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Apple announces 7-for-1 stock split, buybacks bumped to $90 billion - Page 3

post #81 of 201
Quote:
Originally Posted by Slurpy View Post

Wait, I don't understand. So I get 7 FREE Apple shares if I own the stock? How do stock splits work?

(I own around 30 shares)

You'll get seven times the shares you have on 1st June, so in your case, 30 becomes 210. And each share will be worth a seventh what each share you currently have is worth on 1st June.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
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post #82 of 201
Quote:
Originally Posted by Slurpy View Post

Wait, I don't understand. So I get 7 FREE Apple shares if I own the stock? How do stock splits work?

(I own around 30 shares)

This topic is covered in the FAQ from the Apple Investor Relations website:

 

http://investor.apple.com/faq.cfm?FaqSetID=2

post #83 of 201
Quote:
Originally Posted by OriginalG View Post

Quote:

It'll be divided as well (but that was entertaining thought though, haha)

I think that was a jolly good idea in fact! 1biggrin.gif
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #84 of 201
Quote:
Originally Posted by Slurpy View Post

Wait, I don't understand. So I get 7 FREE Apple shares if I own the stock? How do stock splits work?

(I own around 30 shares)

 

Naw, Slurpy, you'll own 210 shares but they will be worth around $80 each.

Hmmmmmm...
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Hmmmmmm...
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post #85 of 201

excuse me but I believe you don't understand the options market, many people don't buy and sell PUTS because to do so means leaving oneself open to huge potential losses when share prices are > $100. The CBOT is a market for options. 

Options are in lots of 100, 1 contract = 100 shares when apple was over 500 one had to have at least 60k buying power  in ons account to sell puts, once the share split it will be possible to sell puts with only 8000 buying power, this will greatly increase the number of people trading apple and the price will react accordingly. It will mean smaller investors can trade options whose portfolios are over 50K where before one needed > 250K to do it safely. 

Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.


History reduce Apple Watch.... to a footnote in the annals of technology - Benjamin Frost Dec 2014



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Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.


History reduce Apple Watch.... to a footnote in the annals of technology - Benjamin Frost Dec 2014



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post #86 of 201
Quote:
Originally Posted by Phone-UI-Guy View Post
 
Quote:
Originally Posted by island hermit View Post
 
Quote:
 
Originally Posted by Phone-UI-Guy View Post

 

 

 

It says you will get six more shares. The AI article just isn't as clear as it could be. So after the split you have seven since you had 1 and got 6. So it is 7 to 1. 

 

 

 

"... announced a split granting each AAPL stock owner six shares for each share owned..."

 

 

 

Not clear? No. Just wrong.

 



It doesn't say you loose the one you had. 1smile.gif

 

I see what you are saying. Yes, it could be worded better.

Hmmmmmm...
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Hmmmmmm...
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post #87 of 201
Quote:
Originally Posted by hill60 View Post


So how long until Apple reaches it's peak of $700 per current share, again?

That is the "magic" number.

As Samsung slumps further out of the high end Apple will be there, still at the top, raking off the cream.

43.7 million is a hell of a lot of "tiny screened" smartphones.

I honestly can't tell you.  I've been listening to the analyst's report today but the stream cuts off and I haven't been able to listen to it entirely, yet.

 

Here's what makes me the most nervous.

 

Production of the iPhones.   They are making 180 Million per year.  Now, I know the larger screen model is going to kick ass.  I have no doubt in my mind about that.  But, I have to look at how many have they sold over the past 12 months in total, look forward 12 months and see if they are going to sell substantially more iPhones than the last 12 months with the current production levels?  the 5C's didn't sell as well as even Apple predicted.  This is what makes me the most nervous since the iPhone is about 60% of their revenue and this larger screen, to me, is their biggest chance at making some serious dent in taking back market share from Android, but also making a more expensive phone with potentially good profit margin.  Also, how is it going to impact the 4 inch model if they plan on refreshing that and replacing the 5C with a cheaper polycarb 5S.

 

It's not only HITTING $700 (or the new equivelent due to the stock split, which takes place in June), so we have to figure out what that NEW number is that's equivalent to $700.  Actually, the new number is $100 after stock split.  


What I would LIKE to see that would make me LESS nervous are the following things that would give me less nervousness about it hitting that Magic $700 (equivalent number).

 

1.  Substantial increase in production output of iPhones.  Be able to meet demand within the first FULL quarter after the product is announced.  Also, I really think Apple needs to kick out this iPhone 6 (~5inch) by June and then the replacement for the 5S and 5C in Sept.  I think they will have PLENTY of sales if they did that and that would kick in a LOT more sales during their typically poor summer months.  I want to see 45 Million iPhones shipped in their WORST quarter and more like 60 Million in this Christmas, would be nice to hit, but unless they can churn out more phones per day, it's highly unlikely they'll hit 60 Million iPhones in the December quarter.

2.  something substantially improved AppleTV box. I would like to see something other than what it currently is.  I would like to see something that indicates that it's THE box to have and maybe two different flavors.  1 is the basic and 2 a much more enhanced product with substantially more features.

3.  Some kind of release date of an Apple HD SmartTV. I really think they SHOULD be in this market and to figure out how to enter it and stay in it and to make a top notch product people will buy over the Google TVs. The market for this segment is growing FAST and it's getting up there in Worldwide sales and I think the price level is profitable if they do it right and Apple already has a pent up demand for this, whether people want to admit it or not.

4.  Wearables would certainly help, but I'm not looking at a HUGE money maker, it's just like a little icing on the cake if you will.  I see it as a good stocking stuffer type product line potentially.

5.  I would like to see some form of new revenue from these auto deals.  Do they make money from it?  Or is it just more of our products integrate well, so when you buy these cars, it just means the iPhones work seamlessly.  If they actually make money from each car that has this integration from it, that's a new market segment.

6.  I do feel good about the future for China, that market is growing, they just need to get more stores opened up as they have been doing well.

7.  Keep on cranking out new products and not take too long in refreshing a product.  I think they could do better in attracting more Windows users to OS X if they had a few more models and in that between the MacMini and MacPro area, I think PC users, in general don't like AIO units as much.

8.  I would like some type of announcement an addition of 24 bit AAC files and integrating 24 bit DACs. I don't think it's a HUGE money maker for the short term, but it will definitely help sell the entire Apple product line as they'll transition people from 16 bit to 24 bit a LOT faster than any other platform and that market IS growing.  I think it would be more of helping sell moving to Apple and interject some more fire into iTunes.

 

I think if all, or at least MOST of these 8 things are done, then it's possible that we could see that $700 price within a year or two.  If would certainly give me more warm and fuzzies, but it's also how LONG can they KEEP the stock at that price and that to be the next plateau. That's the issue. It's not only reaching it, but not going below it.   If they have anything additional that's not listed, then I hope it's for the positive and it may replace some of the items I have listed.


Remember, whatever revenue Apple USED to make from iWork sales, OS X sales are gone because those are now free, so that is great to attract customers and it's great for Apple users to not have to pay for these, but they do reduce the profit margins as a result. So we have to be aware of this.

 


These are just MY opinions and they do not reflect reality, unless they come true. So this is all speculation.  I just have to make that clear that this is what would make me less nervous about Apple hitting that magic number ($700 pre stock split, $100 post).  I think it's a LOT easier for Apple to hit $100 a share after stock split than it is for them to hit $700 before Stock split, if that helps.  They are increasing the dividends, which helps attract shareholders and hopefully this KEEPS shareholders so the stock doesn't make huge fluctuations.

post #88 of 201

I think it's a good move. Apple will be coming out with significant upgrades and new categories after June, and talk would inevitably revolve it breaking $700 again. After the split, the bashers won't be able to talk about that so directly, and it is possible new investors will be attracted by the lower share price. If the share price does appreciate, the bashers will mainly be left beating the "first trillion dollar" company drum again, rather than, "It's nearing $700 again. Remember how it fell off the cliff last time?" which would be a little harder to express in a sound bite given the arithmetic of the split.

post #89 of 201
Quote:
Originally Posted by scooper4711 View Post

It's a 7 for 1 split - one share becomes seven. In other words, if you had one share, you get six more.

I haven't heard the entire analyst call, but I ran into an Apple employee and he said something to the effect of increased dividends as well and that this was all going to start in June.  I don't know what changes they are making to the dividends, but I think this is a welcome stock split, I just wish I had a bunch of shares to take advantage of this moving forward.   For some reason, the new price is going to be around $76 a share instead of $535, and I think it's going to be a LOT easier for Apple to reach $100 a share and HOPEFULLY not go back down than it is for Apple to reach $700 a share and to have that as the new base line.  Time will tell what happens, but I think what happens at WWDC and their announcements is going to make me feel either more or less comfortable.


One thing I must say, when I listened to part of the conference call and listen to some of the "positive" comments they were mentioning, some of them are fluff.  I hate it when they make a comment, but there isn't much substance behind it.  Having 800 Million iTunes account holders is FLUFF to me, but if they said they are seeing a 30% increase per user of money being spent, that's more substance. Having an account doesn't mean you are spending money.  I haven't rented or bought any movies in a while and I"m a little upset they don't have a yearly subscription service.  I have one with Amazon (bought it before the price increase) and I use it fairly regularly.  For a while I was using it daily for several hours catching up on shows I've never seen before.  There service is pretty decent quality and serves up the content pretty good, but I wish Apple had this service without having an AppleTV. Watching on a 27 inch iMac is good enough right now. But I would like to maybe see Apple have some sort of $9.95 a month for unlimited streaming, as long as they have enough decent content (TV and Movies) to watch on my iMac.  I might be up for that.

 

The auto integration, I'm sorry, but I see it only as a way to make people feel more comfortable using an iPhone with a car and I so far don't see how Apple is making money from this.  So, I think it would be better if they had some other NEW revenue stream from the auto industry.  If they had some deal where cars came with a built in iPad on the dashboard instead of some other system, that might excite me if it was catching on.  But I would like to see them have an actual new revenue stream to get hot and bothered about it.


The green stuff is fluff, it's cool they are doing it, but it's not going to effect the stock price, only what Greenpeace THINKS about Apple.

post #90 of 201
Quote:
Originally Posted by island hermit View Post
 

 

Naw, Slurpy, you'll own 210 shares but they will be worth around $80 each.

Yeah, the dollar value is the same when they conduct the split from that specific time period, but when it goes up by $1 a share he'll have it go up $210 instead of $30 and he'll probably get more dividends each quarter.  If it goes down by $1 it goes down more, but hopefully in the long run you'll be better off as long as Apple doesn't pull a Zune, Surface, Windows 8/8.1 type of mistakes, which I doubt they will.

 

My understanding is the split doesn't take effect until June 1, it NEVER goes into effect the day they announce the actual split, neither does the buyback.  The buyback is just how much money they have EAR MARKED.  Whether they spend it, when they spend it, and how much they actually spend it is UNDETERMINED.  It just makes everyone aware of the potential plans and it's just a way to help the stock value if/when they see an opportunity to buy back the shares if the stock should reach a low.  They have to mention it for SEC rules and regulations kind of thing.

post #91 of 201
Would have been nice if they bought $100b back when aapl was below $400. It's nice to finally see Apple do something with all that cash. Very smart move to increase the buyback and raise the divvy a tad.
post #92 of 201
Quote:
Originally Posted by drblank View Post
 

I haven't heard the entire analyst call, but I ran into an Apple employee and he said something to the effect of increased dividends as well and that this was all going to start in June.  I don't know what changes they are making to the dividends, but I think this is a welcome stock split, I just wish I had a bunch of shares to take advantage of this moving forward.   For some reason, the new price is going to be around $76 a share instead of $535, and I think it's going to be a LOT easier for Apple to reach $100 a share and HOPEFULLY not go back down than it is for Apple to reach $700 a share and to have that as the new base line.  Time will tell what happens, but I think what happens at WWDC and their announcements is going to make me feel either more or less comfortable.


One thing I must say, when I listened to part of the conference call and listen to some of the "positive" comments they were mentioning, some of them are fluff.  I hate it when they make a comment, but there isn't much substance behind it.  Having 800 Million iTunes account holders is FLUFF to me, but if they said they are seeing a 30% increase per user of money being spent, that's more substance. Having an account doesn't mean you are spending money.  I haven't rented or bought any movies in a while and I"m a little upset they don't have a yearly subscription service.  I have one with Amazon (bought it before the price increase) and I use it fairly regularly.  For a while I was using it daily for several hours catching up on shows I've never seen before.  There service is pretty decent quality and serves up the content pretty good, but I wish Apple had this service without having an AppleTV. Watching on a 27 inch iMac is good enough right now. But I would like to maybe see Apple have some sort of $9.95 a month for unlimited streaming, as long as they have enough decent content (TV and Movies) to watch on my iMac.  I might be up for that.

 

The auto integration, I'm sorry, but I see it only as a way to make people feel more comfortable using an iPhone with a car and I so far don't see how Apple is making money from this.  So, I think it would be better if they had some other NEW revenue stream from the auto industry.  If they had some deal where cars came with a built in iPad on the dashboard instead of some other system, that might excite me if it was catching on.  But I would like to see them have an actual new revenue stream to get hot and bothered about it.


The green stuff is fluff, it's cool they are doing it, but it's not going to effect the stock price, only what Greenpeace THINKS about Apple.

 

The iTunes "fluff" as you put it is making more money than most of Apple's competitors and is also growing at a faster rate.

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post #93 of 201
Quote:
Originally Posted by hill60 View Post
 

 

The iTunes "fluff" as you put it is making more money than most of Apple's competitors and is also growing at a faster rate.

Well, I just like to hear numbers that mean something.  What Apple's doing compared to the competitors is one thing, but how well Apple is doing compared to themselves is another.

When evaluating a company, it's nice to know how the company is doing against their own metrics.  More accounts is one thing, but what's the average amount spent per account at the end of previous quarter and after the quarter.   How they compare agains the competitors is more for bragging rights and that doesn't really explain the entire picture.

 

Apple needs to compare themselves to themselves FIRST to see if what they are doing is an improvement or not, if so, how is it quantified.

 

Which would rather have more customers spending more per customer or more customers spending less per customer, but overall getting more business, but just not as much as they COULD have.  How are the competitors bringing revenue and profits?  Do they do something that you COULD be doing, but aren't to drive revenues per customer up? If you are getting less revenue per customer, what's changed?   Is there something a competitor is doing that you aren't that could be beneficial to the company AND to the customer?  Is the company addressing all of the needs of the customer?  

 

A lot of ways to analyze something rather than just looking at superficial numbers.

 

I don't like just looking at superficial numbers, I like to view at something from every possible angle, that way I can REALLY understand the dynamics of a business.


I can tell one thing, as much as I have personally purchased from Apple iTunes, I've been purchasing more from other sources in the past quarter because Apple doesn't provide what these others are.  I'm not the only one either. So from my perspective, they could be doing even better.

 

Or are you just satisfied with what they're doing vs what they COULD be doing?

 

Let's just run a simple "what if".

 

Let's just say that Apple released 24 bit AAC and it was basically just as good as FLAC and AIFF through HD Tracks and others.  Then all of Apple's products were 24 bit internal DACs, so EVERYONE could potentially buy 24 bit albums. Obviously only a small percentage would, so let's just say 1% bought an average of $1000 a year of 24 bit content, that's roughly 4 albums a month per person. Some would be buy more than that, a LOT more than that. But let's just go with $1000 a year x 1% of the account holders.  That's 8 Million people spending an additional $1000 a year on 24 bit content, even thought there would probably be a LOT more than that.  What's 8 Million people (1% of the current account holders) x $1,000 a year in additional revenue?  That's $8 BILLION additional Revenue. 30% of that would be gross profits.  $2.4 Bil in Gross Profits.  How much did iTunes do last year?  $10 Billion in gross sales without 24 bit.  Hmmmmm.....  To me, it sounds like a no brainer to kick these puppies out on the market to start capturing those potential revenue stream.  Right now, there aren't 8 million people downloading 24 bit content. I'd say the number now is probably in the 100,000+ at this time. But every day, more USB DACs get sold and every day that number is growing. With Apple kicking out 24 bit internal DACs in all of their products, THEY would jump start this industry to reach astronomic levels without blinking.  So until Apple kicks starts it, the industry will just grow steadily, but not astronomically.


Edited by drblank - 4/24/14 at 3:13am
post #94 of 201
A somewhat subtle point about why the split will be beneficial to all shareholders concerned options and the unintended consequences of the way they are hedged and cleared: as the price of AAPL crept higher and higher, a greater per cent of the daily transactions in the stock actually stemmed from options transactions, due to the needs of option market makers to hedge away their risk by becoming risk free ("delta neutral") by trading long and short AAPL in the correct proportion.

Given their relative cheap price and effective leverage, options have become the primary vehicle for trading AAPL, albeit in a somewhat indirect and complicated way. The problem for AAPL shareholders is that when options near expiration (now every Friday) they distort the stock market by forcing the market makers to take actions that seem counterintuitive to many. If, for example, AAPL stock goes up on Monday and Tuesday it will usually start to plummet by Thursday as the long call option holders cash in, forcing market makers to sell in response. The result of this herky-jerky stock movement is the interruption of trends, the blunting of technical analysis patterns, and the general frustration of the buying public, who can't understand what's happening.

By splitting the stock it may be hoped that shares of stock instead of options will become more popular as a trading vehicle and thereby avoid much if the option-clearing damage to the price. Hence, I'm very much in favor of the split and would have welcomed a 10:1 split
post #95 of 201
Quote:
Originally Posted by drblank View Post
 

Well, I just like to hear numbers that mean something.  What Apple's doing compared to the competitors is one thing, but how well Apple is doing compared to themselves is another.

When evaluating a company, it's nice to know how the company is doing against their own metrics.  More accounts is one thing, but what's the average amount spent per account at the end of previous quarter and after the quarter.   How they compare agains the competitors is more for bragging rights and that doesn't really explain the entire picture.

 

Apple needs to compare themselves to themselves FIRST to see if what they are doing is an improvement or not, if so, how is it quantified.

 

Which would rather have more customers spending more per customer or more customers spending less per customer, but overall getting more business, but just not as much as they COULD have.  How are the competitors bringing revenue and profits?  Do they do something that you COULD be doing, but aren't to drive revenues per customer up? If you are getting less revenue per customer, what's changed?   Is there something a competitor is doing that you aren't that could be beneficial to the company AND to the customer?  Is the company addressing all of the needs of the customer?  

 

A lot of ways to analyze something rather than just looking at superficial numbers.

 

I don't like just looking at superficial numbers, I like to view at something from every possible angle, that way I can REALLY understand the dynamics of a business.


I can tell one thing, as much as I have personally purchased from Apple iTunes, I've been purchasing more from other sources in the past quarter because Apple doesn't provide what these others are.  I'm not the only one either. So from my perspective, they could be doing even better.

 

Or are you just satisfied with what they're doing vs what they COULD be doing?

 

Let's just run a simple "what if".

 

Let's just say that Apple released 24 bit AAC and it was basically just as good as FLAC and AIFF through HD Tracks and others.  Then all of Apple's products were 24 bit internal DACs, so EVERYONE could potentially buy 24 bit albums. Obviously only a small percentage would, so let's just say 1% bought an average of $1000 a year of 24 bit content, that's roughly 4 albums a month per person. Some would be buy more than that, a LOT more than that. But let's just go with $1000 a year x 1% of the account holders.  That's 8 Million people spending an additional $1000 a year on 24 bit content, even thought there would probably be a LOT more than that.  What's 8 Million people (1% of the current account holders) x $1,000 a year in additional revenue?  That's $8 BILLION additional Revenue. 30% of that would be gross profits.  $2.4 Bil in Gross Profits.  How much did iTunes do last year?  $10 Billion in gross sales without 24 bit.  Hmmmmm.....  To me, it sounds like a no brainer to kick these puppies out on the market to start capturing those potential revenue stream.  Right now, there aren't 8 million people downloading 24 bit content. I'd say the number now is probably in the 100,000+ at this time. But every day, more USB DACs get sold and every day that number is growing. With Apple kicking out 24 bit internal DACs in all of their products, THEY would jump start this industry to reach astronomic levels without blinking.  So until Apple kicks starts it, the industry will just grow steadily, but not astronomically.

 

How much does Google make out of their entire business?

 

How much does Apple make out of iTunes alone?

 

How does iTunes profit taken on it's own compare to the profits of handset makers?

 

A small part of Apple's business, a side note, yet analysts fail to take it and it's growth into account.

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post #96 of 201
Quote:
Originally Posted by drblank View Post

Actually Apple took on some debt last year.  If you look at the June 29, 2013 quarter Balance Sheet, they took on about $17 Billion in debt.  If I remember correctly, I think they did this to pay dividends instead of bringing cash into the country from Ireland which would have cost them a bunch in taxes, so this way it creates some debt and the interest they pay for the debt is a write down.  I'm sure it was the better option if you ran the numbers.  Apple is already one of the largest corporate tax payers.  I think if you were in the same position as an individual, you'd probably do the same thing.

You are absolutely correct regarding the debt. It only makes sense Apple is one of the largest US taxpayers as it is one of the largest beneficiaries of our system.
post #97 of 201
Quote:
Originally Posted by jonl View Post
 

I think it's a good move. Apple will be coming out with significant upgrades and new categories after June, and talk would inevitably revolve it breaking $700 again. After the split, the bashers won't be able to talk about that so directly, and it is possible new investors will be attracted by the lower share price. If the share price does appreciate, the bashers will mainly be left beating the "first trillion dollar" company drum again, rather than, "It's nearing $700 again. Remember how it fell off the cliff last time?" which would be a little harder to express in a sound bite given the arithmetic of the split.

How do you expect the stock to increase by 30% if Apple has been at a 15% to 20% growth rate for revenues and profits from year to year?


What do you think they need to do to hit a 30% increase?


Just asking.  I have my own opinions which I've shared, can you share yours? 

I'm curious as to what others think Apple should do to be able to achieve a 30% stock increase when they are running at a 15 to 20% year to year increase.

 

Thanks.

post #98 of 201
Quote:
Originally Posted by drblank View Post
 

How do you expect the stock to increase by 30% if Apple has been at a 15% to 20% growth rate for revenues and profits from year to year?


What do you think they need to do to hit a 30% increase?


Just asking.  I have my own opinions which I've shared, can you share yours? 

I'm curious as to what others think Apple should do to be able to achieve a 30% stock increase when they are running at a 15 to 20% year to year increase.

 

Thanks.

 

15-20% EPS growth will easily get this to $700 a share.

 

Google's last report showed a 1% EPS growth.  That's right 1%.  Yet their PE is 28 vs Apple at 14.  If Apple had the same PE as Google the stock would be $1100.

 

EPS growth is compounding.  You don't need 30% EPS growth every quarter to make the stock go up 30%.  You really only need 10% growth.  You also need to factor in the dividends and buybacks and the huge cash balance.  I can easily see Apple back to $700-$800 in the next 12 months.

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Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
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post #99 of 201
Quote:
Originally Posted by hill60 View Post
 

 

How much does Google make out of their entire business?

 

How much does Apple make out of iTunes alone?

 

How does iTunes profit taken on it's own compare to the profits of handset makers?

 

A small part of Apple's business, a side note, yet analysts fail to take it and it's growth into account.

How much Google makes is irrelevant to analyzing Apple's current business model and what they COULD be doing.  Apple's been doing iTunes/App Store longer than Google and has a tremendous jump start on getting customers.  Why allow more flies in the room when you can shut the screen door?  Apple could jump start 24 Bit for the masses and it's no brainer.

 

How much does Apple make?  In terms of Gross Sales or Net Profits?  Yearly or Quarterly?
Yearly figures are approximately $16 Billion, but it's about $4.8 Billion Gross Profit, I have no idea what they attribute Net Profit to since I've never seen that broken down anywhere.  Apple doesn't release Net Profit by product segment, unfortunately.  I've read, a LONG time ago, and I have no idea how true the information was, I think it might have been in a Jobs interview, that per $.99 of gross sales for a music download, that they netted only $.05 because a large chunk of the profits went to Akamai for content delivery.  So, while the Gross sales seems impressive, the Gross margins seems impressive, if we go by what a friend of mine said a LONG time ago, that the Net Profits aren't.  Netting only 5% of Gross Sales as Net Profits, isn't that good for that specific business segment. I"ve heard rumblings that Apple may be getting some type of system in place to circumvent them going to Akamai, which would help (hopefully their costs would be lower) but that so far is pure rumor, speculation and if true, I have no idea when that goes into effect, but it would definitely be more of an overhead savings rather than Gross Revenue increase.  It's one way to increase profits, which is a good thing.

 

 

How does iTunes profit compare to profits of Hanset makers?  I'm trying to find the logic in why that matters?

 

A small part of Apple's business?  Well, if they have the ability to grow that business and refresh products with enhanced abilities as a result to entice more demand for the hardware, then wouldn't you think that the combination would improve BOTH iTunes revenues/profits and h/w revenues and profits?  I do.

 

24 bit is a small niche, but it's growing. Without Apple kicking that market in the ass to jumpstart to become more mainstream and for the masses, then it will just continue to grow at a smaller rate, so others can come out with other products and have sales whereas Apple will lose business opportunities.   Apple is in the cat bird seat to jump kick 24 bit in the high gear and take it from tens or hundreds of millions of dollars in business to Billions and eventually tens of billions in business.  It's like DTS Master/TrueHD for movies.  Right now, we can't rent or buy digital downloads of higher end 24/96 movies for a couple of reasons, 1.  the film studios aren't doing it 2. It requires a significant amount of bandwidth because movies are like 1 1/2 hours to as much as 2 to 3 hours in length and the increased amount of the soundtrack would increase the download from several GB to quite a bit more.  But an album is a much smaller download due to length and it's just audio of 2 channel rather than HD video AND 5.1 audio.

 

Personally, I think 24 bit audio is prime for iTunes/Apple to START their market into that this year. I'm really hoping they do it, and they get the Mastered for iTunes portion right so that people with nice systems can't tell the difference between FLAC/AIFF lossless and AAC 24 bit.  That's a challenge for them.  Can they get that right.

post #100 of 201
Quote:
Originally Posted by TBell View Post


You are absolutely correct regarding the debt. It only makes sense Apple is one of the largest US taxpayers as it is one of the largest beneficiaries of our system.

I think the whole debt thing is kind of funny since the amount of interest Apple makes in their long term investments after taxes, probably pays the interest on the debt and it was just an easier way to decrease their taxes a little and give more dividend.


How many people out there don't like paying taxes and try to find ways to reduce their tax liability?  As long as it's legal, what the F?  right?

post #101 of 201
Quote:
Originally Posted by sog35 View Post
 

 

15-20% EPS growth will easily get this to $700 a share.

 

Google's last report showed a 1% EPS growth.  That's right 1%.  Yet their PE is 28 vs Apple at 14.  If Apple had the same PE as Google the stock would be $1100.

 

EPS growth is compounding.  You don't need 30% EPS growth every quarter to make the stock go up 30%.  You really only need 10% growth.  You also need to factor in the dividends and buybacks and the huge cash balance.  I can easily see Apple back to $700-$800 in the next 12 months.

So you expect a 30% stock price increase with only a 15 to 20% EPS growth?  Hmm.  Oh, OK.  If you think so.

 

Google's stock price is TOTALLY different. Here's why?  They are in a much earlier stage of development than Apple.  Look at Amazon, look at their P/E ratio.  A lot of these internet services companies, which is what Google is listed as, is much more like a startup than an established business that's paying a sizable dividend.

 

Personally I think Google is overvalued, just Facebook is overvalued, just like Amazon is overvalued. but obviously their investors see something different in THEIR business model to Apple's.  Apple's more of a hardware mfg, if you will than an Internet Services company.  Does that make sense?  I'm not saying they won't hit $700 a share, but I highly doubt they can do that with only 15 to 20% EPS growth.  that's why they aren't trading at $700 and they are trading at $535 instead.  Just my observation.

 

As a company matures, pays dividends and is more seen as a Blue Chip type company, their P/E ratio get more in the low to mid teens than the 20's, 30's and beyond.  It's just what I've been told a LONG time ago by some respected industry analyst and it wasn't directed towards Apple per se, it was directed more towards how it's just seen and done by these types of businesses as they develop from a startup to a mature company that's gone through their hyper growth stage.   I think Apple can hit the equivelent of $700, but it's going to take a lot more than 15 to 20% EPS year to year growth rate.  But that's just my opinion based on what I'm seeing and hearing and think that that rationale just makes a little more sense.  That's all.  We can certainly disagree and It's not going to hurt my feelings and it's not meant to hurt yours either, so please don't take it as such.  It's just different viewpoints.

 

Oh, I forgot to mention, look at the shares outstanding, one is more diluted than the other.  That can make a large difference on stock price.  I think Google has only 660Million shares and pre stock split, Apple has just under 1 Billion, but post stock split, Apple will be a lot more diluted at around 7 Billion shares.  Microsoft has 8.5 Billion shares outstanding and Microsoft's P/E is pretty low, they pay dividends, etc.  That's why their stock movement isn't that great and hasn't been for a while.

post #102 of 201
Quote:
Originally Posted by drblank View Post
 

 I'm not saying they won't hit $700 a share, but I highly doubt they can do that with only 15 to 20% EPS growth.  that's why they aren't trading at $700 and they are trading at $535 instead. 

 

$566

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #103 of 201
Quote:
Originally Posted by hill60 View Post
 

 

$566

Yeah, that's after-hours trading right after the announcement.  We'll see where the stock is at on the day they actually perform the split.  It's common to have large increases right after the announcement and then see a normal price after people have come down off their cloud and more into REALITY.


Let's look at IPhone sales.  I read last year that they finally reached a daily production of 500,000 phones a day.  I don't know if that was TOTAL or just Foxconn.  Now, if they are at 45 Mill phones a quarter, how can they get much higher in unit sales per year if they don't increase production?  if you look at their quarterly units shipped they've been hovering between 31 Million to as high as 51 Million units shipped for a 12 month total of 159+ over the past 12 months.  Obviously at the end of the quarter they have so much in inventory carrying over, but they are supposedly at 180 Million units a year which is less than a 20% increase if they actually hit 180 Million units over the next 12 months.  Personally, I firmly believe they have to crank out the iPhone 6 in June, and then refresh the 5S, 5C, etc. in Sept and between all of these, if they don't have massive production issues, they MIGHT be able to actually hit 60 Million instead of only 51 Million they did last Christmas, which is only a 20% increase, but hopefully the slower quarters might start hitting in the 40+ Million range rather than low 30 Million range.  To drop all of their new products at then of the year is dangerous for Apple and they need to spread out product introductions in the iPhones and maybe even the iPads so they don't always run into lots of spillover because of production problems.  They've done this two years in a row and it's frustrating when they do it.  I think 45 Million in a quarter needs to be their NEW low and 60 Million in a quarter, needs to be their new high and that will help them get to $700 a share much easier and then they need to raise that bar again and again.  Due to bigger markets opening up, and more screen size choices, I think they can, but building more production  and getting components is a key issue.

post #104 of 201

I have a question concerning options.  What if somebody owns a contract at the $410 strike price that doesn't expire until 2015, just to give an example.  7 does not go into 410 evenly.  Will the market makers create a special $58.57 strike price and give the owner 7 of those contracts?

post #105 of 201
if this isn't classed as corporate market manipulation, I don't know what is ?
post #106 of 201
Originally Posted by island hermit View Post

if you and the others are going to be so dense as to not realize that 7 for 1 does not equal 6 for 1 then there is nothing I can do for you.

 

No, no, no. It’s a 6S to 1 split! Haven’t you been paying attention to Apple’s naming schemes? ;)

post #107 of 201
I Quote:
Originally Posted by nexus444 View Post
 

I have a question concerning options.  What if somebody owns a contract at the $410 strike price that doesn't expire until 2015, just to give an example.  7 does not go into 410 evenly.  Will the market makers create a special $58.57 strike price and give the owner 7 of those contracts?

 

I think when there is a stock split, everything gets adjusted accordingly on the date of the actual split.  The split doesn't take place until June 1, but call your broker to get 100% confidence on that.  This is a question for a licensed professional if you ask me, but my gut feeling is everything adjusts on the actual split date.

post #108 of 201
Quote:
Originally Posted by Tallest Skil View Post
 

 

No, no, no. It’s a 6S to 1 split! Haven’t you been paying attention to Apple’s naming schemes? ;)

But aren't they still on iOS 7.1?  Oh.......................  7 to 1 stock split is better than a 10 to 9 stock split.  So i think Apple decided to follow iOS version instead of OS X.  

post #109 of 201
Quote:
Originally Posted by Tallest Skil View Post
 

 

No, no, no. It’s a 6S to 1 split! Haven’t you been paying attention to Apple’s naming schemes? ;)

 

How silly of me. Thank you for clearing that up.​ :D
Hmmmmmm...
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Hmmmmmm...
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post #110 of 201

It's been years since my Apple stock was split...but even then it was just a 2:1, not 7:1. Nice.

post #111 of 201
Quote:
Originally Posted by AlmondRoca View Post
 

It's been years since my Apple stock was split...but even then it was just a 2:1, not 7:1. Nice.

 

I think Apple's making up for lost time when it should have split a few times every time it hovered around $100 a share like they NORMALLY split the stock.

post #112 of 201
Quote:
Originally Posted by drblank View Post
 

So you expect a 30% stock price increase with only a 15 to 20% EPS growth?  Hmm.  Oh, OK.  If you think so.

 

Google's stock price is TOTALLY different. Here's why?  They are in a much earlier stage of development than Apple.  Look at Amazon, look at their P/E ratio.  A lot of these internet services companies, which is what Google is listed as, is much more like a startup than an established business that's paying a sizable dividend.

 

Personally I think Google is overvalued, just Facebook is overvalued, just like Amazon is overvalued. but obviously their investors see something different in THEIR business model to Apple's.  Apple's more of a hardware mfg, if you will than an Internet Services company.  Does that make sense?  I'm not saying they won't hit $700 a share, but I highly doubt they can do that with only 15 to 20% EPS growth.  that's why they aren't trading at $700 and they are trading at $535 instead.  Just my observation.

 

As a company matures, pays dividends and is more seen as a Blue Chip type company, their P/E ratio get more in the low to mid teens than the 20's, 30's and beyond.  It's just what I've been told a LONG time ago by some respected industry analyst and it wasn't directed towards Apple per se, it was directed more towards how it's just seen and done by these types of businesses as they develop from a startup to a mature company that's gone through their hyper growth stage.   I think Apple can hit the equivelent of $700, but it's going to take a lot more than 15 to 20% EPS year to year growth rate.  But that's just my opinion based on what I'm seeing and hearing and think that that rationale just makes a little more sense.  That's all.  We can certainly disagree and It's not going to hurt my feelings and it's not meant to hurt yours either, so please don't take it as such.  It's just different viewpoints.

 

Oh, I forgot to mention, look at the shares outstanding, one is more diluted than the other.  That can make a large difference on stock price.  I think Google has only 660Million shares and pre stock split, Apple has just under 1 Billion, but post stock split, Apple will be a lot more diluted at around 7 Billion shares.  Microsoft has 8.5 Billion shares outstanding and Microsoft's P/E is pretty low, they pay dividends, etc.  That's why their stock movement isn't that great and hasn't been for a while.

 

You need to realize most analysis calculate earnings 2 or 3 years ahead.  If Apple does 10% growth for 3 years the accumulated growth will be over 30% because of compounding. 

 

The reason why Apple was trading at $535 is because of Wall Street BS.  Period.  Earnings growth at 10-15% justifies a PE in the high teens.  A PE of 17.50 would put Apple at $700.  Costco has a PE of 24 and only grew earnings at 18% last year.

 

Google is not even close to a startup.  They already dominate internet advertising and are having trouble growing earnings.  Their revenue was up 27% last quarter but profits were up only 1%.  Problem is advertisers are not willing to spend the same amount of money on mobile ads in contrast to desktop ads.  Thus their cost per click has gone down the last 9 quarters in a row.  Also startups don't spend $20B acquiring companies like Motorolla. 

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post #113 of 201
Quote:
Originally Posted by sog35 View Post
 

 

You need to realize most analysis calculate earnings 2 or 3 years ahead.  If Apple does 10% growth for 3 years the accumulated growth will be over 30% because of compounding. 

 

The reason why Apple was trading at $535 is because of Wall Street BS.  Period.  Earnings growth at 10-15% justifies a PE in the high teens.  A PE of 17.50 would put Apple at $700.  Costco has a PE of 24 and only grew earnings at 18% last year.

 

Google is not even close to a startup.  They already dominate internet advertising and are having trouble growing earnings.  Their revenue was up 27% last quarter but profits were up only 1%.  Problem is advertisers are not willing to spend the same amount of money on mobile ads in contrast to desktop ads.  Thus their cost per click has gone down the last 9 quarters in a row.  Also startups don't spend $20B acquiring companies like Motorolla. 

Not all of them. I look at what periods of time they are talking about.  They might calculate it that far ahead, but a lot their recommendations are 12 months.  So you have to be VERY specific on the time period.  I was looking at 12 months, I guess we have to be on the same page for this.

 

I see a LOT of analysts that make 6 month to 12 month predictions most often, even though they might calculate further than that. They usually like to give 6 to 12 month guidance more often than the 2 to 3 years.  Most companies don't give enough guidance to go that far ahead, so it's not that reliable to go much past 12 months.  Heck, some of these guys can't even do 12 months with decent levels of accuracy.  A lot of companies give only more like 3 to sometimes 6 months guidance, so how can someone's 2 to 3 year guidance be as accurate?

 

Yeah, in 2 years from now, if they keep at this rate, I think it's very likely they'll hit $100 (post stock split) and stay there, if things go the way they are going, but they need to look into more market segments other than just selling iPhones and iPads into more countries.  That's just creating more markets for existing products. 

 

They need to look outside of the same slices in the pie chart for revenue.


HDTVs is a fast growing market and they COULD penetrate that to increase yet another entirely new market segment that would help solidify Apple users into sticking with Apple products.  I think it's a very natural market for them, they just have to figure it out ahead of time so they don't make any major mistakes.   The TV panel mfg have troubles making money because they all fall into the trap of hitting every price point from $200 on up and that's what kills their margins, they make entirely too many products where only some make a decent profit margin where the rest is basically dumping product at little to no money, even a loss just to move panels.


I know Google is not a startup, but for a company to go to $1000 a share without a stock split isn't common.  They should have done a stock split a long time ago, but they have been trying to get away from being purely based on advertisement as their source of revenue into going into song/app downloads, selling phones and tablets, laptops, and the various services they offer, so they really are kind of confused as to who they REALLY are.  They are kind of playing in to too many areas and just throwing crap out to see what sticks.  At least that's my opinion, but they are FAR from a mature company that's paying dividends like a Microsoft, Apple, Intel, etc.

 

Well I can't help it if they wasted so much money on Motorola, look at Facebook, they waste BILLIONS on tiny nothing companies all of the time and they just recently went public.  Also, Google paid $12.5 Billion, not $20 BIl, I don't know where you got the $20 Bil from.  Some of these companies that fall into a lot of disposable cash make some of THE dumbest decisions.  Look at the crap HP wasted Billions on.  Palm, Autonomy, etc.  boy, did they put themselves in a horrible position that will take decades to sift through before they can really recover.   I think Microsoft wasted their money on Nokia, but time will tell if they can make a go of it.


A mature company is really solidified in what they do and paying dividends.  That's how a lot of these analysts see them. I just saw one interview and this is basically what he was saying.

post #114 of 201
Quote:
Originally Posted by sog35 View Post
 

 

You need to realize most analysis calculate earnings 2 or 3 years ahead.  If Apple does 10% growth for 3 years the accumulated growth will be over 30% because of compounding. 

 

The reason why Apple was trading at $535 is because of Wall Street BS.  Period.  Earnings growth at 10-15% justifies a PE in the high teens.  A PE of 17.50 would put Apple at $700.  Costco has a PE of 24 and only grew earnings at 18% last year.

 

Google is not even close to a startup.  They already dominate internet advertising and are having trouble growing earnings.  Their revenue was up 27% last quarter but profits were up only 1%.  Problem is advertisers are not willing to spend the same amount of money on mobile ads in contrast to desktop ads.  Thus their cost per click has gone down the last 9 quarters in a row.  Also startups don't spend $20B acquiring companies like Motorolla. 

Here's what I don't get.   There have been articles mentioning how Apple is starting production of the iPhone 6 and then journalist are now saying they are going to release it in Sept.  What the heck would Apple start production of a product to fill up warehouses 5 months ahead of time sitting on inventory?  That makes NO SENSE.  That would look bad from an inventory perspective.   If Apple is, in fact, starting production of these suckers, then it would make sense that they would have a release date within a couple of months as they got the final issues cleaned up.  I think there is some confusion by the media.  Surprise, surprise. I hate how they throw this crap out there like it's what's going to happen, when it sounds like they are grasping for straws.  I really think a WWDC announcement would definitely kick ass and I don't think they need to wait until i0S8, do they?  They can always spit out a specific model iOS update until the new version of iOS comes out.    If Apple updates the 5S, releases a ~5 inch, and then switches the 5C for the polycarb 5S, Apple is going to have some MAJOR production issues trying to keep up with demand.  I'm REALLY nervous of them playing that game.  They've had two years of this and I know customers don't like waiting during Christmas so they can give someone a present.  I just think that's stupid to play that game.  They should have tons of inventory ready to hand out as people line up and they shouldn't make people wait until after Christmas.

post #115 of 201
Quote:
Originally Posted by drblank View Post
 

Not all of them. I look at what periods of time they are talking about.  They might calculate it that far ahead, but a lot their recommendations are 12 months.  So you have to be VERY specific on the time period.  I was looking at 12 months, I guess we have to be on the same page for this.

 

I see a LOT of analysts that make 6 month to 12 month predictions most often, even though they might calculate further than that. They usually like to give 6 to 12 month guidance more often than the 2 to 3 years.  Most companies don't give enough guidance to go that far ahead, so it's not that reliable to go much past 12 months.  Heck, some of these guys can't even do 12 months with decent levels of accuracy.  A lot of companies give only more like 3 to sometimes 6 months guidance, so how can someone's 2 to 3 year guidance be as accurate?

 

Yeah, in 2 years from now, if they keep at this rate, I think it's very likely they'll hit $100 (post stock split) and stay there, if things go the way they are going, but they need to look into more market segments other than just selling iPhones and iPads into more countries.  That's just creating more markets for existing products. 

 

They need to look outside of the same slices in the pie chart for revenue.


HDTVs is a fast growing market and they COULD penetrate that to increase yet another entirely new market segment that would help solidify Apple users into sticking with Apple products.  I think it's a very natural market for them, they just have to figure it out ahead of time so they don't make any major mistakes.   The TV panel mfg have troubles making money because they all fall into the trap of hitting every price point from $200 on up and that's what kills their margins, they make entirely too many products where only some make a decent profit margin where the rest is basically dumping product at little to no money, even a loss just to move panels.


I know Google is not a startup, but for a company to go to $1000 a share without a stock split isn't common.  They should have done a stock split a long time ago, but they have been trying to get away from being purely based on advertisement as their source of revenue into going into song/app downloads, selling phones and tablets, laptops, and the various services they offer, so they really are kind of confused as to who they REALLY are.  They are kind of playing in to too many areas and just throwing crap out to see what sticks.  At least that's my opinion, but they are FAR from a mature company that's paying dividends like a Microsoft, Apple, Intel, etc.

 

Well I can't help it if they wasted so much money on Motorola, look at Facebook, they waste BILLIONS on tiny nothing companies all of the time and they just recently went public.  Also, Google paid $12.5 Billion, not $20 BIl, I don't know where you got the $20 Bil from.  Some of these companies that fall into a lot of disposable cash make some of THE dumbest decisions.  Look at the crap HP wasted Billions on.  Palm, Autonomy, etc.  boy, did they put themselves in a horrible position that will take decades to sift through before they can really recover.   I think Microsoft wasted their money on Nokia, but time will tell if they can make a go of it.


A mature company is really solidified in what they do and paying dividends.  That's how a lot of these analysts see them. I just saw one interview and this is basically what he was saying.

 

You don't get it.

 

The PE Ratio is based on 2 or 3 years earnings in the future. 

 

If not than analysis are expecting Google to DOUBLE their profits in 12 months with a PE of 28.

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post #116 of 201
Quote:
Originally Posted by sog35 View Post
 

 

You don't get it.

 

The PE Ratio is based on 2 or 3 years earnings in the future. 

 

If not than analysis are expecting Google to DOUBLE their profits in 12 months with a PE of 28.

 

http://www.investopedia.com/terms/p/price-earningsratio.asp

 

Where do you get informed about P/E ratio?  It's based on CURRENT stock price and the combination of the last 12 months of earnings.  PERIOD.  

post #117 of 201
Quote:
Originally Posted by sog35 View Post
 

 

You don't get it.

 

The PE Ratio is based on 2 or 3 years earnings in the future. 

 

If not than analysis are expecting Google to DOUBLE their profits in 12 months with a PE of 28.

Where did you come up with stuff?   Seriously.  Where did you READ this? Please cite your source.  

post #118 of 201
Quote:
Originally Posted by sog35 View Post
 

 

You need to realize most analysis calculate earnings 2 or 3 years ahead.  If Apple does 10% growth for 3 years the accumulated growth will be over 30% because of compounding. 

 

The reason why Apple was trading at $535 is because of Wall Street BS.  Period.  Earnings growth at 10-15% justifies a PE in the high teens.  A PE of 17.50 would put Apple at $700.  Costco has a PE of 24 and only grew earnings at 18% last year.

 

Google is not even close to a startup.  They already dominate internet advertising and are having trouble growing earnings.  Their revenue was up 27% last quarter but profits were up only 1%.  Problem is advertisers are not willing to spend the same amount of money on mobile ads in contrast to desktop ads.  Thus their cost per click has gone down the last 9 quarters in a row.  Also startups don't spend $20B acquiring companies like Motorolla. 

PE is solely based on the current stock price divided by the last 12 months of earnings.  Please, go take some courses in investments and once you get an A in it, then talk to me.


Analayst make all kinds of predictions in their spreadsheets, but they are using historical data, looking at trend lines, earnings from PAST history, all kinds of statistics and they also gather guidance from the company they are following, but it's VERY rare for even a company to know much more than 12 months ahead of time what they are going to do and they even revise their guidance right before earnings reports.  So, one can extrapolate out as far as they want to, but they aren't going to be that accurate and there is not one single calculation that has anything to do with 2 to 3 years down the road.  Market capitalization doesn't do that, P/E doesn't do that, Beta doesn't do that, etc,  If you go to Yahoo! Finance, they even put the 1yr target with everything else.  But that's a consensus of various analysts average.  http://finance.yahoo.com/q?s=AAPL

post #119 of 201
makes sense because its been hard to find shares to buy lately with so many being bought back
post #120 of 201
Quote:
Originally Posted by drblank View Post
 

 

http://www.investopedia.com/terms/p/price-earningsratio.asp

 

Where do you get informed about P/E ratio?  It's based on CURRENT stock price and the combination of the last 12 months of earnings.  PERIOD.  

 

Amazon has a PE of 570.

 

Are you telling me that based on what they will do in the next 12 months?

 

I'm not saying the PE is not calculated using 12 month earnings and Price.  I'm saying the actual stock price (a component of the PE ratio) is based on 2 or 3 years or even more of growth.

 

Amazon's PE ratio of 570 is not justified with what they will do in the next 12 months but rather the next 5 - 10 years.

 

So if you look at Apple growing at 8% for the next 3 years that would justify a stock price going up by 30%

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