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Goldman Sachs ups Apple price target to $720, expects exciting software at WWDC

post #1 of 35
Thread Starter 
Add Goldman Sachs to the parade of investment firms that revised their price targets on Apple stock this week, following continued gains by the iPhone maker ahead of next week's Worldwide Developers Conference and 7-for-1 stock split.




With shares of Apple repeatedly setting new 52-week highs, analyst Bill Shope increased his price target from $635 to $720 this week in a note to investors, a copy of which was provided to AppleInsider. He expects big things out of Apple's WWDC next week, where he believes the company will show off groundbreaking advancements to its software offerings.

"While Apple's software-only events have rarely captured the same level of excitement as its hardware launches, we believe this should change," Shope said. "Indeed, with the potential for substantial hardware differentiation and few new hardware categories that can substantially impact Apple's $175 billion revenue base, iOS platform differentiation is becoming increasingly critical."

Potential iOS platform enhancements the analyst anticipates include mobile payments, connected "smart homes," and personal health monitoring methods. He sees those additions as increasing the so-called "stickiness" of Apple's mobile platform, ensuring that users stick with iOS when upgrading to their next smartphone or tablet.

"Overall, while the event will be light on new hardware, we believe the potential for substantial platform enhancements at WWDC and throughout this year should serve as positive catalysts for the stock," he said. Indeed, these platform enhancements, upcoming iPhone and iPad refreshes, and Apple's continued installed base expansion should allow for multiple expansion and upward earnings revisions."


The NASDAQ MarketSite TV studio, via Luiss Villa del Campo.


Goldman Sachs joins a number of other firms who have been prompted to increase their price targets for Apple this week following the company's gains. Earlier Friday, Wells Fargo Securities revised its "valuation range" for shares of AAPL to between $595 and $640, but Apple quickly exceeded the high end of that range as soon as trading began in the morning.

UBS also increased its price target to $700 on Thursday, and told investors that it expects a significant number of user upgrades to take place when Apple releases its anticipated "iPhone 6" later this year. Barclays also upped its price target to $655 on Wednesday, saying that the new number shows "respect" for Apple's momentum headed into the second half of 2014.
post #2 of 35
Where does analysis by people who control billions in Apple stock end, and stock manipulation begin? Inquiring minds want to know.
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post #3 of 35
This shit is hilarious. Not gonna complain about increasing price targets, but these are the same banks that kept severely Downgrading the stock the whole year to ridiculous levels. What's changed? Everyone knew that there would be a wwdc around this time, and Apple has announced nothing. On what fucking basis, in terms of fundamentals, were these banks downgrading, and now upgrading the stock, with such an extreme range? Fucking clowns.
post #4 of 35

For the sake of your blood pressure, I suggest you stay away from the equities market. Consider investing in tax-free municipal bonds. Your mindset is not suited for equity investing.

post #5 of 35
So what will the stock do when a mobile payments and smart home platform aren't announced at WWDC. According to 9to5Mac, Apple is just getting started on mobile payments stuff and Gigaom claims the smart home platform is really just going to be a MFI certification program. I have a feeling there is no way this WWDC can possibly live up to the media generated hype. Of course it doesn't help when Eddy Cue says Apple's upcoming product pipeline is the best in 25 years. Way to ratchet up the pressure and expectations.
post #6 of 35
wtf, they are chasing a train.

apple will be at 800 bf the end of the yr.

these analysts are morons.
post #7 of 35
Quote:
Originally Posted by schlack View Post

wtf, they are chasing a train.

apple will be at 800 bf the end of the yr.

these analysts are morons.


800 by the end of the year??  I'll bet you that it will be 1/8th of that by the end of the year... :)

post #8 of 35
Quote:
Originally Posted by Slurpy View Post

This shit is hilarious. Not gonna complain about increasing price targets, but these are the same banks that kept severely Downgrading the stock the whole year to ridiculous levels. What's changed? Everyone knew that there would be a wwdc around this time, and Apple has announced nothing. On what fucking basis, in terms of fundamentals, were these banks downgrading, and now upgrading the stock, with such an extreme range? Fucking clowns.

Exactly.    The best of the clowns projected $635 and now the stock hit $635 and most of the 2014 product line hasn't even hit yet and so these absurdly overpaid genius are now saying, "oh yeah...we project it's going to go higher."    Duh.   What unmistakable brilliance.    A lot of these clowns had Apple practically out of business by now - "There's no innovation anymore, Android is getting all the market share, the phone market is saturated, no one is buying computers, the iPad has too much cheaper competition...wah, wah, wah."  

 

Hmmm...it's raining outside today.  I project that we're going to see a lot of umbrellas and windshield wipers moving.   Oh yeah....and the ground is going to be wet.   Can I now get paid what these fools get paid?

 

I guess my problem is that when I don't know something, I don't have the guts to claim that I do and when something is incredibly obvious to me, I assume it's obvious to everyone else as well and my opinion on the matter is of no interest to anyone else.   I guess the way you make the big money in this world is to act like a fool.  

post #9 of 35
Quote:
Originally Posted by Slurpy View Post

This shit is hilarious. Not gonna complain about increasing price targets, but these are the same banks that kept severely Downgrading the stock the whole year to ridiculous levels. What's changed? Everyone knew that there would be a wwdc around this time, and Apple has announced nothing. On what fucking basis, in terms of fundamentals, were these banks downgrading, and now upgrading the stock, with such an extreme range? Fucking clowns.

Scram. Yesterday you claimed the stock went up because of Beats which was bizarre in itself. If you can't comprehend what Cook, :rolleyes:Cue and others have been hinting at then you shouldn't be commenting. 1rolleyes.gif
 
Where's the new Apple TV?
 
 
(So Y is the new X?   Zzzzzzzzzz......)
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Where's the new Apple TV?
 
 
(So Y is the new X?   Zzzzzzzzzz......)
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post #10 of 35
Quote:
Originally Posted by Robin Huber View Post

Where does analysis by people who control billions in Apple stock end, and stock manipulation begin? Inquiring minds want to know.

How does publicly available information -- which this is -- lead to 'stock manipulation'? Inquiring minds want to know.

post #11 of 35

Analysis are there to fool people without brains.

 

Last year the analysis said to sell when the stock was at $400.

 

People need to do their own research and make their own decisions.  I'm holding 200 shares at $520.  Even when the analysis yelled to sell at $400 I ignored them.  It would be wise to ignore them now also.

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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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 #12 of 35

It's all about VILLAIN.

 

Right?  ;)

post #13 of 35
A day late and a billion dollars short. Always be suspicious when analysts' opinions align.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #14 of 35
Quote:
Originally Posted by anantksundaram View Post

How does publicly available information -- which this is -- lead to 'stock manipulation'? Inquiring minds want to know.
See this is one thing I don't get..if these analyst make their projections why are they just allowed to revise them when they become underwater? I'm no investor by any means (I'm a tiny investor compared to almost anyone else) but shouldn't they be restricted in some fashion from providing further guidance when they were found to be blatantly wrong? Of course people don't have to listen to them but they're "ratings" become nationally broadcast news that does affect how people invest in the stock. Maybe if they weren't just speculators they would provide more accurate, lasting projections.
You can't spell appeal without Apple.
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You can't spell appeal without Apple.
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post #15 of 35

I would invest in tax free municipal bonds, but their yield is less than Apple's current dividend.

 

Apple is a great investment if you either don't have internet access, you have nerves of steel, or you are being medicated for anxiety.

 

The positive thing, in my opinion, is that investors are losing their respect (rightly) for analysts.

 

Analysts used to be enshrined like movie critics.  Both are fading fast in terms of their relevance.

 

You can't cry "sky is falling" and then suddenly scream "buy apples" and maintain credibility.

 

http://investorplace.com/2014/05/aapl-stock-apple-ipad-sales/#.U3T3gTmMrJo

post #16 of 35
Quote:
Originally Posted by alcstarheel View Post

See this is one thing I don't get..if these analyst make their projections why are they just allowed to revise them when they become underwater? I'm no investor by any means (I'm a tiny investor compared to almost anyone else) but shouldn't they be restricted in some fashion from providing further guidance when they were found to be blatantly wrong? Of course people don't have to listen to them but they're "ratings" become nationally broadcast news that does affect how people invest in the stock. Maybe if they weren't just speculators they would provide more accurate, lasting projections.

As the old saying goes,* "forecasting is tough, especially if it's about the future." There isn't -- and there shouldn't be -- a law against making predictions about, or projecting the future. Nor against being wrong in one's predictions

 

Also, every decision we make is implicitly or explicitly based some prediction we have or believe about the future. So making predictions, by themselves, has nothing to do with one being a speculator.

 

The answer to your puzzlement is pretty much there in what you yourself said: people don't have to listen to them. Most smart people I know don't use analyst predictions per se, as much as they try to understand the logic or the argument that leads to his/her predictions -- that's really where there might be, among the better analysts, some occasional insight. There isn't much more to it.

 

*It has been variously attributed to Yogi Berra, Neils Bohr, Dan Quayle, and Mark Twain.

post #17 of 35
How about this software upgrade
FIX IPHOTO AND ITUNES
so they are FULLY FUNCTIONAL
on an external hard drive connected to a router
Say maybe their airport AC ???
It's a mess and needs to be FIXED
the way it is now they ARE NOT
And chews up massive chunk of my late 2013 MBP RET
I APPLE THEREFORE I AM
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I APPLE THEREFORE I AM
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post #18 of 35
Quote:
Originally Posted by Robin Huber View Post

Where does analysis by people who control billions in Apple stock end, and stock manipulation begin? Inquiring minds want to know.

Analysts themselves control nothing or very little stock. They actually. Aren't really supposed to own stock unless they disclose that information. The brokerage houses they work for hold stock, but in apple's case the number of institutional investors for Apple stock has been going down and it's actually fairly low. At least this was in a recent article that I read. So be careful in how you position these analysts.

Apple, has been the one that's been manipulating the stock when they do these large purchases, and then there are the individual investors like iCahn.that has some influence.

All analysts do is figure out what the target price is and a lot of times, they release a 12 month target. If you go to somewhere like Yahoo! Or something like that, you can look up the latest 12 month target. But I always recommend doing your own numbers and not just taking someone else's opinion just because it's more positive than someone else's. I honestly don't know how much of an impact on sales the new OS versions are going to make on hardware sales. My biggest concern is Apple's ability to not only increase demand for their products, but be able to physically make more products to meet these increased demand, but some thing haven't increased in demand, like the iPad last quarter.

So, I'm very cautious right now.
post #19 of 35
pre WWDC rally , buys some puts at 640
based on new products for fall expected and then disappoint (read where is the 6inch model iPhone only 5.5 inch perhaps, what no iWatch or whatever, who knows really) all the people who wanted to know NOW at WWDC when all the vaporware the idiot clickosphere wanted and Apple said nothing about don't materialize. and 7:1 split
pull back to 600 = $85 in short term (entry point), close out the PUT make some income
then roll up and down to 700=$100 by September or end of year more likely
Apple wants the stock to trade between $85 and $100 for rest of year then possible onward and upward as they buy back shares , of course it will roll up and down per fibonacci and as idiots (read boosters and naysayers) on this board predict highs of $800/$115 way too early and the naysayers who hate apple predict doom. All is normal

btw that choice of 7 for the split is genius, equates to $100 (creates a psychological short term resistance and possible jump off point for 2015) is the support of next long term roll and as products generate more profits, it will be the support of next upward trend. to $800 by mid to late 2015 if Christmas sales and next years sales are good enough and bull market keeps going and result come in in1st Qtr of 2015 and if the sales targets pan out
Edited by Paul94544 - 5/30/14 at 1:16pm

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



Reply

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



Reply
post #20 of 35

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



Reply

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



Reply
post #21 of 35
Quote:
Originally Posted by Paul94544 View Post

pre WWDC rally , buys some puts at 640
based on new products for fall expected and then disappoint (read where is the 6inch model iPhone only 5.5 inch perhaps, what no iWatch or whatever, who knows really) all the people who wanted to know NOW at WWDC when all the vaporware the idiot clickosphere wanted and Apple said nothing about don't materialize. and 7:1 split
pull back to 600 = $85 in short term (entry point), close out the PUT make some income
then roll up and down to 700=$100 by September or end of year more likely
Apple wants the stock to trade between $85 and $100 for rest of year then possible onward and upward as they buy back shares , of course it will roll up and down per fibonacci and as idiots (read boosters and naysayers) on this board predict highs of $800/$115 way too early and the naysayers who hate apple predict doom. All is normal

btw that choice of 7 for the split is genius, equates to $100 (creates a psychological short term resistance and possible jump off point for 2015) is the support of next long term roll and as products generate more profits, it will be the support of next upward trend. to $800 by mid to late 2015 if Christmas sales and next years sales are good enough and bull market keeps going and result come in in1st Qtr of 2015 and if the sales targets pan out

 

We will be closer to $800 than $700 by year end.  Book it.  Don't call me an idiot.

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 #22 of 35
Quote:
Originally Posted by drblank View Post

Analysts themselves control nothing or very little stock. They actually. Aren't really supposed to own stock unless they disclose that information. The brokerage houses they work for hold stock, but in apple's case the number of institutional investors for Apple stock has been going down and it's actually fairly low. At least this was in a recent article that I read. So be careful in how you position these analysts.

Apple, has been the one that's been manipulating the stock when they do these large purchases, and then there are the individual investors like iCahn.that has some influence.

All analysts do is figure out what the target price is and a lot of times, they release a 12 month target. If you go to somewhere like Yahoo! Or something like that, you can look up the latest 12 month target. But I always recommend doing your own numbers and not just taking someone else's opinion just because it's more positive than someone else's. I honestly don't know how much of an impact on sales the new OS versions are going to make on hardware sales. My biggest concern is Apple's ability to not only increase demand for their products, but be able to physically make more products to meet these increased demand, but some thing haven't increased in demand, like the iPad last quarter.

So, I'm very cautious right now.

Nice to get thoughtful answer instead of snark. Thank you.
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #23 of 35
Quote:
Originally Posted by anantksundaram View Post

How does publicly available information -- which this is -- lead to 'stock manipulation'? Inquiring minds want to know.

If it wasn't public, it wouldn't have much effect. What I am wondering is, if they publish a very bullish report on a stock, does that not influence the stock to rise? If many other big investment houses do the same, doesn't that magnify the effect? Wonder if anyone has done serious study of this.
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #24 of 35

no won't call you and idiot I will just take your money!  lol if you are sooooo sure it will be $800 by year end - really - just opinion , you don't back up you statement with any reasoned discussion, would you like to back that up with hard cash. how about a buying a $800 call option to put your opinion on the line?

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



Reply

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



Reply
post #25 of 35
Quote:
Originally Posted by Robin Huber View Post

Quote:
Originally Posted by anantksundaram View Post

How does publicly available information -- which this is -- lead to 'stock manipulation'? Inquiring minds want to know.

If it wasn't public, it wouldn't have much effect. What I am wondering is, if they publish a very bullish report on a stock, does that not influence the stock to rise? If many other big investment houses do the same, doesn't that magnify the effect? Wonder if anyone has done serious study of this.

Yes indeed. I have seen an investment newsletter writer (Louis Navellier) who includes analyst upgrades/downgrades as a parameter in his stock timeliness algorithm.
post #26 of 35
Quote:
Originally Posted by Robin Huber View Post

Quote:
Originally Posted by anantksundaram View Post

How does publicly available information -- which this is -- lead to 'stock manipulation'? Inquiring minds want to know.

If it wasn't public, it wouldn't have much effect. What I am wondering is, if they publish a very bullish report on a stock, does that not influence the stock to rise? If many other big investment houses do the same, doesn't that magnify the effect? Wonder if anyone has done serious study of this.

There is a massive amount of good academic research on the stock price impacts of analyst forecasts. See for example, this: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=271713

The short answer is, analysts can have a fairly significant impact on stock prices in the short run.
post #27 of 35
Quote:
Originally Posted by anantksundaram View Post

There is a massive amount of good academic research on the stock price impacts of analyst forecasts. See for example, this: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=271713

The short answer is, analysts can have a fairly significant impact on stock prices in the short run.

And? So what? What else is new?
post #28 of 35
Quote:
Originally Posted by drblank View Post

And? So what? What else is new?

So.... nothing?

I was just answering a goddamn question. Chill, man. Calm down.
post #29 of 35
Quote:
Originally Posted by TeaEarleGreyHot View Post
 

It's all about VILLAIN.

 

Right?  ;)

 

That makes me laugh every time. The best was still matching the stock chart to the outline of a mountain range.

post #30 of 35
Quote:
Originally Posted by Robin Huber View Post


If it wasn't public, it wouldn't have much effect. What I am wondering is, if they publish a very bullish report on a stock, does that not influence the stock to rise? If many other big investment houses do the same, doesn't that magnify the effect? Wonder if anyone has done serious study of this.

 

They could if their report is influential enough that it leads people to buy, but it would be exceptionally difficult to prove anything.  That is triply true for Apple, whose modus operandi is to keep everyone guessing.

 

A stocks valuation is the net present value of all future expected earnings.

 

Two key words there are 'future' and 'expected'  Their job is literally to predict the future.

 

To do that they start with the past and present.  When they look at Apple's past earnings and current trends they come up with a relatively easily determined valuation.  Take all their current products trends, sales, margins, cash,  plot em out, do the math....  And you come up with Apple's valuation based on current streams.  Lets say that value comes out to $500 billion dollars.  The trick is that that is not an accurate reflection of Apples value.  They have plans for the future.  Those are secret, so lets call them '???'

 

So Apple's correct valuation would then be:

Value = $500b + ???

 

So, how much do *you* think ??? is worth?  At its rise in 2012, speculation on how big ??? could be drove the stock price to very high levels.  When the actual value of ??? turned out to be far less, the price dropped.  Since then the value of ??? has diminished considerably as Apple hasn't delivered new blockbuster products 'lately.'   That is almost a ridiculous thing to say as they have generated new revenue streams that most companies would drool over.  App store generating $1 billion in revenue ??!!!  Most companies would soar over that.  To Apple it barely even registers because it is only 1/170th of their revenues.  For anything to move Apple's share price it has to be *huge* (or any shift one way or the other in iPhone sales, as that is what generates most of that $170 billion a year).

 

Apple did have positive numbers Q2 which caused a legitimate jump in share price.  But the current takeoff in price is beyond being based on that, it is primarily based on the belief that ??? will be much bigger than expected.  It is *NOT* being driven by analysts in my opinion, but rather by fans.  And now that they have started the process, the ride gets scary.  Because the stock price is going up, analysts are now upping their estimates...   not based on current financials, not based on accurate knowledge of what those future products in ???, but simply because the price is going up because fans are buying shares (note the relatively cool reception of institutional investors, who have largely stayed away).  So fans drive the price up, because of that analysts drive up their targets to match, but that just convinces enthusiasts they are 'right' and they buy more and the price goes higher until things get out of hand.  If the institutionals decide to lay in then things really get crazy.  At some point Apple's ??? may or may not get released.  By the time it is released that other keyword besides 'future'.... "expectations" are so high that even staggering amounts of sales will fall short.

 

At that point if the institutional funds are in (they can range from 30% to 50% ownership of Apple), they pull out- fast and in large quantities.  The stock absolutely tanks despite 'record sales'  (remember that their current valuation was based on record sales + ???).  The small guys who were so exuberant on the ride up are left holding the bag.  Many of them panic and sell off as well.  Nobody trusts the stock again for a long long time.  Then, two years later....   It all happens again.

post #31 of 35
They're Playing The Game of Targetting AAPL, For Sure !

Plural Analysts Already Targetted AAPL to $1000 in 2012 Before It Hit All Time High of $705 on September 21.

So Is It A " Vicious Deja Vu " ?
post #32 of 35
Originally Posted by NOFEER View Post
How about this software upgrade
FIX IPHOTO AND ITUNES
so they are FULLY FUNCTIONAL
on an external hard drive connected to a router
Say maybe their airport AC ???
It's a mess and needs to be FIXED
the way it is now they ARE NOT
And chews up massive chunk of my late 2013 MBP RET

 

So report your problems to Apple.

post #33 of 35
Quote:
Originally Posted by Paul94544 View Post
 

no won't call you and idiot I will just take your money!  lol if you are sooooo sure it will be $800 by year end - really - just opinion , you don't back up you statement with any reasoned discussion, would you like to back that up with hard cash. how about a buying a $800 call option to put your opinion on the line?

 

I hold 200 shares of Apple.  I don't play the option game because its too easy for MM's to manipulate the stock price in the short term.  

 

I'm expecting Apple to have a PE of 17 with $44 EPS = $750 per share.

Keep in mind the average S&P500 company has a PE of 19.5.

 

Add in hype and I can easily see this stock hit the $765-$785 level, maybe even $800

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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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 #34 of 35
Quote:
Originally Posted by Frood View Post
 

 

They could if their report is influential enough that it leads people to buy, but it would be exceptionally difficult to prove anything.  That is triply true for Apple, whose modus operandi is to keep everyone guessing.

 

A stocks valuation is the net present value of all future expected earnings.

 

Two key words there are 'future' and 'expected'  Their job is literally to predict the future.

 

To do that they start with the past and present.  When they look at Apple's past earnings and current trends they come up with a relatively easily determined valuation.  Take all their current products trends, sales, margins, cash,  plot em out, do the math....  And you come up with Apple's valuation based on current streams.  Lets say that value comes out to $500 billion dollars.  The trick is that that is not an accurate reflection of Apples value.  They have plans for the future.  Those are secret, so lets call them '???'

 

So Apple's correct valuation would then be:

Value = $500b + ???

 

So, how much do *you* think ??? is worth?  At its rise in 2012, speculation on how big ??? could be drove the stock price to very high levels.  When the actual value of ??? turned out to be far less, the price dropped.  Since then the value of ??? has diminished considerably as Apple hasn't delivered new blockbuster products 'lately.'   That is almost a ridiculous thing to say as they have generated new revenue streams that most companies would drool over.  App store generating $1 billion in revenue ??!!!  Most companies would soar over that.  To Apple it barely even registers because it is only 1/170th of their revenues.  For anything to move Apple's share price it has to be *huge* (or any shift one way or the other in iPhone sales, as that is what generates most of that $170 billion a year).

 

Apple did have positive numbers Q2 which caused a legitimate jump in share price.  But the current takeoff in price is beyond being based on that, it is primarily based on the belief that ??? will be much bigger than expected.  It is *NOT* being driven by analysts in my opinion, but rather by fans.  And now that they have started the process, the ride gets scary.  Because the stock price is going up, analysts are now upping their estimates...   not based on current financials, not based on accurate knowledge of what those future products in ???, but simply because the price is going up because fans are buying shares (note the relatively cool reception of institutional investors, who have largely stayed away).  So fans drive the price up, because of that analysts drive up their targets to match, but that just convinces enthusiasts they are 'right' and they buy more and the price goes higher until things get out of hand.  If the institutionals decide to lay in then things really get crazy.  At some point Apple's ??? may or may not get released.  By the time it is released that other keyword besides 'future'.... "expectations" are so high that even staggering amounts of sales will fall short.

 

At that point if the institutional funds are in (they can range from 30% to 50% ownership of Apple), they pull out- fast and in large quantities.  The stock absolutely tanks despite 'record sales'  (remember that their current valuation was based on record sales + ???).  The small guys who were so exuberant on the ride up are left holding the bag.  Many of them panic and sell off as well.  Nobody trusts the stock again for a long long time.  Then, two years later....   It all happens again.

 

The reason Apple shares tanked from late 2012 to mid 2013 was negative earnings growth.

 

Apple went from growing earnings 75% to negative 10%.  A lot of Apple stock was held by momentum and growth investors/funds.  With the first sign of slowing earnings they began to sell (Oct 2012).  The Dec2012 earnings showed negative earnings and all hell broke lose.  Growth/Momentum investors could not get out fast enough and were willing to sell immediately to lock in significant gains.  This lead to panic and many of the more fundamental investors began to panic and sell also.

 

The only thing that stopped the bleeding was Apple's capital allocation plans (increase buyback and dividend).  Apple was transitioning from a pure growth play to a value/income investment.  It was a painful transition that took 12 months.  Finally in Dec2013 and Mar2014 quarters we saw 10-15% EPS growth again.  Thus the share price went on a run to $644.  If they continue to show 10-20% EPS growth this stock will see $750-$800 in 12 months.

 

The risk this time is much less than in 2012.  The reason is the stock is now held by a ton of value/income investors.  Many bought at $385-$425 levels that gives them a nice 3.5% dividend yield.  They won't be selling anytime soon with such a nice yield and a low basis of $385-$425.

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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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 #35 of 35
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Originally Posted by zoetmb View Post

Quote:
Originally Posted by Slurpy View Post

This shit is hilarious. Not gonna complain about increasing price targets, but these are the same banks that kept severely Downgrading the stock the whole year to ridiculous levels. What's changed? Everyone knew that there would be a wwdc around this time, and Apple has announced nothing. On what fucking basis, in terms of fundamentals, were these banks downgrading, and now upgrading the stock, with such an extreme range? Fucking clowns.
Exactly.    The best of the clowns projected $635 and now the stock hit $635 and most of the 2014 product line hasn't even hit yet and so these absurdly overpaid genius are now saying, "oh yeah...we project it's going to go higher."    Duh.   What unmistakable brilliance.    A lot of these clowns had Apple practically out of business by now - "There's no innovation anymore, Android is getting all the market share, the phone market is saturated, no one is buying computers, the iPad has too much cheaper competition...wah, wah, wah."  

Hmmm...it's raining outside today.  I project that we're going to see a lot of umbrellas and windshield wipers moving.   Oh yeah....and the ground is going to be wet.   Can I now get paid what these fools get paid?

I guess my problem is that when I don't know something, I don't have the guts to claim that I do and when something is incredibly obvious to me, I assume it's obvious to everyone else as well and my opinion on the matter is of no interest to anyone else.   I guess the way you make the big money in this world is to act like a fool.  

Steady on; that's almost too much truth in one post for me to take in.
"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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