Apple absolutely has a problem. That is, Tim Cook is a finance guy.
Yes, Tim is a finance guy, but he's also an Operations guy. VERY important to clarify that.
Quote:
Originally Posted by Flaneur
Apple has always been about tectonic shifts in information technology for the benefit of their users. No other company works this way. They follow Apple and copy and decorate on what Apple has done. This explains their unique secrecy that bothers you so much. It also explains how Apple could drop in valuation in a world-record amount.
Bingo! So yes, it's a double-edged sword.
My crystal ball says that the "long" edge is sharper...1000+.
I personally am not a fan of Tim Cook and think he is delusional if he thinks he can run the company the same way Steve did.
For a stupid person you sure post dumb stuff. Tim was in fact asked by Steve to not run the company he did, he was even told to not ask himself 'what would Steve do?'.
Since you're the one that brought up your 'model' for AAPL, plus claimed that you were a buy-side analyst, and appear to have a fairly strongly-held view on Apple's value, tell us:
1) What is your earnings estimate for 2013-14?
2) How are you estimating Apple's growth in earnings? For how many periods? What CAGR? Even focusing on just the existing business (and no new product lines), what are you building in, in terms of: (i) Overall market growth in PCs, smartphones, and tablets? (ii) Apple's share in each of these markets? (iii) Apple's average unit price in each of these markets?
3) Are you factoring in the likely growth in China (if China Mobile happens), as well as the wide open India market in the above?
4) What assumptions are you making about gross, operating, and profit margins? Do they stay the same? Fade over time?
5) What cost of equity (discount rate) are you using?
6) How are you calculating your terminal value -- by using a multiple, or the constant growth model (or its variant)? If the former, what is the implied cost of equity and 'g' in your multiple? If the latter, what are you assuming about long-run cost of equity and 'g'?
7) How model-consistent is your assumption of 'g' (explicit or implied) with the ROE and the reinvestment rate implied by your model?
There are just the main initial questions.
Depending on your answers, I will likely have more questions for you.
I see you are throwing out academic terms that don't get used often in the real world, but I can revert back to mba/cfa days and adjust my model to answer these. Give me a day. Let me know if you have a bloomberg terminal, in addition to the model can build in some neat auto-updating charts to help track relative performance and would be more than willing to somehow share the entire thing.
Tim was in fact asked by Steve to not run the company he did, he was even told to not ask himself 'what would Steve do?'.
I was being specific with how he relates / communicates with Wall Street. That hasn't changed much, but Tim doesn't get the benefit of the doubt, like Steve did.
Sorry about my attack; that was uncalled for.
Steve got the benefit of the doubt? You mean like his RDF, and all that? Would that be an indicator for WS to rate the stock higher with Steve over Tim? I thought WS was giving the stock a value based on the outlook analysts make.
I just meant very few sellside equity pieces discuss terminal value, constant growth model. That's classic b-school stuff but you don't see it much in equity analysis, but rather just a 3-4 yr forecast and multiple approach. I'm primarily a credit guy, but also do equities, cap structure arb, vol trading, etc. I focus on cash flow much more than the income statement approach equity analysts take. I would note cash flow margin (FFO/revenue) hasn't taken the hit gross margin has recently due to scale on the top line - meaning r&d and sg&a as % sales has decreased), but that offset will stall out without revenue growth.
Oddly enough, many are right here in these forums, citing the same analysts when their projections favor Apple.
In AI-space, the worthiness of an analyst is in direct proportion to the number of rosy things he says about Apple.
What's your goal here?
I'm a bit tired about lawsuits/analysts. I only care about products, and that's why I keep coming here, I'm curious, but most times I take "vacation" from sites like these, because they focus more and more on what I don't like.
Judged by your swagger and your second-rate jargon, yep, you're (were) an analyst, alright.
A completely clueless one at that (although, that is perhaps a bit of redundancy).
Clearly recent history has shown anyone that attempts to target AAPL is doomed to fail. This stock was suppose to be on the way to 1000.00 a share, right now we are closer to 100.00.
This is an Apple enthusiast forum which means 98% of the posts here are based on emotion rather than logic, again a perfect setup for failure. Diversification not masturbation over one company is the way to a winning portfolio. I know many joke about "Apple is Doomed" but in some way that is turning out to be true. For many decades Apple was the underdog that has not been the case now for several years, so they will not catch a break on any level.
Everyone right now is waiting for the "next big thing" from Apple and the reality is there is a limit to the next big thing. When looking back at history which is what every investor should do, nearly every tech company has hit the same brick wall. Only history will tell if Apple has hit it's peak, the market is at an all time high and clearly it does not feel that way for anyone that only holds AAPL.
Do you understand finance? Shareholders don't get a piece of the revenue, they get a piece of the net income.
You have an MBA yet you think shareholders get a piece of the net income? You might want to ask for your money back from whatever college you attended because shares rise and fall based on a large variety of factors and not some direct, 1:1 relationship between increased profits otherwise Apple's share price would be much higher and Amazon's much lower.
Maybe Apple's revenue is growing faster, but because they are selling more lower margin products, the bottom line doesn't grow on a higher revenue. Really simple stuff.
It is simple stuff and you continually ignore that Apple's profits have increased YoY, that their profits are projected to increase for fiscal 2013, and they far exceeding Samsung in both profits and profit margins which are now claiming is some gold standard despite ignoring it previously.
Samsung made US$15.5 billion in net income last year and are forecasted to make US$29.3 billion this year. Their net income growth of nearly 100% is higher because their margins are expected to be higher as they take a larger share of the high-end, high-margin smartphone business.
And many will buy into those estimates in the hope they are true or at least with the hope that enough lemmings will buy into it so they can make bank. That doesn't make it true and someone who claims to have an MBA should understand a basic concept of how markets can be manipulated without any actually living to their fabricated projections.
I'm sorry to inform you the market could care less about the past and while I could give you my own detailed Apple numbers, I don't want to spend the time building a Samsung model.
Your original comment had nothing to do with the stock price based on projections but instead claimed as fact thing you are merely wanting to come true, but don't take my word for it, let's examine what you wrote…
"While everyone around them is getting better, Apple is getting worse. That is going to be the theme until they change it and unfortunately, a 5S won't change so we'll have most of the year where the mainstream view is that Apple is in decline because they whiffed on product cycles and further can't execute. Frankly, its hard to argue that isn't the case."
You're claiming that Apple is getting worse as a company. Now we might have been able to conclude that you were talking only about the stock price (which still wouldn't be accurate) but your next sentence followed up with a comment about about unreleased hardware and the pronoun "they" in regard to Apple needing to change how they conduct business.
You then restate your initial comment about the company getting worse — not the stock — by claiming they have had unsuccessful attempts on launching products, as well as being able to execute the products they do have, which you conclude as being proof that Apple is pathetic, piece of shit of a company that do nothing but falter in the wake of Steve Job's death despite breaking record after record. That about sum it up?
PS: This is the same ol' shit that has been spewing since before Steve Jobs came to Apple and while Steve Jobs was at all, yet they keep winning and everyone wishing for their death keeps failing. Keep it up, you may live long enough to eventually be right.
Anthropology can be studied anywhere there is at least one human being. I have no idea what MacRulez original comment means but I'm certainly up for an anthropological discussion.
This stock was suppose to be on the way to 1000.00 a share, right now we are closer to 100.00.
They do that. The only thing you can count on is that being a technology company and having excessive mind share will result in bigger swings regardless of how well you are performing, or how wildly more successful you are than your next closest competitor.
Everyone right now is waiting for the "next big thing" from Apple and the reality is there is a limit to the next big thing. When looking back at history which is what every investor should do, nearly every tech company has hit the same brick wall. Only history will tell if Apple has hit it's peak, the market is at an all time high and clearly it does not feel that way for anyone that only holds AAPL.
It's an irrational set of expectations people have from Apple and no other company. Regardless of how successful they are they just keep asking "What else?" The Mac in 1984 and then the iPod in 2001. Then 6 years later for the iPhone, and 3 years later for the iPad, and yet people wanted something else right after the iPad was launched.
There was none of this attitude during the iPod's reign and it clearly had a much smaller window as only being a PMP. So why this irrational expectation for Apple to produce a brand new, revolutionary product category seemingly every month or else feel the wrath of analysts and their attached dingleberrists about the incontrovertible and presently occurring death of Apple?
I blame their excessive mindshare which makes any news about Apple better than substantial news about other companies, and negative news about Apple's demise even better for eyeballs.
They're not getting worse, but I'd dare say they've been moving slow and competitors are catching up quickly. I hope they're spending some of that cash hoard on a blockbuster iOS 7. Apple has plenty of money and market share no matter what they do, but as an investor I hope they do something big this year.
Nope. They spent miserable percentage on R&D. Apple was always greedy, this is Jobs legacy. There is nothing up the sleeve. THis talks about supply chain is side show, actually.
Problem is, that they should take out from the sleeve larger screen a year ago, they will take it 2014, when nobody will care any more. They have no iTV, especially not with bad SIri interface, iWatch is a funny little thing that means nothing and there is no next big thing. Believe me. If Apple stays at 5 P/E, it will be a big success.
Comments
Quote:
Originally Posted by waldobushman
Apple absolutely has a problem. That is, Tim Cook is a finance guy.
Yes, Tim is a finance guy, but he's also an Operations guy. VERY important to clarify that.
Quote:
Originally Posted by Flaneur
Apple has always been about tectonic shifts in information technology for the benefit of their users. No other company works this way. They follow Apple and copy and decorate on what Apple has done. This explains their unique secrecy that bothers you so much. It also explains how Apple could drop in valuation in a world-record amount.
Bingo! So yes, it's a double-edged sword.
My crystal ball says that the "long" edge is sharper...1000+.
Quote:
Originally Posted by PhilBoogie
Quote:
Originally Posted by jdnc123
I personally am not a fan of Tim Cook and think he is delusional if he thinks he can run the company the same way Steve did.
For a stupid person you sure post dumb stuff. Tim was in fact asked by Steve to not run the company he did, he was even told to not ask himself 'what would Steve do?'.
Personal attack anyone?
Quote:
Originally Posted by jdnc123
Quote:
Originally Posted by anantksundaram
Fair enough.
Since you're the one that brought up your 'model' for AAPL, plus claimed that you were a buy-side analyst, and appear to have a fairly strongly-held view on Apple's value, tell us:
1) What is your earnings estimate for 2013-14?
2) How are you estimating Apple's growth in earnings? For how many periods? What CAGR? Even focusing on just the existing business (and no new product lines), what are you building in, in terms of: (i) Overall market growth in PCs, smartphones, and tablets? (ii) Apple's share in each of these markets? (iii) Apple's average unit price in each of these markets?
3) Are you factoring in the likely growth in China (if China Mobile happens), as well as the wide open India market in the above?
4) What assumptions are you making about gross, operating, and profit margins? Do they stay the same? Fade over time?
5) What cost of equity (discount rate) are you using?
6) How are you calculating your terminal value -- by using a multiple, or the constant growth model (or its variant)? If the former, what is the implied cost of equity and 'g' in your multiple? If the latter, what are you assuming about long-run cost of equity and 'g'?
7) How model-consistent is your assumption of 'g' (explicit or implied) with the ROE and the reinvestment rate implied by your model?
There are just the main initial questions.
Depending on your answers, I will likely have more questions for you.
I see you are throwing out academic terms that don't get used often in the real world, but I can revert back to mba/cfa days and adjust my model to answer these. Give me a day. Let me know if you have a bloomberg terminal, in addition to the model can build in some neat auto-updating charts to help track relative performance and would be more than willing to somehow share the entire thing.
Really.
Which of the terms above are 'academic'?
Sorry about my attack; that was uncalled for.
Steve got the benefit of the doubt? You mean like his RDF, and all that? Would that be an indicator for WS to rate the stock higher with Steve over Tim? I thought WS was giving the stock a value based on the outlook analysts make.
Wow, TS is on the roll on post deletions again.
deleted
THESE IDIOTS COULDN'T PREDICT THEIR WAY OUT OF A PAPER BAG.
Quote:
Originally Posted by anantksundaram
Really.
Which of the terms above are 'academic'?
I just meant very few sellside equity pieces discuss terminal value, constant growth model. That's classic b-school stuff but you don't see it much in equity analysis, but rather just a 3-4 yr forecast and multiple approach. I'm primarily a credit guy, but also do equities, cap structure arb, vol trading, etc. I focus on cash flow much more than the income statement approach equity analysts take. I would note cash flow margin (FFO/revenue) hasn't taken the hit gross margin has recently due to scale on the top line - meaning r&d and sg&a as % sales has decreased), but that offset will stall out without revenue growth.
Quote:
Originally Posted by MacRulez
Oddly enough, many are right here in these forums, citing the same analysts when their projections favor Apple.
In AI-space, the worthiness of an analyst is in direct proportion to the number of rosy things he says about Apple.
What's your goal here?
I'm a bit tired about lawsuits/analysts. I only care about products, and that's why I keep coming here, I'm curious, but most times I take "vacation" from sites like these, because they focus more and more on what I don't like.
What about you?
Just curious.
deleted
Quote:
Originally Posted by anantksundaram
Judged by your swagger and your second-rate jargon, yep, you're (were) an analyst, alright.
A completely clueless one at that (although, that is perhaps a bit of redundancy).
Clearly recent history has shown anyone that attempts to target AAPL is doomed to fail. This stock was suppose to be on the way to 1000.00 a share, right now we are closer to 100.00.
This is an Apple enthusiast forum which means 98% of the posts here are based on emotion rather than logic, again a perfect setup for failure. Diversification not masturbation over one company is the way to a winning portfolio. I know many joke about "Apple is Doomed" but in some way that is turning out to be true. For many decades Apple was the underdog that has not been the case now for several years, so they will not catch a break on any level.
Everyone right now is waiting for the "next big thing" from Apple and the reality is there is a limit to the next big thing. When looking back at history which is what every investor should do, nearly every tech company has hit the same brick wall. Only history will tell if Apple has hit it's peak, the market is at an all time high and clearly it does not feel that way for anyone that only holds AAPL.
Quote:
Originally Posted by MacRulez
Anthropology.
On AI?
You have an MBA yet you think shareholders get a piece of the net income? You might want to ask for your money back from whatever college you attended because shares rise and fall based on a large variety of factors and not some direct, 1:1 relationship between increased profits otherwise Apple's share price would be much higher and Amazon's much lower.
It is simple stuff and you continually ignore that Apple's profits have increased YoY, that their profits are projected to increase for fiscal 2013, and they far exceeding Samsung in both profits and profit margins which are now claiming is some gold standard despite ignoring it previously.
And many will buy into those estimates in the hope they are true or at least with the hope that enough lemmings will buy into it so they can make bank. That doesn't make it true and someone who claims to have an MBA should understand a basic concept of how markets can be manipulated without any actually living to their fabricated projections.
Your original comment had nothing to do with the stock price based on projections but instead claimed as fact thing you are merely wanting to come true, but don't take my word for it, let's examine what you wrote…
You're claiming that Apple is getting worse as a company. Now we might have been able to conclude that you were talking only about the stock price (which still wouldn't be accurate) but your next sentence followed up with a comment about about unreleased hardware and the pronoun "they" in regard to Apple needing to change how they conduct business.
You then restate your initial comment about the company getting worse — not the stock — by claiming they have had unsuccessful attempts on launching products, as well as being able to execute the products they do have, which you conclude as being proof that Apple is pathetic, piece of shit of a company that do nothing but falter in the wake of Steve Job's death despite breaking record after record. That about sum it up?
PS: This is the same ol' shit that has been spewing since before Steve Jobs came to Apple and while Steve Jobs was at all, yet they keep winning and everyone wishing for their death keeps failing. Keep it up, you may live long enough to eventually be right.
Anthropology can be studied anywhere there is at least one human being. I have no idea what MacRulez original comment means but I'm certainly up for an anthropological discussion.
They do that. The only thing you can count on is that being a technology company and having excessive mind share will result in bigger swings regardless of how well you are performing, or how wildly more successful you are than your next closest competitor.
It's an irrational set of expectations people have from Apple and no other company. Regardless of how successful they are they just keep asking "What else?" The Mac in 1984 and then the iPod in 2001. Then 6 years later for the iPhone, and 3 years later for the iPad, and yet people wanted something else right after the iPad was launched.
There was none of this attitude during the iPod's reign and it clearly had a much smaller window as only being a PMP. So why this irrational expectation for Apple to produce a brand new, revolutionary product category seemingly every month or else feel the wrath of analysts and their attached dingleberrists about the incontrovertible and presently occurring death of Apple?
I blame their excessive mindshare which makes any news about Apple better than substantial news about other companies, and negative news about Apple's demise even better for eyeballs.
deleted
Quote:
Originally Posted by techguy911
They're not getting worse, but I'd dare say they've been moving slow and competitors are catching up quickly. I hope they're spending some of that cash hoard on a blockbuster iOS 7. Apple has plenty of money and market share no matter what they do, but as an investor I hope they do something big this year.
Nope. They spent miserable percentage on R&D. Apple was always greedy, this is Jobs legacy. There is nothing up the sleeve. THis talks about supply chain is side show, actually.
Problem is, that they should take out from the sleeve larger screen a year ago, they will take it 2014, when nobody will care any more. They have no iTV, especially not with bad SIri interface, iWatch is a funny little thing that means nothing and there is no next big thing. Believe me. If Apple stays at 5 P/E, it will be a big success.
Quote:
Originally Posted by MacRulez
Oddly enough, many are right here in these forums, citing the same analysts when their projections favor Apple.
In AI-space, the worthiness of an analyst is in direct proportion to the number of rosy things he says about Apple.
I hate blatant stock manipilation be it this way or that way.
But true enogh positive manipulation does in fact enrage me a bit less.
I think the weather is going to be horrible tomorrow. I see trolls flying very low recently.