I don't understand how so many people can think that the AAPL decline isn't expected and/or that the stock isn't still overvalued.
If you were to try and think of one company that might have its stock price inflated by company "fans" and/or amateur investors looking for the "next big company", I think 99.9% of people would think of AAPL.
Honestly, did you all think that apple was worth more than every non-state oil company in the world? I'm no investor myself, but that always seemed ridiculous to me - those are companies who have no real competitors, whose product is guaranteed to rise in value in the future, and whose product will never be replaced by a "better" product in our lifetimes.
Also, as soon as Apple became "the biggest company in the world", you also had to expect that a bunch more idiots would gobble up stock because it was a "sure investment" because bigger is somehow better. I highly doubt any experienced/smart investors bought Apple when it starting passing Shell Oil and Exxon; it just doesn't make any sense.
I look at Microsoft's value when it was at it's absolute peak of dominance (and overinflated stock prices), installed on something like 90% of computers in the world in 1999, when personal computers were still a huge growth market and then see Apple pass those levels with, what 25% of smartphone sales, 50% of tablet sales and maybe 5% of global PC sales, and really there's no way I can see the Apple market cap being anywhere near realistic, even though Apple's profit margins are much higher than Microsofts have ever been. In '99, Microsoft was profiting on almost every computer sold (with no real competitors) at a time when global market penetration of computers was still growing exponentially. Compare that to Apple nowadays, with a thin sliver of PC sales in an industry that is stagnating, a non-dominant share of smart-phones, which is a segment with slowing sales the past 2 years, and a major share in Tablets, which is really an unknown in terms of future value. Nothing suggests Apple should be worth more than Exxon to me.
Honestly, did you all think that apple was worth more than every non-state oil company in the world? I'm no investor myself, but that always seemed ridiculous to me - those are companies who have no real competitors, whose product is guaranteed to rise in value in the future, and whose product will never be replaced by a "better" product in our lifetimes.
To be fair, they have actually made more profit than every oil company (and every other company) in the world in some quarters so I do think their current valuation is reasonable - but $700 was a bit much. Exxon Mobil's profits are here:
Net profit seems to be around $9.5b per quarter. Apple made $13b last quarter. You're right that there are fewer oil competitors but Apple has an exclusivity over iOS and the App Store.
It seems that Exxon Mobil has currently overtaken Apple's market cap due to the recent drop.
Apple's net profit for 2012 was $36b, Exxon's was $45b.
If you assume Exxon's market cap is accurate and that Apple's profits don't grow significantly like Q1, that would mean Apple's market cap should be at 80%. Exxon's current market cap is $389b so Apple's should be $311b, which divided by the shares, gives a $331 share price.
The profit didn't grow last quarter but they missed some profit on the iMacs so there probably would have been some growth. I originally thought a $450-500 price would have been accurate but it seems like $300-350 would be closer if they don't grow the profits significantly. The iPad market still has a lot of potential but we'll see next week.
To be fair, they have actually made more profit than every oil company (and every other company) in the world in some quarters so I do think their current valuation is reasonable - but $700 was a bit much. Exxon Mobil's profits are here:
Net profit seems to be around $9.5b per quarter. Apple made $13b last quarter. You're right that there are fewer oil competitors but Apple has an exclusivity over iOS and the App Store.
It seems that Exxon Mobil has currently overtaken Apple's market cap due to the recent drop.
Apple's net profit for 2012 was $36b, Exxon's was $45b.
If you assume Exxon's market cap is accurate and that Apple's profits don't grow significantly like Q1, that would mean Apple's market cap should be at 80%. Exxon's current market cap is $389b so Apple's should be $311b, which divided by the shares, gives a $331 share price.
The profit didn't grow last quarter but they missed some profit on the iMacs so there probably would have been some growth. I originally thought a $450-500 price would have been accurate but it seems like $300-350 would be closer if they don't grow the profits significantly. The iPad market still has a lot of potential but we'll see next week.
XOM has very little (relatively) cash on the books (less than $10BN), so if you adjust for the difference, Apple should be about $450BN market cap (everything else being equal, as you suggest), so closer to $500 share price. I am guessing that the reasons that Apple is discounted are
1. Having a huge cash overhang is viewed as a bad thing (notice that XOM has enormous exploration and R&D costs, and yet it manages with a mere $10BN), and a sign of mismanagement.
2. XOM's revenue stream is not viewed as threatened (not because they are any kind of monopoly, but because the management is trusted to be on top of the current supply shifts), whereas Apple's is. This should, in principle, be balanced by higher upside (no one believes that XOM sales would jump 30% YOY, unless there is a huge supply shortage, in which case their costs would increase also) of Apple, but again, Apple's management has somehow managed to lose investor confidence.
Google was $814 on 4/2/13. If it was such a huge beat the stock would have blew past $814. The average daily price of GOOG for the past 2 weeks is about 790. So the stock is up 1% after earnings, big deal. Investors ARE discounting earnings that are result of a tax rate.
Read your own quoted message:
No it isn't. Wall street will discount it as seen by the stock price today. (bold face mine).
Does it talk about GOOG price on 4/2/13? Plus, the stock is up 5% after earnings. If you can't admit that you were wrong, then I don't see any reason to continue this conversation.
Look at the last 2 weeks. The price has not gone up from that level since earnings was released yesterday. Yes, its up 5% today, but it was down more than 5% from the beginning of the month.
On April 1st Google was over $800. The the earnings beat was so great it would have blown past all time highs. No one in wall st cares about temporary earnings because of some tax provision.
Google stock is up over 4%, while Apple has erased any early day gains and is flat to down right now. Google's like Amazon right now. They could announce anything right now and the stock would jump. If Apple beats low expectations the stock will do nothing and if they don't, if its a 'meh' quarter, it'll probably drop $30 after hours. I'm actually waiting for it to drop so low it becomes an embarrassment for Wall Street not Apple.
Google stock is up over 4%, while Apple has erased any early day gains and is flat to down right now. Google's like Amazon right now. They could announce anything right now and the stock would jump. If Apple beats low expectations the stock will do nothing and if they don't, if its a 'meh' quarter, it'll probably drop $30 after hours. I'm actually waiting for it to drop so low it becomes an embarrassment for Wall Street not Apple.
That's a rather misguided way of thinking of it. Google and Amazon are both growing strongly, and people also know what to expect. Apple's management are apparently under the impression that they are running the NSA, so there is a complete information vacuum. Jobs could get away with this because (a) he was a known quantity and (b) he had personal relationships with the relevant people, so he could divulge teasers about insanely great products to come privately. The current management cannot -- their mismanagement of both the cash position and the stock price is unspeakably awful at this point.
Compare Amazon/Google's Revenue and Earning growth Year over year to apple. Then relook at what you said.
Why don't you reread what I said -- most of it has nothing to do with revenue growth (though it is clear that AMZN and GOOG stock would not be doing so well without the growth).
Why don't you reread what I said -- most of it has nothing to do with revenue growth (though it is clear that AMZN and GOOG stock would not be doing so well without the growth).
You said they are both growing "strongly". Are you suggesting Wall Street doesn't care what their revenue or profit growth is? In the case of Amazon it's clear they don't care since Apple has turned more profit in one quarter than Amazon has in their entire existence. Considering Amazon is basically a monopoly I guess Wall Street doesn't need to care whether they turn a profit or not. And they can keep believing that some day in the future it will happen.
If you don't understand why Apple is down, then you shouldn't be in the stock market.
Valuations matter, growth matters, dividends matter, etc... Last quarter's profits - don't matter. Stock markets look ahead, not behind.
And stock price is a reflection of value, not performance. Stocks, by their very nature, can't go up forever. A company has a dollar value, and it can never be infinite...
It's clear that most on this forum don't understand...
You said they are both growing "strongly". Are you suggesting Wall Street doesn't care what their revenue or profit growth is? In the case of Amazon it's clear they don't care since Apple has turned more profit in one quarter than Amazon has in their entire existence. Considering Amazon is basically a monopoly I guess Wall Street doesn't need to care whether they turn a profit or not. And they can keep believing that some day in the future it will happen.
Amazon is not a monopoly, it is an also-ran in the retail business to Walmart and Target. Which is good for the stock price, because it means that there is a lot of upside, potentially. It is the dominant player in online sales, but as the prolonged tax holiday ends, this is less relevant. As for the profit, Wall street would care if Apple distributed a significant amount of profit to its shareholders, but it is not doing it, which means that there is a good chance that the money will never make it out of the mattress. These are all legitimate fears. If you don't share them, by all means, load up on Apple (I am not being sarcastic, if enough people think this and vote with their wallet, the stock price will go up).
Comments
Quote:
Originally Posted by Superbass
I don't understand how so many people can think that the AAPL decline isn't expected and/or that the stock isn't still overvalued.
If you were to try and think of one company that might have its stock price inflated by company "fans" and/or amateur investors looking for the "next big company", I think 99.9% of people would think of AAPL.
Honestly, did you all think that apple was worth more than every non-state oil company in the world? I'm no investor myself, but that always seemed ridiculous to me - those are companies who have no real competitors, whose product is guaranteed to rise in value in the future, and whose product will never be replaced by a "better" product in our lifetimes.
Also, as soon as Apple became "the biggest company in the world", you also had to expect that a bunch more idiots would gobble up stock because it was a "sure investment" because bigger is somehow better. I highly doubt any experienced/smart investors bought Apple when it starting passing Shell Oil and Exxon; it just doesn't make any sense.
I look at Microsoft's value when it was at it's absolute peak of dominance (and overinflated stock prices), installed on something like 90% of computers in the world in 1999, when personal computers were still a huge growth market and then see Apple pass those levels with, what 25% of smartphone sales, 50% of tablet sales and maybe 5% of global PC sales, and really there's no way I can see the Apple market cap being anywhere near realistic, even though Apple's profit margins are much higher than Microsofts have ever been. In '99, Microsoft was profiting on almost every computer sold (with no real competitors) at a time when global market penetration of computers was still growing exponentially. Compare that to Apple nowadays, with a thin sliver of PC sales in an industry that is stagnating, a non-dominant share of smart-phones, which is a segment with slowing sales the past 2 years, and a major share in Tablets, which is really an unknown in terms of future value. Nothing suggests Apple should be worth more than Exxon to me.
Do you understand any of the numbers here?:
http://ycharts.com/companies/AAPL/valuation
Quote:
Originally Posted by paladyr
Do you understand any of the numbers here?:
http://ycharts.com/companies/AAPL/valuation
It would be great to see Microsoft's numbers (and Dells) during the 90s. That would be a much better comparison.
Quote:
Originally Posted by Rogifan
Stock is up over 2% today.
... but we have to see if there is a psychological barrier at $400. Any gain today might mean nothing if it doesn't break $400 and stay above $400.
Quote:
Originally Posted by island hermit
... but we have to see if there is a psychological barrier at $400. Any gain today might mean nothing if it doesn't break $400 and stay above $400.
He is talking about GOOG stock. I think we can be quite confident that it will stay above $400
Quote:
Originally Posted by igriv
He is talking about GOOG stock. I think we can be quite confident that it will stay above $400
LOL. My mistake... AAPL was up at 2% right at that time.
Quote:
Originally Posted by sog35
Its flat since Monday. It drop about 2% yesterday before earnings and then went up 2% today. No one is giving Google credit for the lower tax rate.
You said:
No it isn't. Wall street will discount it as seen by the stock price today.
Today (at noon) the stock is up almost 3%, so just admit you are wrong (you can wait until 4pm if you like).
Quote:
Originally Posted by island hermit
It would be great to see Microsoft's numbers (and Dells) during the 90s. That would be a much better comparison.
Microsoft had a p/e ratio of 72 in 1999 during the bubble - to get more detail you need to pay ycharts for the data.
http://ycharts.com/companies/MSFT/pe_ratio
To be fair, they have actually made more profit than every oil company (and every other company) in the world in some quarters so I do think their current valuation is reasonable - but $700 was a bit much. Exxon Mobil's profits are here:
http://finance.yahoo.com/q/is?s=XOM
Net profit seems to be around $9.5b per quarter. Apple made $13b last quarter. You're right that there are fewer oil competitors but Apple has an exclusivity over iOS and the App Store.
It seems that Exxon Mobil has currently overtaken Apple's market cap due to the recent drop.
Apple's net profit for 2012 was $36b, Exxon's was $45b.
If you assume Exxon's market cap is accurate and that Apple's profits don't grow significantly like Q1, that would mean Apple's market cap should be at 80%. Exxon's current market cap is $389b so Apple's should be $311b, which divided by the shares, gives a $331 share price.
The profit didn't grow last quarter but they missed some profit on the iMacs so there probably would have been some growth. I originally thought a $450-500 price would have been accurate but it seems like $300-350 would be closer if they don't grow the profits significantly. The iPad market still has a lot of potential but we'll see next week.
Quote:
Originally Posted by Marvin
To be fair, they have actually made more profit than every oil company (and every other company) in the world in some quarters so I do think their current valuation is reasonable - but $700 was a bit much. Exxon Mobil's profits are here:
http://finance.yahoo.com/q/is?s=XOM
Net profit seems to be around $9.5b per quarter. Apple made $13b last quarter. You're right that there are fewer oil competitors but Apple has an exclusivity over iOS and the App Store.
It seems that Exxon Mobil has currently overtaken Apple's market cap due to the recent drop.
Apple's net profit for 2012 was $36b, Exxon's was $45b.
If you assume Exxon's market cap is accurate and that Apple's profits don't grow significantly like Q1, that would mean Apple's market cap should be at 80%. Exxon's current market cap is $389b so Apple's should be $311b, which divided by the shares, gives a $331 share price.
The profit didn't grow last quarter but they missed some profit on the iMacs so there probably would have been some growth. I originally thought a $450-500 price would have been accurate but it seems like $300-350 would be closer if they don't grow the profits significantly. The iPad market still has a lot of potential but we'll see next week.
XOM has very little (relatively) cash on the books (less than $10BN), so if you adjust for the difference, Apple should be about $450BN market cap (everything else being equal, as you suggest), so closer to $500 share price. I am guessing that the reasons that Apple is discounted are
1. Having a huge cash overhang is viewed as a bad thing (notice that XOM has enormous exploration and R&D costs, and yet it manages with a mere $10BN), and a sign of mismanagement.
2. XOM's revenue stream is not viewed as threatened (not because they are any kind of monopoly, but because the management is trusted to be on top of the current supply shifts), whereas Apple's is. This should, in principle, be balanced by higher upside (no one believes that XOM sales would jump 30% YOY, unless there is a huge supply shortage, in which case their costs would increase also) of Apple, but again, Apple's management has somehow managed to lose investor confidence.
Quote:
Originally Posted by sog35
Google was $814 on 4/2/13. If it was such a huge beat the stock would have blew past $814. The average daily price of GOOG for the past 2 weeks is about 790. So the stock is up 1% after earnings, big deal. Investors ARE discounting earnings that are result of a tax rate.
Read your own quoted message:
No it isn't. Wall street will discount it as seen by the stock price today. (bold face mine).
Does it talk about GOOG price on 4/2/13? Plus, the stock is up 5% after earnings. If you can't admit that you were wrong, then I don't see any reason to continue this conversation.
Quote:
Originally Posted by Rogifan
Google stock is up over 4%, while Apple has erased any early day gains and is flat to down right now. Google's like Amazon right now. They could announce anything right now and the stock would jump. If Apple beats low expectations the stock will do nothing and if they don't, if its a 'meh' quarter, it'll probably drop $30 after hours. I'm actually waiting for it to drop so low it becomes an embarrassment for Wall Street not Apple.
That's a rather misguided way of thinking of it. Google and Amazon are both growing strongly, and people also know what to expect. Apple's management are apparently under the impression that they are running the NSA, so there is a complete information vacuum. Jobs could get away with this because (a) he was a known quantity and (b) he had personal relationships with the relevant people, so he could divulge teasers about insanely great products to come privately. The current management cannot -- their mismanagement of both the cash position and the stock price is unspeakably awful at this point.
Quote:
Originally Posted by sog35
Compare Amazon/Google's Revenue and Earning growth Year over year to apple. Then relook at what you said.
Why don't you reread what I said -- most of it has nothing to do with revenue growth (though it is clear that AMZN and GOOG stock would not be doing so well without the growth).
Quote:
Originally Posted by igriv
The current management cannot -- their mismanagement of both the cash position and the stock price is unspeakably awful at this point.
Congratulations on the new meme, it's very becoming on you.
Originally Posted by igriv
…the stock price is unspeakably awful at this point.
Quote:
Originally Posted by Tallest Skil
Lol, Cook laughing as Rome burns. Nice post.
If you don't understand why Apple is down, then you shouldn't be in the stock market.
Valuations matter, growth matters, dividends matter, etc... Last quarter's profits - don't matter. Stock markets look ahead, not behind.
And stock price is a reflection of value, not performance. Stocks, by their very nature, can't go up forever. A company has a dollar value, and it can never be infinite...
It's clear that most on this forum don't understand...
Quote:
Originally Posted by Rogifan
You said they are both growing "strongly". Are you suggesting Wall Street doesn't care what their revenue or profit growth is? In the case of Amazon it's clear they don't care since Apple has turned more profit in one quarter than Amazon has in their entire existence. Considering Amazon is basically a monopoly I guess Wall Street doesn't need to care whether they turn a profit or not. And they can keep believing that some day in the future it will happen.
Amazon is not a monopoly, it is an also-ran in the retail business to Walmart and Target. Which is good for the stock price, because it means that there is a lot of upside, potentially. It is the dominant player in online sales, but as the prolonged tax holiday ends, this is less relevant. As for the profit, Wall street would care if Apple distributed a significant amount of profit to its shareholders, but it is not doing it, which means that there is a good chance that the money will never make it out of the mattress. These are all legitimate fears. If you don't share them, by all means, load up on Apple (I am not being sarcastic, if enough people think this and vote with their wallet, the stock price will go up).