's or whatever. I'm sick of the wild swings where any rumor, even one not credible at all sends the stock down 5%. If Apple goes from a growth stock to a value stock that's fine with me. Maybe we can finally get rid of these ridiculous expectations that no one else is ever expected to meet.

daytraders don't care about the value of the stock...  daytraders need action.  Apple with it's millions of transactions a day,, and it's relatively broad ownership make it a daytraders dream.   The price of the stock means nothing, it's the movement... and they just want movement in big chunks... and they buy and sell a couple hundred (thousand) share, mostly on margin, all day long... and then clear their positions daily/weekly, to avoid margin calls.

 

The ridiculous expectations are the the stock houses trying to entice people to buy the shares the houses own.  When JPMorgan is 'pumping' apple, it's because 1) they have stock in their portfolio they want to sell, and 2) they want to generate commissions on the churn.  When they drop the price of apple they are 'out' of Apple stock and want to buy some to put back in their coffers.   These aren't the day traders per se' but the stock houses and their paid/semi-paid associates making runs on the stock.  

 

The current issue is purely the fact that even Apple won't claim a growth in profits next quarter.  With Apple always sandbagging a low number, that put analysts at a loss in terms of a number, therefore there's uncertainty, and when there's uncertainty, there is low confidence.  Apple is selling more stuff, at a very high profit margin.  But contrary to everyone else in these 'commodity' markets (phones, computers), they aren't trying to keep margins in the face of competition by lowering quality, instead, they are holding their market by lowering their margin.  

 

Almost every huge company runs into this.   Eventually, you have to lower your costs (cut people, quality of raw materials, or quality of output), or raise your prices to drive margin.  Apple is doing neither.   They are quite satisfied to make a reasonable profit (nearly 25% net), keep their quality, not overextend production lines (because an idle production line in july is likely worse than under sizing production during rollout until steady state).   Of course doing this is 'leaving' short term money on the table, as well as, not ratcheting real profit margin year over year (which is by it's nature impossible to do once you saturate the world market).

post #93 of 99
Quote:
Originally Posted by sranger View Post

Why does everyone assume that the iPad Mini makes less profit that the iPad?

 

I ask, because the Mini has less expensive:  memory, processor, screen, battery, etc.....

 

It sells for less, but I suspect is also costs significantly less to produce....

 

Any one know for sure?

 

"IHS iSuppli, which regularly tears apart electronic devices to estimate a "bill of materials," or BOM, pegged the lowest-priced iPad Mini's component costs at $188, with an additional $10 to account for manufacturing. The total of $198 does not include other costs, such as research and development, marketing or capital expenses.

 

With the 16GB iPad Mini's retail price of $329, the $131 represented a margin of nearly 40%, slightly higher than the 37% margin iSuppli estimated Apple earned on each third-generation iPad when that model debuted last March."

 

Of course, the iPad Biggi is priced much higher at $499, so a 37% margin yields substantially more: ~$185.

I got nothin'.
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I got nothin'.
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post #94 of 99
Just a thought, but giving extra large dividends only gives money to speculators who could care less about the company. They would buy, get dividend and sell on the next uptick.

SPECULATING VS INVESTING. Speculators could care less about the value of the company, that is why Amazon has a p/e of 2000 and is losing money yet its stock is soaring. Right up until the bubble bursts and then it dies.

People want the price of Apple to drop more, much more.... then of course, they will suddenly decide that Apple is really great and want the price to jump to 700 or 800. Cool, but not investing, speculating. Gambling.

Just a thought there, but Apples job to its INVESTORS is to make lots of great products and lots of money. PS, all these law suits are about keeping Samdung and others from COPING Apple products. Why innovate when everyone is free to totally steal and copy your work.

Just a thought here on a friday. Happy weekend.
post #95 of 99
Quote:
Originally Posted by peter236 View Post

Apple needs to sign a deal with China Mobile as soon as possible, as the Chinese Android brands control 70% of China's market, in addition to Samsung's share.

Even if Apple comes up with the smart TV, they are still lagging the Samsung Smart TV. A 5 inch or bigger screen iPhone is a must.


Listen, I'm not disagreeing with you as probably all would want a China Mobile deal.

However (and I'll post this in the M&E capex discussion as well), in the past, it wouldn't have mattered since Apple couldn't make iPhones, iPads or Macs fast enough.

Sure, looking ahead, this is still a major deal, but folks need to stop thinking that this past qtr was a bad one because of missing out on a deal or not launching a new product.  Apple sold everything they could possible sell using a strategy that was sound.  If there's anything that needs "fixing" it's supply chain and manufacturing.

post #96 of 99
Quote:
Originally Posted by newbee View Post

That's why my tagline is what it is.

 

People trade on stock markets, and people are irrational, especially in groups.  This isn't exactly a big surprise. 

post #97 of 99
Quote:
Originally Posted by Mikeb85 View Post

When the only possible way to get a return on investment is to get money from the next investor, it functions like a Ponzi scheme.  Not saying that it's a literal Ponzi scheme, just trying to illustrate the fact that without a strategy of returning capital to investors, the market functions like one.  

However the market does return capital to investors (a lot of it actually, it's surprising because we think mostly in terms of growth stocks).  

I personally avoid companies that are mature and don't pay dividends, this is actually one reason I like Asian stocks, you can find many growth companies that do pay dividends.  

Edit - by the way, Merck does pay a dividend, and Amgen has started recently.  Google and Amazon still have plenty of growth in them before deciding to pay back investors, and Berkshire Hathaway's value is tied to their assets, not some abstract notion of growth.  

None of this explains a P/E ratio lower than the average. Apple would be priced for growth if its P/E ratio were higher than 15 and for revenue falls if lower.
I wanted dsadsa bit it was taken.
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I wanted dsadsa bit it was taken.
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post #98 of 99
Quote:
Originally Posted by asdasd View Post


None of this explains a P/E ratio lower than the average. Apple would be priced for growth if its P/E ratio were higher than 15 and for revenue falls if lower.

Compare Apple's P/E ratio to ExxonMobil's....  

post #99 of 99
Quote:
Originally Posted by Mikeb85 View Post

Compare Apple's P/E ratio to ExxonMobil's....  


XOM currently has similar PE...but a couple major differences (amongst many) that you don't want to address.  1) Annual revenue trend (as asdasd pointed out) in terms of both historical as well as future trends and 2) Cash/Short term investments.  PE is largely predicated on those 2 factors.

C'mon Mike, you can do better than that.

 

Furthermore, you may somewhat have a point regarding the amount of dividends (thereby tangible market return), but I think you're off the deep end in regards to even alluding to it being like a ponzi scheme.  Look up the word "value".

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