the underwhelming launch of the iPhone 4S didn't help.
How many companies would kill for such an "underwhelming" launch? Just about any of them?
Quote:
And yes, I'm well aware of the spin of the fastest selling iPhone ever
What you really mean is "damn those inconvenient facts"
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-- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.
Why is it a miracle? Because it blows your whole "underwhelming" thesis out of the water?
And could it be they launched in more countries than the iPhone 4 because, oh, I don't know - they anticipated demand and scaled up?
Shh - don't tell Gatorguy that - his head will explode.
You two make a matched pair
Quote:
The percentage growth rate AAPL has been on has been stunning, to be sure. But the low P/E indicates that the market, as a whole, thinks the ride is over and that kind of growth is not going to continue. Especially sans Jobs.
Yup, and exactly how many more years of accelerating growth do you think it will be before that rubber band snaps and reality catches up? Apple has just started with iOS devices - the potential market for them is huge - orders of magnitude larger than PC sales ever were.
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But I know a great many people who now won't touch AAPL stock.
Yes, in the future they will be referred to as regretful.
I need another Apple product launch to cause another temporary dip so I can pick up more cheap shares...
The most common objection I hear from people about the long term prospects of Apple stock is that for AAPL stock to double in price, the company has to deliver the equivalent of another Apple, Inc., and so how could that be possible?
The analogy is like "Look, you already have a 98 year old man here, and even though he is in superb health, and might live another couple of years, surely he is not going to live to be 200 years old!"
What people and especially fund managers don't realize is that Apple is not a 98 year old man, but probably more like a 50 year old guy that is moving with the athleticism, agility and strength of a 20 year old.
As independent bloggers like Andy Zaky, Daniel Tello and Horace Horace have repeatedly shown, Apple indeed could generate another Apple's worth of revenues and earnings, even with all the escalating competition all around.
Unfortunately, that message has not gotten around, so there are skeptics all over the place. It certainly doesn't help when talking heads on CNBC keep propping up every piece of LCD as an "iPad Killer" ad nauseum.
Unfortunately, Apple, the company itself, is doing nothing to help out the shareholders. Steve Jobs never cared for Wall Street, and disdained people who were in it for the money. However, that approach is inappropriate today, given Apple's market cap.
A key part of being a public company involves at least an effort on the part of the company to make existing shareholders comfortable with the company, and attract new investors. Part of the job function for Tim Cook is to build up the price of the stock. I am not proposing hyping up the stock price, but the company has to at least let the stock price rise above its deeply depressed levels.
That means being a little more visible to the investment community, providing a little more upbeat vision for the company, placing a put under the market by announcing a share buy back, periodically splitting the stock, and spending money on a few PR programs to build a little buzz about the stock. Surely, Apple needs no education on building a little buzz.
I am not one of those calling for a cash payout or dividend, because I believe Apple is still a growth story and not a dividend story. But the company has to do a few things to make the markets understand that Apple is still a growth story.
This is actually very important for the future of Apple, as a company, as well. Because if the stock continues to languish at absurdly low prices, and the PE ratio keeps getting compressed quarter after quarter, soon it will have a huge demoralizing effect on the employee base.
Like it or not, employees of the company need to pay their mortgages, send their kids to school and save a nest egg for retirement. Sooner or later, people will start realizing that their hard work and effort will have far greater upside at other companies than at Apple, and that could lead to a growing exodus of talent, as the best and the brightest are always the first ones to leave. So by not having the stock perform well, Apple seriously risks losing key talent.
Apple has the potential to become the world's first Trillion dollar market cap company. By any objective criteria, Apple should already be in the $600-700 billion range in market cap. The stock is trading at half its value, even by conservative estimates, and this is not healthy for the company's employees and shareholders.
Kudos to Andy Zaky and the independent bloggers for their efforts in shedding light on this issue, but Apple Brass had better wake up, too, and do what the company can do to support the stock.
There was record demand for the iPhone 4S just in the USA alone (without those extra countries), so your point about it being available in more countries is a moot point.
Actually it's far from moot - it thoroughly destroys his "underwhelming" thesis...
Imagine how many more underwhelming iPhone 4Ss Apple could have sold if they weren't holding back
Correct. They are speculating that the shares themselves will increase in value, and that they will be able to sell them for a capital gain, rather than buying them to generate investment income.
Stock buyers treat Apple like it is a growth company.
Quote:
Originally Posted by ConradJoe
Apple's computer business can be compared to other luxury consumer durables companies, like KitchenAid . Apple's consumer gadget business can be compared to other CE companies.
You really should not be commenting on any matters of finance or economics in this Forum.
Actually, strike the words "...of finance or economics...."
Perhaps those who are supposedly being envious are just annoyed that someone dispensing financial advice doesn't preface the article with whether or not they own Apple stock.
Again, while I do believe it is relevant and should be disclosed - even if it were disclosed that he does, how exactly does it change his premise?
And no, "I don't like it" isn't a sufficient reason. It may be good enough for your personal preference, but not to impugn someone's integrity.
Apple products are stronger than ever, and those who feel like the company has "peaked" because of its enormous wealth and success, are very mistaken. The iPhone has a VERY small market-share in the overall Mobile Phone market
hehe - and the real "secret" is the future growth won't be in phones at all. To me the iPhone is the incubator for the iPad and it's successors in the same way the iMac helped lay the financial and business foundation for Apple to launch the iPod.
Phones will be huge, but the potential market for a utilitarian iOS device is literally every person on the planet. Hyperbolic? I guess we shall see!
It's only a matter of time before Apple releases a product and everyone goes - meh.
It's more likely they will release a product that everyone goes crazy for.
You invest based on your perception of reality, I'll invest based on mine and in the "end" we can compare notes and see who did better. That is the ultimate game, no?
You know, I have been here for far longer than my username shows (4-5 years), and this is where I found Andy originally. He has been right again and again for years. His argument is that if Apple's share price doesn't go up, even with marginal growth it will have enough cash to buy itself in short order. He was the one who pointed out the iPhone subscription accounting issue, and I have done quite well using his analysis.
So the author thinks he knows better than the many thousands of market participants, weighing all the pros and cons, who have made the price what it is. He is smarter than *all those thousands.*
Actually he probably is. Were back to the monkeys/Shakespeare thing again...
Quote:
Mate, there is a place for those who think they're smarter than everybody else: Washington, D.C.
Oh please - it's an opinion on an Apple rumor site, not a fucked up policy destined to bankrupt the country - forget apples to oranges, your comparing grains of sand to universes
They hold all of the profits in the company for acquisitions, large supply chain investments, and a huge amount of liquidity.
Sounds smart!
Quote:
This strategy has served them extremely well over the last few years, and I'm sure they're reluctant to change it, hence no dividend payments.
You mean it was smart? Why exactly should they change it then?
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So how does one make any money off of Apple stock? Well you can buy it, and hope the stock price goes up, or you can short-sell it hoping the price goes down. Not very much like owning a piece of a business, is it?
Er, the way you traditionally make money - buy it and hope it goes up. Until Apple stops growing, I don't count on them paying dividends - and I don't think they have any intention of stopping growth any time soon. Nor would I want them to!
Quote:
Until Apple decides the time is right to change their stock strategy, I think the volatility will remain, and AAPL will remain one of the most manipulated stocks in the US.
Probably right. One can hope anyway. Each time it swings low, it's the perfect time to add more!
Great analysis, really lays it out. The market can't figure out Apple because there has never been an ULTRA CAP company before. You have to. "Think Different" to get the impact of this truly unique asset class. The so called "analysts" try to measure Apple against historic standards. Point is, as your detailed analysis shows in no uncertain terms, there are no "comps" when it comes to Apple and it's unprecedented growth. Can't wait to see future articles.
He doesn't know what he thinks. Cheap accusations are easy. Disproving a thesis other than by ad hominem might take some effort and/or not turn out the way he hopes
The thing I would like is Apple to start paying dividends because why am I investing if something if I dont have part of the profits? fundamentals is key here.
The biggest fundamental of all is "cash is king". Unless you are one of those who myopically think Apple is done growing. Or don't care as long as you get your "share"
Secondly, Zaky's comments are a discussion of a balance sheet. I've never heard of anyone trying to surreptitiously move a stock by analyzing a company's balance sheet. (unless maybe the numbers were fabricated, which is clearly not the case with Zaky's article)
Stop bringing logic and reason to Internet forums! You'll upset the delicate balance of the ecosystem - think of the poor trolls!
Great post, though. I'm impressed by the number of rational posts - maybe the overall quality of AI is improving. It looks promising!
Comments
the underwhelming launch of the iPhone 4S didn't help.
How many companies would kill for such an "underwhelming" launch? Just about any of them?
And yes, I'm well aware of the spin of the fastest selling iPhone ever
What you really mean is "damn those inconvenient facts"
-- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.
Why is it a miracle? Because it blows your whole "underwhelming" thesis out of the water?
And could it be they launched in more countries than the iPhone 4 because, oh, I don't know - they anticipated demand and scaled up?
Shh - don't tell Gatorguy that - his head will explode.
You two make a matched pair
The percentage growth rate AAPL has been on has been stunning, to be sure. But the low P/E indicates that the market, as a whole, thinks the ride is over and that kind of growth is not going to continue. Especially sans Jobs.
Yup, and exactly how many more years of accelerating growth do you think it will be before that rubber band snaps and reality catches up? Apple has just started with iOS devices - the potential market for them is huge - orders of magnitude larger than PC sales ever were.
But I know a great many people who now won't touch AAPL stock.
Yes, in the future they will be referred to as regretful.
I need another Apple product launch to cause another temporary dip so I can pick up more cheap shares...
The analogy is like "Look, you already have a 98 year old man here, and even though he is in superb health, and might live another couple of years, surely he is not going to live to be 200 years old!"
What people and especially fund managers don't realize is that Apple is not a 98 year old man, but probably more like a 50 year old guy that is moving with the athleticism, agility and strength of a 20 year old.
As independent bloggers like Andy Zaky, Daniel Tello and Horace Horace have repeatedly shown, Apple indeed could generate another Apple's worth of revenues and earnings, even with all the escalating competition all around.
Unfortunately, that message has not gotten around, so there are skeptics all over the place. It certainly doesn't help when talking heads on CNBC keep propping up every piece of LCD as an "iPad Killer" ad nauseum.
Unfortunately, Apple, the company itself, is doing nothing to help out the shareholders. Steve Jobs never cared for Wall Street, and disdained people who were in it for the money. However, that approach is inappropriate today, given Apple's market cap.
A key part of being a public company involves at least an effort on the part of the company to make existing shareholders comfortable with the company, and attract new investors. Part of the job function for Tim Cook is to build up the price of the stock. I am not proposing hyping up the stock price, but the company has to at least let the stock price rise above its deeply depressed levels.
That means being a little more visible to the investment community, providing a little more upbeat vision for the company, placing a put under the market by announcing a share buy back, periodically splitting the stock, and spending money on a few PR programs to build a little buzz about the stock. Surely, Apple needs no education on building a little buzz.
I am not one of those calling for a cash payout or dividend, because I believe Apple is still a growth story and not a dividend story. But the company has to do a few things to make the markets understand that Apple is still a growth story.
This is actually very important for the future of Apple, as a company, as well. Because if the stock continues to languish at absurdly low prices, and the PE ratio keeps getting compressed quarter after quarter, soon it will have a huge demoralizing effect on the employee base.
Like it or not, employees of the company need to pay their mortgages, send their kids to school and save a nest egg for retirement. Sooner or later, people will start realizing that their hard work and effort will have far greater upside at other companies than at Apple, and that could lead to a growing exodus of talent, as the best and the brightest are always the first ones to leave. So by not having the stock perform well, Apple seriously risks losing key talent.
Apple has the potential to become the world's first Trillion dollar market cap company. By any objective criteria, Apple should already be in the $600-700 billion range in market cap. The stock is trading at half its value, even by conservative estimates, and this is not healthy for the company's employees and shareholders.
Kudos to Andy Zaky and the independent bloggers for their efforts in shedding light on this issue, but Apple Brass had better wake up, too, and do what the company can do to support the stock.
There was record demand for the iPhone 4S just in the USA alone (without those extra countries), so your point about it being available in more countries is a moot point.
Actually it's far from moot - it thoroughly destroys his "underwhelming" thesis...
Imagine how many more underwhelming iPhone 4Ss Apple could have sold if they weren't holding back
Its this lemming like behavior that provides great opportunities in the market for people who are rational.
Excellent post. Then again expecting rational thoughts on an internet forum really is pissing in the wind.
Actually it's far from moot - it thoroughly destroys his "underwhelming" thesis...
Imagine how many more underwhelming iPhone 4Ss Apple could have sold if they weren't holding back
He claims Apple is doing it to jack up prices yet competitors are having trouble competing on price.
Disclaimer: The author probably has stock in Apple...
And even if true - that changes the facts and arguments he laid out how?
Casting aspersions does not a rational discussion make
Correct. They are speculating that the shares themselves will increase in value, and that they will be able to sell them for a capital gain, rather than buying them to generate investment income.
Stock buyers treat Apple like it is a growth company.
Apple's computer business can be compared to other luxury consumer durables companies, like KitchenAid . Apple's consumer gadget business can be compared to other CE companies.
You really should not be commenting on any matters of finance or economics in this Forum.
Actually, strike the words "...of finance or economics...."
Perhaps those who are supposedly being envious are just annoyed that someone dispensing financial advice doesn't preface the article with whether or not they own Apple stock.
Again, while I do believe it is relevant and should be disclosed - even if it were disclosed that he does, how exactly does it change his premise?
And no, "I don't like it" isn't a sufficient reason. It may be good enough for your personal preference, but not to impugn someone's integrity.
Apple products are stronger than ever, and those who feel like the company has "peaked" because of its enormous wealth and success, are very mistaken. The iPhone has a VERY small market-share in the overall Mobile Phone market
hehe - and the real "secret" is the future growth won't be in phones at all. To me the iPhone is the incubator for the iPad and it's successors in the same way the iMac helped lay the financial and business foundation for Apple to launch the iPod.
Phones will be huge, but the potential market for a utilitarian iOS device is literally every person on the planet. Hyperbolic? I guess we shall see!
i'd like to see an in-depth analysis by someone who doesn't have money at stake in the game. cuz i'll guarantee you, zaky is in it for the money.
Here's a crazy thought - read the article intelligently and point out where his obvious bias is rather than attacking him personally?
The ad hominem is the weakest of the logical fallacies. And also why it's the most popular - especially on the Internet
It's only a matter of time before Apple releases a product and everyone goes - meh.
It's more likely they will release a product that everyone goes crazy for.
You invest based on your perception of reality, I'll invest based on mine and in the "end" we can compare notes and see who did better. That is the ultimate game, no?
So the author thinks he knows better than the many thousands of market participants, weighing all the pros and cons, who have made the price what it is. He is smarter than *all those thousands.*
Actually he probably is. Were back to the monkeys/Shakespeare thing again...
Mate, there is a place for those who think they're smarter than everybody else: Washington, D.C.
Oh please - it's an opinion on an Apple rumor site, not a fucked up policy destined to bankrupt the country - forget apples to oranges, your comparing grains of sand to universes
Apple has followed a growth stock philosophy.
Maybe because they are a growth company
They hold all of the profits in the company for acquisitions, large supply chain investments, and a huge amount of liquidity.
Sounds smart!
This strategy has served them extremely well over the last few years, and I'm sure they're reluctant to change it, hence no dividend payments.
You mean it was smart? Why exactly should they change it then?
So how does one make any money off of Apple stock? Well you can buy it, and hope the stock price goes up, or you can short-sell it hoping the price goes down. Not very much like owning a piece of a business, is it?
Er, the way you traditionally make money - buy it and hope it goes up. Until Apple stops growing, I don't count on them paying dividends - and I don't think they have any intention of stopping growth any time soon. Nor would I want them to!
Until Apple decides the time is right to change their stock strategy, I think the volatility will remain, and AAPL will remain one of the most manipulated stocks in the US.
Probably right. One can hope anyway. Each time it swings low, it's the perfect time to add more!
Great analysis, really lays it out. The market can't figure out Apple because there has never been an ULTRA CAP company before. You have to. "Think Different" to get the impact of this truly unique asset class. The so called "analysts" try to measure Apple against historic standards. Point is, as your detailed analysis shows in no uncertain terms, there are no "comps" when it comes to Apple and it's unprecedented growth. Can't wait to see future articles.
I'm 1999 and I approve this message.
So you think he made up the data?
He doesn't know what he thinks. Cheap accusations are easy. Disproving a thesis other than by ad hominem might take some effort and/or not turn out the way he hopes
How do you get an upswing is no one is buying?
No one is ever going to buy?
Ever?
Sometimes I wonder how the human race has progressed to where it is - amazing really...
The Street seems to reward loss and short-term thinking more than sales, profits and long term strategy, at least in Apple's case.
Unfortunately it's not just Apple's case. Which is why we are in the crapper and sinking fast
The thing I would like is Apple to start paying dividends because why am I investing if something if I dont have part of the profits? fundamentals is key here.
The biggest fundamental of all is "cash is king". Unless you are one of those who myopically think Apple is done growing. Or don't care as long as you get your "share"
Secondly, Zaky's comments are a discussion of a balance sheet. I've never heard of anyone trying to surreptitiously move a stock by analyzing a company's balance sheet. (unless maybe the numbers were fabricated, which is clearly not the case with Zaky's article)
Stop bringing logic and reason to Internet forums! You'll upset the delicate balance of the ecosystem - think of the poor trolls!
Great post, though. I'm impressed by the number of rational posts - maybe the overall quality of AI is improving. It looks promising!