Apple Inc. surprises with massive $17 billion Q4 stock buyback

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Comments

  • Reply 41 of 53
    pfisherpfisher Posts: 758member
    Quote:

    Originally Posted by kellya74u View Post

     

    Experts say to 'study success,' then emulate its formula. Using this model, maybe GT Technologies people should buy up as much stock as they can while it is low & then...well, then....then, they'd really have something! Especially so, if Apple took it over & ran it successfully for a huge profit & share gains.


     

    This stock buyback is apparently, based on what I've been reading, causing the S&P to go up as companies have been increasing the value of their stocks by buy-backs. It's a safe way for them to increase the values.

     

    So, seems the stock market may be fragile on this activity.

     

    People keep rocking on Apple's stock and saying its undervalued. Even if it is undervalued, it doesn't matter. The true value of any company's stock is what people are willing to pay for it at any given point in time.

     

    If the stock market crashed, Apple would go down as well as everyone else.

     

    It's crazy to think that people have so much money riding on one company. There is no reason why it can't go down.

     

    Apple can't grow like it has in the last few years. It's basically turning/is a value stock based on dividends and its reasonably mature.

     

    My feeling is that the iWatch won't sell all that well and iPads will no longer do all that well. Macbooks seem to be selling really well, but over the next year or two, we could see some real growth out of Chromebooks and cheaper Windows machines.

     

    Apple is probably at its apex. It will grow, but not all that much. 

     

    A big risk is the iPhone. Too big a part of profits. One failure on phones could really impact the stock.

     

    Just my opinion. Doesn't matter one way or another if you prefer to be diversified in low cost index funds (bonds/stocks).

  • Reply 42 of 53

    "If you could not understand the fact that P = EPS*(P/E), which in turn is what I was referring to, I really don't know what to say.... except 'Oh boy.'"

     

    All you did was define Price and then say 'Oh boy'. You did not actually refute what I said or explain how Apple's repurchase plan does not improve earning per share. What you originally did was parrot the oft cited refrain that share repurchase plans don't actually matter once you consider eps on a diluted basis. In the case of Apple, the ratio of shares repurchased to employee stock options issued is so significant that it is going to have a noticeable and very real and tangible effect on eps. Apples share repurchase plan may not cause the stock price to rise, but it will most certainly cause earning per share to grow.

     

    If you are still doubtful, tell me what the earnings per share  would be if the 45 billion dollar buyback had never happened, and compare it what the earnings per share is today. Present both numbers. If you cannot do this, I have zero idea why anybody would listen to you.

  • Reply 43 of 53
    dasanman69 wrote: »
    "Members of Congress, the NSA, the FBI and the New York Stock exchange all swarmed Apple's headquarters today demanding answers...and a free iPhone 6."

    C'mon who's going to believe that? If you're going to demand a free iPhone you're going to go for the 6+.

    Judging from the crookedness of those institutions, you're probably right.
  • Reply 44 of 53
    dasanman69 wrote: »
    C'mon who's going to believe that? If you're going to demand a free iPhone you're going to go for the 6+.

    LOL

    I must say that $203 mark is something I look forward to. My initial gamble in AAPL will be well into a 7 figure return, at about half way there.

    $150.2358?

    Impressive.
  • Reply 45 of 53
    They could have send a manned mission to Mars (and back) twice!

    Incredible.

    And I was almost happy today. Great.

    Be content with a manned mission to your local corner shop.
  • Reply 46 of 53
    MarvinMarvin Posts: 14,612moderator
    The first sentence says that the number of shares they buy back can be essentially anything. Even zero. Share repurchase programs are often canceled or reversed. In my view, Apple's management would not be stupid enough to buy shares that they think are overvalued by their own reckoning. In fact, they'd want to leave some margin for error in their valuation assessment.

    If they cancelled it or reversed it, that's a pretty firm statement to make to investors. They'd effectively be telling investors currently holding shares that there won't be any growth worth bothering about so you might as well sell if you're in it for growth.
    You're welcome to believe anything that anyone tells you about what Apple is worth, but just recognize that, at $150, Apple Forward P/E would be ~20x. At 200, 26x. At 400 52x. Those are pretty aggressive multiples for a company Apple's size, despite Apple's history of remarkable success.

    They are high numbers but Google's at 27x. Let's not forget that the market is priced by people, not by Apple's success. What Apple does only plays a part in the valuation. Lowered confidence in their competition helps drive the perception:

    http://finance.yahoo.com/news/suddenly-google-looks-shaky-174232846.html
    http://www.theverge.com/2014/10/6/6921255/samsung-q3-2014-earnings-guidance
    For instance, to achieve even a $150 price, under a reasonable range of assumptions for cash flows and cost of capital in my own intrinsic valuation of the stock (which I won't get into, because it'll simply lead to a lot of pointless back-and-forth), Apple will need to be generating close to $800B dollars in Revenue by 2024. Do you think that is possible/likely? How many of what products, at what ASP, would they need to sell in order to to get there? (To put that into perspective, consider that the consensus analyst estimate is for $210B in revenue during FY2015).

    I'd love to know your views.

    As was mentioned, if they keep the earnings up around $40b net profit per year, they can easily buy back that much in shares every year for the next few years. They could do $190b in buybacks in under 5 years and still maintain a cash balance over $100b.
  • Reply 47 of 53
    knowitallknowitall Posts: 1,648member
    No, it has not 'gone into nothing'.

    It's being put to productive use by lots of investors to potentially create lots of value.

    Happy to see you agree on Apple having lost 17 billion dollars.
    Diffusing the money to shareholders (or ex shareholders) renders it completely ineffective and makes it a thread to companies because of the short sightedness and gambling nature of shareholders in general.
    Instead Apple could have started an Apple university dedicated to solving important problems like future battery technology, making a new category of super plastics (recently found to be possible), building 'plastics' from the air, expanding cell technology, creating virus medicines and so on. A few Manhattan projects located in one University if you like.
    The Saudis did something like this already using a comparable source of income (oil).
    They could also have started an Apple inventors price to stimulate technology and invention like Dyson did in England.
    And as I mentioned they could have gone to Mars, not only to get there but also because of the huge technology spinoff and work involved.
    They could also have joined forces with Reaction Engines to create the future of aviation and rocket technology.
    All these projects need a huge amount of money and can have a huge spinoff and maybe generate even more money in the future than Apple can now.
    Burning 17 billion dollars is a shame in this respect.
  • Reply 48 of 53
    pfisherpfisher Posts: 758member
    Quote:

    Originally Posted by knowitall View Post





    Happy to see you agree on Apple having lost 17 billion dollars.

    Diffusing the money to shareholders (or ex shareholders) renders it completely ineffective and makes it a thread to companies because of the short sightedness and gambling nature of shareholders in general.

    Instead Apple could have started an Apple university dedicated to solving important problems like future battery technology, making a new category of super plastics (recently found to be possible), building 'plastics' from the air, expanding cell technology, creating virus medicines and so on. A few Manhattan projects located in one University if you like.

    The Saudis did something like this already using a comparable source of income (oil).

    They could also have started an Apple inventors price to stimulate technology and invention like Dyson did in England.

    And as I mentioned they could have gone to Mars, not only to get there but also because of the huge technology spinoff and work involved.

    They could also have joined forces with Reaction Engines to create the future of aviation and rocket technology.

    All these projects need a huge amount of money and can have a huge spinoff and maybe generate even more money in the future than Apple can now.

    Burning 17 billion dollars is a shame in this respect.



    How about a Apple "Streetview" like Google Streetview for maps? Yes, better battery technology and putting the money to use.

     

    Apple seems to only use the money to prop up stocks.

     

    Do they really need to do that?

     

    Invest in Space X.

     

    Invest in something that will provide return.

  • Reply 49 of 53
    knowitallknowitall Posts: 1,648member
    pfisher wrote: »

    How about a Apple "Streetview" like Google Streetview for maps? Yes, better battery technology and putting the money to use.

    Apple seems to only use the money to prop up stocks.

    Do they really need to do that?

    Invest in Space X.

    Invest in something that will provide return.

    Your right. I suggested earlier that Apple could launch its own satellite network for realtime video and hd photos of earth, ideal for maps.
  • Reply 50 of 53
    Originally Posted by knowitall View Post

    Your right. I suggested earlier that Apple could launch its own satellite network for realtime video and hd photos of earth, ideal for maps.

     

    That’s a $10 billion investment, minimum, just for initial infrastructure. Don’t even get me started on the cost of maintenance and actual use.

     

    And it’s illegal in virtually every way.

  • Reply 51 of 53
    Quote:
    Originally Posted by Marvin View Post



    They are high numbers but Google's at 27x. 

    Yeah, sure.

     

    Facebook's PE is even better: 86x. Why can't Apple do that......?

  • Reply 52 of 53
    Quote:

    Originally Posted by knowitall View Post



    Happy to see you agree on Apple having lost 17 billion dollars.

    Diffusing the money to shareholders (or ex shareholders) renders it completely ineffective and makes it a thread to companies because of the short sightedness and gambling nature of shareholders in general.

    Instead Apple could have started an Apple university dedicated to solving important problems like future battery technology, making a new category of super plastics (recently found to be possible), building 'plastics' from the air, expanding cell technology, creating virus medicines and so on. A few Manhattan projects located in one University if you like.

    The Saudis did something like this already using a comparable source of income (oil).

    They could also have started an Apple inventors price to stimulate technology and invention like Dyson did in England.

    And as I mentioned they could have gone to Mars, not only to get there but also because of the huge technology spinoff and work involved.

    They could also have joined forces with Reaction Engines to create the future of aviation and rocket technology.

    All these projects need a huge amount of money and can have a huge spinoff and maybe generate even more money in the future than Apple can now.

    Burning 17 billion dollars is a shame in this respect.

    I don't even know where to begin..... oh boy....

  • Reply 53 of 53
    knowitallknowitall Posts: 1,648member
    I don't even know where to begin..... oh boy....

    Oh boy indeed.
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