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Shares of Apple sink after supplier Cirrus warns of weak results - Page 8

post #281 of 304
Quote:
Originally Posted by Superbass View Post

I don't understand how so many people can think that the AAPL decline isn't expected and/or that the stock isn't still overvalued.

 

If you were to try and think of one company that might have its stock price inflated by company "fans" and/or amateur investors looking for the "next big company", I think 99.9% of people would think of AAPL.

 

Honestly, did you all think that apple was worth more than every non-state oil company in the world? I'm no investor myself, but that always seemed ridiculous to me - those are companies who have no real competitors, whose product is guaranteed to rise in value in the future, and whose product will never be replaced by a "better" product in our lifetimes.

 

Also, as soon as Apple became "the biggest company in the world", you also had to expect that a bunch more idiots would gobble up stock because it was a "sure investment" because bigger is somehow better. I highly doubt any experienced/smart investors bought Apple when it starting passing Shell Oil and Exxon; it just doesn't make any sense.

 

I look at Microsoft's value when it was at it's absolute peak of dominance (and overinflated stock prices), installed on something like 90% of computers in the world in 1999, when personal computers were still a huge growth market and then see Apple pass those levels with, what 25% of smartphone sales, 50% of tablet sales and maybe 5% of global PC sales, and really there's no way I can see the Apple market cap being anywhere near realistic, even though Apple's profit margins are much higher than Microsofts have ever been. In '99, Microsoft was profiting on almost every computer sold (with no real competitors) at a time when global market penetration of computers was still growing exponentially. Compare that to Apple nowadays, with a thin sliver of PC sales in an industry that is stagnating, a non-dominant share of smart-phones, which is a segment with slowing sales the past 2 years, and a major share in Tablets, which is really an unknown in terms of future value. Nothing suggests Apple should be worth more than Exxon to me.

 

Do you understand any of the numbers here?:

 

http://ycharts.com/companies/AAPL/valuation

post #282 of 304
Quote:
Originally Posted by paladyr View Post

 

Do you understand any of the numbers here?:

 

http://ycharts.com/companies/AAPL/valuation


It would be great to see Microsoft's numbers (and Dells) during the 90s. That would be a much better comparison.

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post #283 of 304
Quote:
Originally Posted by sog35 View Post


No it isn't.  Wall street will discount it as seen by the stock price today.
Stock is up over 2% today.
post #284 of 304
Quote:
Originally Posted by Rogifan View Post


Stock is up over 2% today.


Its flat since Monday.  It drop about 2% yesterday before earnings and then went up 2% today.  No one is giving Google credit for the lower tax rate.

post #285 of 304
Quote:
Originally Posted by Rogifan View Post


Stock is up over 2% today.


... but we have to see if there is a psychological barrier at $400. Any gain today might mean nothing if it doesn't break $400 and stay above $400.

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post #286 of 304
Quote:
Originally Posted by igriv View Post

 

He is talking about GOOG stock. I think we can be quite confident that it will stay above $400 :)


LOL. My mistake... AAPL was up at 2% right at that time.

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post #287 of 304
Quote:
Originally Posted by island hermit View Post


It would be great to see Microsoft's numbers (and Dells) during the 90s. That would be a much better comparison.


Microsoft had a p/e ratio of 72 in 1999 during the bubble - to get more detail you need to pay ycharts for the data.

http://ycharts.com/companies/MSFT/pe_ratio

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post #288 of 304
Quote:
Originally Posted by Superbass View Post

Honestly, did you all think that apple was worth more than every non-state oil company in the world? I'm no investor myself, but that always seemed ridiculous to me - those are companies who have no real competitors, whose product is guaranteed to rise in value in the future, and whose product will never be replaced by a "better" product in our lifetimes.

To be fair, they have actually made more profit than every oil company (and every other company) in the world in some quarters so I do think their current valuation is reasonable - but $700 was a bit much. Exxon Mobil's profits are here:

http://finance.yahoo.com/q/is?s=XOM

Net profit seems to be around $9.5b per quarter. Apple made $13b last quarter. You're right that there are fewer oil competitors but Apple has an exclusivity over iOS and the App Store.

It seems that Exxon Mobil has currently overtaken Apple's market cap due to the recent drop.

Apple's net profit for 2012 was $36b, Exxon's was $45b.

If you assume Exxon's market cap is accurate and that Apple's profits don't grow significantly like Q1, that would mean Apple's market cap should be at 80%. Exxon's current market cap is $389b so Apple's should be $311b, which divided by the shares, gives a $331 share price.

The profit didn't grow last quarter but they missed some profit on the iMacs so there probably would have been some growth. I originally thought a $450-500 price would have been accurate but it seems like $300-350 would be closer if they don't grow the profits significantly. The iPad market still has a lot of potential but we'll see next week.
post #289 of 304
Quote:
Originally Posted by igriv View Post

 

You said:

 

   No it isn't.  Wall street will discount it as seen by the stock price today.

 

Today (at noon) the stock is up almost 3%, so just admit you are wrong (you can wait until 4pm if you like).

 

Google was $814 on 4/2/13.  If it was such a huge beat the stock would have blew past $814.  The average daily price of GOOG for the past 2 weeks is about 790.  So the stock is up 1% after earnings, big deal.  Investors ARE discounting earnings that are result of a tax rate.

post #290 of 304
Quote:
Originally Posted by igriv View Post

 

Read your own quoted message:

 

    No it isn't.  Wall street will discount it as seen by the stock price today. (bold face mine).

 

Does it talk about GOOG price on 4/2/13? Plus, the stock is up 5% after earnings. If you can't admit that you were wrong, then I don't see any reason to continue this conversation.

 

When i made the statement it was correct.

 

Look at the last 2 weeks.  The price has not gone up from that level since earnings was released yesterday.  Yes, its up 5% today, but it was down more than 5% from the beginning of the month.

 

On April 1st Google was over $800.  The the earnings beat was so great it would have blown past all time highs.  No one in wall st cares about temporary earnings because of some tax provision.

post #291 of 304
Quote:
Originally Posted by sog35 View Post

When i made the statement it was correct.

Look at the last 2 weeks.  The price has not gone up from that level since earnings was released yesterday.  Yes, its up 5% today, but it was down more than 5% from the beginning of the month.

On April 1st Google was over $800.  The the earnings beat was so great it would have blown past all time highs.  No one in wall st cares about temporary earnings because of some tax provision.
Google stock is up over 4%, while Apple has erased any early day gains and is flat to down right now. Google's like Amazon right now. They could announce anything right now and the stock would jump. If Apple beats low expectations the stock will do nothing and if they don't, if its a 'meh' quarter, it'll probably drop $30 after hours. I'm actually waiting for it to drop so low it becomes an embarrassment for Wall Street not Apple.
post #292 of 304
Quote:
Originally Posted by igriv View Post

 

That's a rather misguided way of thinking of it. Google and Amazon are both growing strongly, and people also know what to expect. Apple's management are apparently under the impression that they are running the NSA, so there is a complete information vacuum. Jobs could get away with this because (a) he was a known quantity and (b) he had personal relationships with the relevant people, so he could divulge teasers about insanely great products to come privately. The current management cannot -- their mismanagement of both the cash position and the stock price is unspeakably awful at this point.

 

Compare Amazon/Google's Revenue and Earning growth Year over year to apple.  Then relook at what you said.

post #293 of 304
Quote:
Originally Posted by igriv View Post

The current management cannot -- their mismanagement of both the cash position and the stock price is unspeakably awful at this point.

 

Congratulations on the new meme, it's very becoming on you.

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post #294 of 304
Originally Posted by igriv View Post
…the stock price is unspeakably awful at this point.

 

CREATOR: gd-jpeg v1.0 (using IJG JPEG v62), quality = 85

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #295 of 304
Quote:
Originally Posted by igriv View Post

Why don't you reread what I said -- most of it has nothing to do with revenue growth (though it is clear that AMZN and GOOG stock would not be doing so well without the growth).
You said they are both growing "strongly". Are you suggesting Wall Street doesn't care what their revenue or profit growth is? In the case of Amazon it's clear they don't care since Apple has turned more profit in one quarter than Amazon has in their entire existence. Considering Amazon is basically a monopoly I guess Wall Street doesn't need to care whether they turn a profit or not. And they can keep believing that some day in the future it will happen.
post #296 of 304
Quote:
Originally Posted by Tallest Skil View Post

 

CREATOR: gd-jpeg v1.0 (using IJG JPEG v62), quality = 85

 

Lol, Cook laughing as Rome burns.  Nice post.

post #297 of 304

If you don't understand...

If you don't understand why Apple is down, then you shouldn't be in the stock market.  

 

Valuations matter, growth matters, dividends matter, etc...  Last quarter's profits - don't matter.  Stock markets look ahead, not behind.

 

And stock price is a reflection of value, not performance.  Stocks, by their very nature, can't go up forever.  A company has a dollar value, and it can never be infinite...  

 

It's clear that most on this forum don't understand...

post #298 of 304
Originally Posted by tkell31 View Post
Lol, Cook laughing as Rome burns.  Nice post.

 

Apple, meanwhile, is perfectly fine.

 

What's wrong with you people?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #299 of 304
Quote:
Originally Posted by Tallest Skil View Post

 

Apple, meanwhile, is perfectly fine.

 

What's wrong with you people?


You hope.

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post #300 of 304
Quote:
Originally Posted by e1618978 View Post


Microsoft had a p/e ratio of 72 in 1999 during the bubble - to get more detail you need to pay ycharts for the data.

http://ycharts.com/companies/MSFT/pe_ratio


Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.

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post #301 of 304
Originally Posted by island hermit View Post
You hope.


Right, well, we'll see in real time as events unfold.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #302 of 304
Quote:
Originally Posted by island hermit View Post


Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.


I wonder how long it will take Apple to grow into its P/E  8-)   It is amazing to me how much negativity is priced into the stock - margins would have to drop in half or more, and revenue growth would have to go to zero for the current price to make sense even a little bit.  Even if both of those very unlikely things happened, the valuation of Apple would still be lower than most of the S&P 500.

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post #303 of 304
Quote:
Originally Posted by igriv View Post

XOM has very little (relatively) cash on the books (less than $10BN), so if you adjust for the difference, Apple should be about $450BN market cap (everything else being equal, as you suggest), so closer to $500 share price.

Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.

It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Quote:
Originally Posted by igriv View Post

Apple's management has somehow managed to lose investor confidence.

Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.

The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
post #304 of 304
Quote:
Originally Posted by igriv View Post

 

Also: no, you are not doubling up the earnings by adding the cash. The relevant earnings are the FUTURE earnings, cash is the product of past earnings. And in any event, notice that XOM earns more money than AAPL, but they have far less cash (presumably because they reinvest  a lot of their earnings in the business -- their dividend is about the same as AAPL's in percentage terms.


XOM does stock buybacks a lot.  If we took away Apple's cash it would reduce earnings by about 3% or so, since they get approximately 1% return on the cash ($1.5 billion per year).  I agree that $700 was not frothy - I think that Apple would be fairly priced around $900 personally.

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