Apple's gross margins likely to decline this fall with new product designs, but quick rebound expect



  • Reply 21 of 30
    calicali Posts: 3,495member
    Smells like a BULL took a dump in here: BS.
  • Reply 22 of 30
    bugsnwbugsnw Posts: 717member

    Wait, so margins take a dip when new products are released with features that require Apple to rejigger manufacturing and then increase as millions of said new product are manufactured throughout the year while input costs decline?


    Sounds like black magic.

  • Reply 23 of 30
    Umm... value is what you can sell a stock for in the stock market. PED and his followers are trying to be too clever by half here. If Apple's high pre-split was $700, then the post-split high is $100. That's really all there is to it.

    The rest -- how EPS is measured, how the PE is calculated, what the PEG is, whether shares were repurchased or not -- is irrelevant except for fancy-sounding market commentary that (consciously or not) pulls the wool over investors' eyes.

    If PED's article is about all of the issues you're raising, he needs to, at a minimum, change his headline (to something like, "Apple's EPS is being calculated incorrectly"). It's borderline irresponsible to readers in its current form.
    Maybe the title is a bit misleading, although it was clear to me that he was speaking about equivalency.

    But the rest is far from "irrelevant" if you are an investor in AAPL. OTOH, you can't make someone hear who doesn't have ears, so have a nice day.
  • Reply 24 of 30
    I am afraid you're making rather strong statements here. The P/E ratio is simply a consequence of the observed stock price and the measured EPS (which, I agree, can be calculated incorrectly). It's current level can influence the stock price over some time horizon (which no one can predict) if we have a good idea of what risk-equivalent PE ratios are and we think markets are not reflecting prices efficiently.

    As to the 'PEG ratio' (I low they're thrown around a lot by folks on the Street), can you please explain what exactly it means (where does the 'growth' in the PEG ratio come from?), and more importantly, a single peer-reviewed academic study that shows a link between PEG ratios and stock prices?
    Regarding P/E, it's usefulness is as a tool to understand relative valuations, nothing more. Are you saying that knowing relative valuations is unimportant in buying and selling stock?

    Regarding PEG,!t's a similar tool though used for examining relative earnings growth. As for the rest, that's what the internet is for. I'm not here to educate you, only to suggest that there's something going on that people interested in AAPL should know about.
  • Reply 25 of 30
    radarthekatradarthekat Posts: 3,095moderator
    sacto joe wrote: »
    Radar, as I said just now to another poster, you get full credit for pointing out the difference in matching the all time high stock price. But I guarantee you that PED posted that article, which is based on another article by Greg Morton, because I pointed out the article by Mr. Morton yesterday in the comment section of his earlier article.

    Also, irregardless of who pointed out what when, the most important issue to remember is that EPS is being calculated wrong. That word needs to get out, because that bad number is hitting the P/E ratio and the PEG, both of which strongly influence the price of a stock.

    Yeah, my bad. We're referring to two different PED articles. The one I'm referring to was from June 6th and only speaks to the new high water mark for the company's overall valuation, ie, my observation that $110 is the new $705. Your point about how EPS is being measured is related, but a separate and new point that also needs to be understood by more people. Great job surfacing this.
  • Reply 26 of 30

    Originally Posted by sog35 View Post


    2. Said the IBM deal is no big deal


    Let's meet back here in a year and see. My bet is that, while it obviously won't HURT Apple and is overall a good thing, the IBM partnership will turn out to be kinda of a "no big deal" affair.


    Originally Posted by sog35 View Post


    With the release of the new iPhones last year the Margins went up!!! 


    Yes, because last year was an "S" year. Apple only has to retool iPhone manufacturing once every TWO years because on odd-numbered years they carry over pretty much everything except the PCB. Look at 2012 and 2010 and see if there's a dip. I don't know if there is or isn't, I'm just saying that's where you'd expect to see one. You'll also note that What'shisname's comparison was to 2012, not last year.

  • Reply 27 of 30

    Originally Posted by sog35 View Post


    So your taking Munsters word against Tim Cook regarding the IBM deal?  Tim Cook said it was a HUGE DEAL.


    I'm not taking Munster's word, I'm going with my own evaluation of the situation, but yeah, I'm saying I don't think it will be as big a deal as the hype is making it out to be. Even Tim SAYING it's huge doesn't necessarily mean that it really IS. What else could he say? That the deal will result in marginal incremental increases in iPad sales? He may have just been cheerleading. Or he may really believe it WILL be huge. I have my doubts. Here's hoping I'm wrong.


    Originally Posted by sog35 View Post


    Apple did have to re-tool last year for the 5C.


    Oh yeah... I forgot about that. Never mind! <img class=" src="" /> 

  • Reply 28 of 30
    I don't understand the base points calculations. Where do those come from? Base of what?
    "Basis points" are hundredths of a percent. So "200 basis points" is another way of saying 2%.
  • Reply 29 of 30

    The pied piper at piper jaffray is not infallible = pun intended in deed.

    Minute short time fluctuations in the numbers are not for the serious investor.

    AAPL's margins are quite awesome.

    His P/T is a joke as his low number will soon become obsolete. Do we know his time frame?


    My P/T is crystal clear, ever since back in April ====== $150 before the end next year.


    Disclosure = published my first switch reco of 2014 in April:

    Sell AMZN, then $338 = Buy AAPL $70 (split adjusted).

    So far, that worked like a charm. (Past performance etc.).

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