It may not be fair perhaps, but it's the way it works. If a company that's losing sales and profits, and has its shares in a long, slow, decline, does less worse than expected, its stock goes up. If a company that's growing and shows good profits, with its stock on a slow long rise, grows less, and has less profits than expected, its stock goes down. Makes little sense to me, but there you have it.
I want these clowns to tell me how a 35% increase in iPhone sales YOY is disappointing. These are the same nervous nellies who have said quarter after quarter that the premium smartphone market is saturated. Yet Apple is growing 35%.
I woud agree with that, theoretically. But, to tell the truth, my dividends from them are too great for me to want to give up now that I'm receiving them.
But what would they do with all that money? They would have a good $300 billion now. There are a few fairly big aquisitions i would liked for them to have made.
I always reinvest my dividends anyway, so it makes no immediate material difference to me. Yes, it's nice to have, but speaking from the POV of the company, how does it really benefit them?
And these short term stock losses won't continue indefinitely. Eventually the fundamentals overcome the manipulation, hype, and sensationalistic negative reporting.
Let me also note that I'd be 100% onboard if they decided to end both the buybacks and the dividend. They don't need either. They continue to grow like a startup.
Ending dividends is not an option. That would be viewed as a terrible negative signal. The literature on this is vast, and the empirical evidence very strong.
Re buybacks, if management does not have good ideas on how to spend the cash, it's best they give it back to the shareholders. Shareholders can put it to better use (or refuse to partake in the buyback).
I want these clowns to tell me how a 35% increase in iPhone sales YOY is disappointing. These are the same nervous nellies who have said quarter after quarter that the premium smartphone market is saturated. Yet Apple is growing 35%.
I just want everyone to know that I don't agree with the extreme reaction we see. I'm just telling the way it works. That doesn't mean it works well.
What are those estimates based on? Wow was it decided at the last minute that 50-53M was the number to beat? These Wall Street clowns can be wrong too. For how many years have these clowns been telling us the premium smartphone market is saturated? If that's the case how can a 35% YOY be a disappointment?
If the estimates are right or wrong is irrelevant, the stock price pre-earnings was based on them regardless. Price action is based on estimates VS results. If someone thinks the estimates are too high before earnings, he should sell before and buy back after.
That being said, I will go with Jim Cramer and say just own Apple, dont trade it. Not trading it also means DO NOT own any short term options, if you want to leverage with options, buy + 1 year or +2 years deep in the money or do a call spread. I always move all of my options to leaps before earnings. Sometimes I play with small amounts at + 3 months, but not too much.
This time around I had 10 november 2015 calls at $150 strikes. Its a very small out of the money play just in case.
It's not a random news report. It's Yahoo Finance, which is read by tens of millions of people. Besides, that's just one report. Every professional trader is thinking the same thing.
Yahoo Finance? Wow. Who knew.
'Every professional trader'? Cmon, you can't be serious.
I told you people back when Apple started issuing dividends, that Apple will never be a high flying stock because of that. I also said at the time the smart money was going to Amazon. Guess I was right. I don't care if they invent an iSpaceship and sell a gazillion of them, this stock will trade relatively sideways until they eliminate the dividends. Mark my words!
Hmmm, lets see. If Apple had never issued a dividend the stock would have been a whopping ..... $5.30 higher than it is today! Now that's some high flying stock!
I always reinvest my dividends anyway, so it makes no immediate material difference to me. Yes, it's nice to have, but speaking from the POV of the company, how does it really benefit them?
A lot of people depend on dividends and interest to supplement their income. In particular, older people who need income. I don't need it, but it's nice to have. Instead of selling stock to buy something heavy, I use the dividends. Remember that you make no money on an investment until you sell it. Yeah, I know you know that, but I had to make the point for the argument. Someone with a large, but not huge, investment of a $million, will get $16,000 a year. Thats a good supplement. For someone who's retired, that could help a lot.
Yup, it's an infuriating stock to own. I'm used to it.
What say you all: do you think their p/e gets compressed to 10 then?
Seriously the only way I can understand AAPL is that inexorably the stock price rises to keep their p/e between 13-19, period. Therefore, the price will need to rise a little due to money made each quarter. The question is, when will it rise, and will the p/e be more like 13 or more like 19.
If traders cause the p/e to compress around 10 then either other investors will buy in or, perhaps, just hoping, the regulators would step in and ask why.
Hmmm, lets see. If Apple had never issued a dividend the stock would have been a whopping ..... $5.30 higher than it is today! Now that's some high flying stock!
I'm not sure how serious he is.
Here is a chart going through last Friday, comparing some companies we know of. Click to enlarge. I bought most of my current shares in mid 2004.
Actually, you're not right. What was Apple's stock at then, and what is it now? Does that seem flat to you
Quote:
Originally Posted by melgross
I disagree. I would prefer it the other way around. Ive never seen evidence that buybacks do anything more than a tempory stock rise.. Apple's price rises because of strong sales and profits, not buybacks.
Seems you're contradicting yourself there.
In fact if anything, it's the other way around, dividends tend to lower a stock slightly and buybacks tend to increase it slightly. So if you're going to do either it makes more sense to do both so they can balance each-other out.
I sometimes wonder were Apple would be now if they listened to all the "expert" finacial advice given on these forums.
Stock price should be valued by estimated free cash flows for the next 5-10 years.
If you are basing stock price on some dumb ass analysist that has no idea how Apple is run you are making a huge mistake. Those same people you 'trust' can be out of a job tomorrow.
You know, you keep imposing your biases onto what the world actually does. Stop saying things like "should". We're not talking about what the market should do, we're talking about what the market does do. I keep hearing about how the market is rational. But anyone who is in the market knows that the market is irrational. If it weren't, you would be right, and no one would ever make any money. Because money is made by beating the expectations.
Yes, over time price will be accrual, but the market wouldn't really exist.
Wrong. Most analysist were not looking for 30% revenue growth for Q4.
The street estimate for Q4 Revenue was $50.1 billion which is not even close to 30% revenue growth YoY
Oh, cut it out already, you don't know what you're talking about. I'm not saying they're looking for a specific number. I said that they base their expectations on what the current quarter is, in growth. They also look at last year's quarter for comparison. But if a company is doing well, and quidence is below what they would expect, going by that growth, then they're not happy campers. There are no exact numbers to use. Don't misquote me.
On the conference call Cook just said ?Watch sales were higher in June than April or May. Just shows how that Slice Intelligence data provided no good reading on Watch sales.
Here is a chart going through last Friday, comparing some companies we know of. Click to enlarge. I bought most of my current shares in mid 2004.
I was merely speaking in relative terms. Of course I agree AAPL is a high flying stock by any reasonable measure. But if you ascribe to the OP's notion that AAPL is not currently a high-flying stock then I can't see how an extra $5.30 (about 4%) would make it so.
I get stock price by estimated Free cash flows generated in the next 5-10 years.
Long term that is where the stock price will be based on.
lol, I could want to based them on my cat mood, won't change anything on how it works. You're method is good long term, so you should not bother on short term moves then... you're a value investor.
In fact if anything, it's the other way around, dividends tend to lower a stock slightly and buybacks tend to increase it slightly. So if you're going to do either it makes more sense to do both so they can balance each-other out.
I sometimes wonder were Apple would be now if they listened to all the "expert" finacial advice given on these forums.
What? Explain how those two statements contradict each other. Despite what he said, the stock went up bcause Apple was doing better. Buybacks and dividends had little to do with it.
Comments
I want these clowns to tell me how a 35% increase in iPhone sales YOY is disappointing. These are the same nervous nellies who have said quarter after quarter that the premium smartphone market is saturated. Yet Apple is growing 35%.
I always reinvest my dividends anyway, so it makes no immediate material difference to me. Yes, it's nice to have, but speaking from the POV of the company, how does it really benefit them?
This is good news from Apple. Great news.
And these short term stock losses won't continue indefinitely. Eventually the fundamentals overcome the manipulation, hype, and sensationalistic negative reporting.
I agree with many here -- time to buy more AAPL.
Ending dividends is not an option. That would be viewed as a terrible negative signal. The literature on this is vast, and the empirical evidence very strong.
Re buybacks, if management does not have good ideas on how to spend the cash, it's best they give it back to the shareholders. Shareholders can put it to better use (or refuse to partake in the buyback).
I want these clowns to tell me how a 35% increase in iPhone sales YOY is disappointing. These are the same nervous nellies who have said quarter after quarter that the premium smartphone market is saturated. Yet Apple is growing 35%.
I just want everyone to know that I don't agree with the extreme reaction we see. I'm just telling the way it works. That doesn't mean it works well.
What are those estimates based on? Wow was it decided at the last minute that 50-53M was the number to beat? These Wall Street clowns can be wrong too. For how many years have these clowns been telling us the premium smartphone market is saturated? If that's the case how can a 35% YOY be a disappointment?
If the estimates are right or wrong is irrelevant, the stock price pre-earnings was based on them regardless. Price action is based on estimates VS results. If someone thinks the estimates are too high before earnings, he should sell before and buy back after.
That being said, I will go with Jim Cramer and say just own Apple, dont trade it. Not trading it also means DO NOT own any short term options, if you want to leverage with options, buy + 1 year or +2 years deep in the money or do a call spread. I always move all of my options to leaps before earnings. Sometimes I play with small amounts at + 3 months, but not too much.
This time around I had 10 november 2015 calls at $150 strikes. Its a very small out of the money play just in case.
Yahoo Finance? Wow. Who knew.
'Every professional trader'? Cmon, you can't be serious.
I told you people back when Apple started issuing dividends, that Apple will never be a high flying stock because of that. I also said at the time the smart money was going to Amazon. Guess I was right. I don't care if they invent an iSpaceship and sell a gazillion of them, this stock will trade relatively sideways until they eliminate the dividends. Mark my words!
Hmmm, lets see. If Apple had never issued a dividend the stock would have been a whopping ..... $5.30 higher than it is today! Now that's some high flying stock!
I always reinvest my dividends anyway, so it makes no immediate material difference to me. Yes, it's nice to have, but speaking from the POV of the company, how does it really benefit them?
A lot of people depend on dividends and interest to supplement their income. In particular, older people who need income. I don't need it, but it's nice to have. Instead of selling stock to buy something heavy, I use the dividends. Remember that you make no money on an investment until you sell it. Yeah, I know you know that, but I had to make the point for the argument. Someone with a large, but not huge, investment of a $million, will get $16,000 a year. Thats a good supplement. For someone who's retired, that could help a lot.
What say you all: do you think their p/e gets compressed to 10 then?
Seriously the only way I can understand AAPL is that inexorably the stock price rises to keep their p/e between 13-19, period. Therefore, the price will need to rise a little due to money made each quarter. The question is, when will it rise, and will the p/e be more like 13 or more like 19.
If traders cause the p/e to compress around 10 then either other investors will buy in or, perhaps, just hoping, the regulators would step in and ask why.
Yahoo Finance? Wow. Who knew.
'Every professional trader'? Cmon, you can't be serious.
Sure they are. They won't all act on it either way, but they are all thinking about it. Some will recommend a sell, and some will recommend a buy.
Hmmm, lets see. If Apple had never issued a dividend the stock would have been a whopping ..... $5.30 higher than it is today! Now that's some high flying stock!
I'm not sure how serious he is.
Here is a chart going through last Friday, comparing some companies we know of. Click to enlarge. I bought most of my current shares in mid 2004.
And people complain when stocks are cheap...and complain when they cost too much.
Buy or sell, but don't complain...
Actually, you're not right. What was Apple's stock at then, and what is it now? Does that seem flat to you
I disagree. I would prefer it the other way around. Ive never seen evidence that buybacks do anything more than a tempory stock rise.. Apple's price rises because of strong sales and profits, not buybacks.
Seems you're contradicting yourself there.
In fact if anything, it's the other way around, dividends tend to lower a stock slightly and buybacks tend to increase it slightly. So if you're going to do either it makes more sense to do both so they can balance each-other out.
I sometimes wonder were Apple would be now if they listened to all the "expert" finacial advice given on these forums.
Wrong.
Stock price should be valued by estimated free cash flows for the next 5-10 years.
If you are basing stock price on some dumb ass analysist that has no idea how Apple is run you are making a huge mistake. Those same people you 'trust' can be out of a job tomorrow.
You know, you keep imposing your biases onto what the world actually does. Stop saying things like "should". We're not talking about what the market should do, we're talking about what the market does do. I keep hearing about how the market is rational. But anyone who is in the market knows that the market is irrational. If it weren't, you would be right, and no one would ever make any money. Because money is made by beating the expectations.
Yes, over time price will be accrual, but the market wouldn't really exist.
Wrong. Most analysist were not looking for 30% revenue growth for Q4.
The street estimate for Q4 Revenue was $50.1 billion which is not even close to 30% revenue growth YoY
Oh, cut it out already, you don't know what you're talking about. I'm not saying they're looking for a specific number. I said that they base their expectations on what the current quarter is, in growth. They also look at last year's quarter for comparison. But if a company is doing well, and quidence is below what they would expect, going by that growth, then they're not happy campers. There are no exact numbers to use. Don't misquote me.
I'm not sure how serious he is.
Here is a chart going through last Friday, comparing some companies we know of. Click to enlarge. I bought most of my current shares in mid 2004.
I was merely speaking in relative terms. Of course I agree AAPL is a high flying stock by any reasonable measure. But if you ascribe to the OP's notion that AAPL is not currently a high-flying stock then I can't see how an extra $5.30 (about 4%) would make it so.
I don't care about Wall Streets BS expectations.
I get stock price by estimated Free cash flows generated in the next 5-10 years.
Long term that is where the stock price will be based on.
lol, I could want to based them on my cat mood, won't change anything on how it works. You're method is good long term, so you should not bother on short term moves then... you're a value investor.
Seems you're contradicting yourself there.
In fact if anything, it's the other way around, dividends tend to lower a stock slightly and buybacks tend to increase it slightly. So if you're going to do either it makes more sense to do both so they can balance each-other out.
I sometimes wonder were Apple would be now if they listened to all the "expert" finacial advice given on these forums.
What? Explain how those two statements contradict each other. Despite what he said, the stock went up bcause Apple was doing better. Buybacks and dividends had little to do with it.