Apple set to announce likely its best quarter ever on January 24

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Comments

  • Reply 21 of 64
    Quote:
    Originally Posted by stelligent View Post


    History does not support that observation, although I understand it's gratifying to be cynical.







    How does that make you look intelligent or enlightened?



    Because, he's right - it's true. History absolutely supports his statement, or at least for the past 15 years that I've been following the stock. As a rule, Apple appreciates until one to two days prior to the earnings announcement. Then, no matter the news, Apple stays flat or drops. If it's extra, really good, super exciting news, it MIGHT gain 5%.



    Apple, unfortunately, is a rumor-driven stock, as evidenced by the fact that it doesn't adhere to normal market metrics and no one can seem to "figure it out" - analysts included. The vast majority of rumor information in the public domain is traded and amplified on a single website - this one (arguably the most important Apple rumor site on the internet)- and I'm sure you've noticed the stock rise or fall based on a report disseminated from appleinsider.com. Apple's stock price volitility is amplified because analysts really don't *get* why consumers are willing to pay slightly more for what they continue to mistakenly think has become a commodity.
  • Reply 22 of 64
    Quote:
    Originally Posted by melgross View Post


    Historically, Apple's share price goes up more than it goes down right after their earnings reports.



    Don't believe it based on my experience. Numbers, please.



    Guess that also depends on how "right after" is defined. One day? One week? One month? I'll agree that the stock rebounds fairly consistently after earnings, but I still say it goes down more often than up.
  • Reply 23 of 64
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by stelligent View Post


    History does not support that observation, although I understand it's gratifying to be cynical.



    QFT. If Apple beats consensus expectations by at least 10% the stock usually rises on the news. Anything less is generally taken as a disappointment. This is the pattern we've seen over and over again.



    We also have to like how the term "record quarter" is tossed around as though it has any meaning. An increase in EPS of $0.01 would be a "record" -- but it would also be a disaster. Year over year growth is what matters to investors, and that's not mentioned here at all.
  • Reply 24 of 64
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    I'm not too disappointed with Apple's share price. Look at the comparisons:



    Dow Jones average up 5.5% for the year.



    Standard and Poor's 500 was flat for the year, ending up almost exactly where it began, and



    Nasdaq down 1.8% for the year while Apple was



    UP 25.56%.



    So yes, While the P/E, trailing, leading, etc were down, performance of the stock was very good. How many people can say their investments go up about 25-30% year after year?



    I know you're comfortable with compressing PE, but I'm not. The reason AAPL managed a 25% increase in 2011 is because earnings were up by twice that much. If this had occurred in only one year, I would not be very concerned (the entire market behaved that way in 2011), but in the case of AAPL it's been going on for several years running now. This is not a comforting trend, particularly as we move inevitably towards lower earnings growth rates. The market is anticipating this way in advance of the actual event so the concern has to be what happens when earnings growth rates actually do decline.



    We haven't had this little debate for a while. I wonder if anything has changed?
  • Reply 25 of 64
    melgrossmelgross Posts: 33,232member
    Quote:
    Originally Posted by quinney View Post


    I think you are projecting. That might be your nature, but it is not the nature of all humans.



    Sure it is. Take some psychology courses.
  • Reply 26 of 64
    melgrossmelgross Posts: 33,232member
    Quote:
    Originally Posted by parksgm View Post


    Because, he's right - it's true. History absolutely supports his statement, or at least for the past 15 years that I've been following the stock. As a rule, Apple appreciates until one to two days prior to the earnings announcement. Then, no matter the news, Apple stays flat or drops. If it's extra, really good, super exciting news, it MIGHT gain 5%.



    Apple, unfortunately, is a rumor-driven stock, as evidenced by the fact that it doesn't adhere to normal market metrics and no one can seem to "figure it out" - analysts included. The vast majority of rumor information in the public domain is traded and amplified on a single website - this one (arguably the most important Apple rumor site on the internet)- and I'm sure you've noticed the stock rise or fall based on a report disseminated from appleinsider.com. Apple's stock price volitility is amplified because analysts really don't *get* why consumers are willing to pay slightly more for what they continue to mistakenly think has become a commodity.



    It's not true though. Several months ago Andy Zaky did a good article on this.
  • Reply 27 of 64
    melgrossmelgross Posts: 33,232member
    Quote:
    Originally Posted by parksgm View Post


    Don't believe it based on my experience. Numbers, please.



    Guess that also depends on how "right after" is defined. One day? One week? One month? I'll agree that the stock rebounds fairly consistently after earnings, but I still say it goes down more often than up.



    Don't believe it. I've been investing in Apple for some time, and this is what I see. If you're watching the winter months, then Apples price often drops then, and of course, dropped during the recession, which lasted for some time. Without realizing it, people have that time stuck in their minds.
  • Reply 28 of 64
    melgrossmelgross Posts: 33,232member
    Quote:
    Originally Posted by Dr Millmoss View Post


    I know you're comfortable with compressing PE, but I'm not. The reason AAPL managed a 25% increase in 2011 is because earnings were up by twice that much. If this had occurred in only one year, I would not be very concerned (the entire market behaved that way in 2011), but in the case of AAPL it's been going on for several years running now. This is not a comforting trend, particularly as we move inevitably towards lower earnings growth rates. The market is anticipating this way in advance of the actual event so the concern has to be what happens when earnings growth rates actually do decline.



    We haven't had this little debate for a while. I wonder if anything has changed?



    I'm not comfortable with it, but I'm growing used to it. It can't compress forever. And I often wonder if P/E's are really expressing actual value, or whether they're pretty much all too high. The numbers assume certain values for articles which may not be as relevant as others. Just because the markets have certain P/E's for different industries doesnt mean those numbers are correct. Perhaps anything over a P/E of 20 is massive over exuberance.



    Why is Amazon over a 90 P/E? Makes no sense.
  • Reply 29 of 64
    bwikbwik Posts: 564member
    As impressive as AAPL is, it's by definition one of the more likely stocks to disappoint, especially 3-5 years out. Such growth cannot continue. A piece of knowledge we have is that it can't grow to 1 trillion valuation. I predict they will handle maturity far better than Sony. And Sony was full of highly intelligent leaders in electronics. Eventually the valuation was... near zero. AAPL has one decade down. They are doing great. I say congratulations. Eventually Apple will be the grandpa in the industry. Rot can set in. They are doing an ideal job, but they are still human.
  • Reply 30 of 64
    melgrossmelgross Posts: 33,232member
    Quote:
    Originally Posted by bwik View Post


    As impressive as AAPL is, it's by definition one of the more likely stocks to disappoint, especially 3-5 years out. Such growth cannot continue. A piece of knowledge we have is that it can't grow to 1 trillion valuation. I predict they will handle maturity far better than Sony. And Sony was full of highly intelligent leaders in electronics. Eventually the valuation was... near zero. AAPL has one decade down. They are doing great. I say congratulations. Eventually Apple will be the grandpa in the industry. Rot can set in. They are doing an ideal job, but they are still human.



    Well, there's no doubt that the law of large numbers must come about. It might show up this year. But Apple won't likely show 10% growth a year for years. Can it reach $1 trillion? Sure it can! There's no reasonable number that's out of reach eventually. Inflation alone will account for that. It's only 2.6 times Apple's current value as of close today. Asked ten years ago, no one would have thought Apple would have been worth $100 billion, much less almost $400 billion.



    I read one very silly financial article that said Apple would never reach $1 trillion because?get this: "no other company ever did." A sillier reason has rarely been expressed.
  • Reply 31 of 64
    Quote:
    Originally Posted by Dr Millmoss View Post


    I know you're comfortable with compressing PE, but I'm not. The reason AAPL managed a 25% increase in 2011 is because earnings were up by twice that much. If this had occurred in only one year, I would not be very concerned (the entire market behaved that way in 2011), but in the case of AAPL it's been going on for several years running now. This is not a comforting trend, particularly as we move inevitably towards lower earnings growth rates. The market is anticipating this way in advance of the actual event so the concern has to be what happens when earnings growth rates actually do decline.



    We haven't had this little debate for a while. I wonder if anything has changed?



    Do you think AAPL will:



    a) keep its price near present levels and therefore move the p/e higher?



    b) move down in price but keep the current p/e ratio?



    c) compress the p/e even further by moving down dramatically?



    The scariest one would be c and that's what I'm afraid would happen... sadly.
  • Reply 32 of 64
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    I'm not comfortable with it, but I'm growing used to it. It can't compress forever. And I often wonder if P/E's are really expressing actual value, or whether they're pretty much all too high. The numbers assume certain values for articles which may not be as relevant as others. Just because the markets have certain P/E's for different industries doesnt mean those numbers are correct. Perhaps anything over a P/E of 20 is massive over exuberance.



    Why is Amazon over a 90 P/E? Makes no sense.



    I remembered in the past you saying you felt that the lower PE reduced the downside risk factor.



    What PE expresses is investor sentiment, the premium they are willing to pay for future growth potential. For reasons that elude me, investors are expecting massive growth rates out of AMZN. With a PEG of nearly 6 they aren't getting them, but the expectations continue. For comparison, the PEG for AAPL is 0.6, so in this case investors are getting growth but not expecting it. Looking for logic there? Good luck.



    What we might be forgetting here is our old friend momentum. Markets can drive stocks higher or lower for no other good reason than they are already moving in that direction. The herd effect is a powerful one. I suspect a comeuppance is due for AMZN but I would not hazard a guess as to when.
  • Reply 33 of 64
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by island hermit View Post


    Do you AAPL will:



    a) keep the stock price near present levels and therefore move the p/e higher?



    b) move the stock price down - keeping the current p/e ratio?



    c) compress the p/e even further by moving the sp down dramatically?



    The scariest one would be c and that's what I'm afraid would happen... sadly.



    If I understand what you are asking, I think you might be getting this backwards. If earnings increase (as we know they will) and the stock price does not increase proportionally, then PE compresses further. This is what's been going on for several years now. If Apple's earnings growth rate were to decline from its present neighborhood of 50% annually then I suspect the markets would lower the PE further by selling off the stock. AAPL could end up with a chart like MSFT.
  • Reply 34 of 64
    Quote:
    Originally Posted by Dr Millmoss View Post


    If I understand what you are asking, I think you might be getting this backwards. If earnings increase (as we know they will) and the stock price does not increase proportionally, then PE compresses further. This is what's been going on for several years now. If Apple's earnings growth rate were to decline from its present neighborhood of 50% annually then I suspect the markets would lower the PE further by selling off the stock. AAPL could end up with a chart like MSFT.



    Oh, I meant if the earnings growth rate declined.



    I realized that if growth declined they wouldn't raise the p/e... but I just had to add that as one scenario, even if it only had a snowball's chance in hell.



    I too think the p/e would decline [and be compressed even more].



    One thing that I always wonder... How is price set? Apple and Amazon are good examples of how wonky prices seem to be.



    If 70% of Apple stock is held by institutions and 67.50% of Amazon stock is held by institutions then who or how is the price set?
  • Reply 35 of 64
    Quote:
    Originally Posted by digitalclips View Post


    And the stock market will do what regarding AAPL I wonder ...?



    The market will do what it always does... Fluctuate.
  • Reply 36 of 64
    godzillagodzilla Posts: 156member
    Quote:
    Originally Posted by island hermit View Post


    Apple could sell 40 million iPhones, 6 million Macs but announce that they sold only 12 million iPads and it would tank the stock.



    LOL. Sad but (hopefully not) true.



    Quote:
    Originally Posted by Constable Odo View Post


    It's a shame that record earnings doesn't help boost Apple share price to any degree. The bulls will again be disappointed when hardly any investors purchase Apple stock around earnings. Analysts continue to boost target prices but the share price barely moves. At least Apple shares today aren't down as much as most tech stocks, so I guess I should consider myself lucky that Apple shares have stayed over $400 for a week or so which is somewhat satisfactory. The last few times Apple hit over $400, it dropped like a stone after a couple of days. $450 a share seems very far off and $500 is nearly impossible. Despite what the Apple bulls say, I'll take my $450 and be grateful for that much.



    Firstly, AAPL was well on its way to $450+ had the Market reacted rationally after its Earnings Call. This was manipulation and fearfully nonsensical Investor knee-jerk reactions at its best. Apple beat their own guidance, and had the most tangible excuse ever, why? Because the reason that their iPhones came in "less than desired" was because of that NEW PHONE BREAKING RECORDS AND PUTTING PEOPLE IN A FRENZY EXACTLY DURING SAID EARNINGS CALL. This to any logical or remotely intelligent Investor means BUY.



    Second, even after the knee-jerk misguided sell-off, the Stock was ready to soar above $410 levels again. Then, after some unsubstantiated "rumors" from no sources whatsoever revealed that "Somebody sneezed in the direction of the iPad, so everybody get reaaaallly scared now", the Stock plummeted down a massive $50 in just a couple of weeks or less, only to bounce back up.



    As far as I see it, the iPad has been practically priced out of the Stock by now. How many times does AAPL have to jump down $50 before people realize that the iPad is barely even considered in the Stocks valuation or P/E Ratio?



    Reading these Message Boards is a GREAT INSIGHT as to why AAPL is valued like it is. It seems to attract the most fearful and jittery Investors on the Market! This is a company that can shut its doors for a decade and reappear still richer than most everyone else on the NASDAQ! A Company who has a lot to look forward to in 2012 in terms of new Products, not counting any hopefully all-new surprises, etc. etc.



    I wish we had AMZN's Investors here! Those guys are nuts!
  • Reply 37 of 64
    cmvsmcmvsm Posts: 204member
    Quote:
    Originally Posted by constable odo View Post


    it's a shame that record earnings doesn't help boost apple share price to any degree. The bulls will again be disappointed when hardly any investors purchase apple stock around earnings. Analysts continue to boost target prices but the share price barely moves. At least apple shares today aren't down as much as most tech stocks, so i guess i should consider myself lucky that apple shares have stayed over $400 for a week or so which is somewhat satisfactory. The last few times apple hit over $400, it dropped like a stone after a couple of days. $450 a share seems very far off and $500 is nearly impossible. Despite what the apple bulls say, i'll take my $450 and be grateful for that much. :d



    ^^^this^^^
  • Reply 38 of 64
    saareksaarek Posts: 1,371member
    Quote:
    Originally Posted by stelligent View Post


    History does not support that observation, although I understand it's gratifying to be cynical.







    How does that make you look intelligent or enlightened?



    Well let's see shall we, for example the September quarter Apple dropped 5.6% after the earning were revealed. (Source: http://www.macobserver.com/tmo/artic...g_q4_earnings/)



    It also dropped in June following the results.



    I could go on, however my point was accurate and history backs me up.
  • Reply 39 of 64
    Quote:
    Originally Posted by saarek View Post


    Well let's see shall we, for example the September quarter Apple dropped 5.6% after the earning were revealed. (Source: http://www.macobserver.com/tmo/artic...g_q4_earnings/)



    It also dropped in June following the results.



    I could go on, however my point was accurate and history backs me up.



    Please don't go on.



    Last quarter's selloff was a function of missing the street's consensus. I was surprised that the drop wasn't larger. In other quarters when they've reported substantially above the street, the stock has jumped up, such as in 3Q 2010:



    http://www.foxbusiness.com/technolog...-expectations/



    Quote:

    Shares of Apple rallied nearly 1% higher ahead of Tuesdays close, to finish the session up $3.05 at $376.85 a share, a new record close in regular trading. The stock was up $27.80 per share, more than 7%, in after-hours trading.



  • Reply 40 of 64
    The problem is these idiot sleazbag "Analysts". They keep "bumping up" iPhone estimates. From 25M, to 28M, to 31M, now I just heard some say they expect "35M". These greasy manipulators just play games with the Stock, as they know that it paralyses the Stock when Earnings gets announced. I.e, AAPL would have to report 40M iPhones to actually "blowout", which is ludicrous.



    Every time you hear a "bump up in estimates", it might be priced into the Stock like .50c on a trading day, i.e insignificant. However, it's already psychologically embedded in the Investors heads, so they now have the belief that this is already all priced into the Stock, running into Earnings. Sleazy manipulation at its best.



    One can only wish that our Government would put more regulation on Wall Street and its shady characters, but said characters pay our Politicians bills.
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