I like the fact that the stock is undervalue, it makes it safe. I would rather have it move up on good quarterly results instead of moving up on "expected" growth. Apple is NOT a speculation bubble, so its safe to invest in.
No stock is ever "undervalued." It is valued every day by the markets (that being the entire purpose of the markets). And a compression of PE is not a good thing, it's a collective decision by investors to discount a company's future earnings, in essence to predict that the earnings growth rate will decline. This process can continue indefinitely. By no means does it make a stock more "safe."
Splitting shares doesn't change the P/E. (And Apple has a bit over $80 billion in the "bank")
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
Nope.
AAPL has never been widely held by retail investors, even when it was cheap. Most of the outstanding shares are held by institutional investors.
The reason to split is to increase trade volume and volatility, which encourages institutions to trade more, whether it's fund managers (Vanguard, Fidelity, Legg Mason, whoever) or automated program trading.
That's a primary reason why Warren Buffett encouraged a 50-to-1 split of Berkshire-Hathaway's Class B shares (the other reason was to distribute ownership to Burlington Northern shareholders). With the BRK-B split, there was enough volume where Berkshire-Hathaway was finally invited to the S&P 500.
A stock split of AAPL isn't going to encourage your Aunt Millie to invest. It's all about the institutions.
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
More small time investors might purchase the stock but then you are headed into even heavier fluctuations. I don't mind a bit that AAPL appears out of the range of the retail crowd...
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
Exactly.
And when somebody says a stock is "undervalued," they mean that they believe it is worth more than its current price in the market. With respect to Apple's current pricing, I agree.
Of course it's all relative and it's all psychological, but compared to most other companies, the market seems to be judging it unfairly. Many (most?) investors are pretty dumb and/or uninformed, which is why so many of us on this site were able to make money on Apple stock. I bought when it was at $18 (and it later split), and I bought more when they announced the iPhone and many people were saying that Apple could never make a good phone. As it turns out, Apple was able to make a pretty good phone, and eventually people realized this and the stock went up. Until the truth is obvious to even the dumbest investors, their opinions will be factored into the share price. If the bulls are right and the bears are wrong, the stock is undervalued. If the bears are right and the bulls are wrong, the stock is overvalued. A stock split would probably make a psychological difference for some people, tipping the balance toward the bulls.
Maybe the institutional investors really don't care about share price--they don't seem to care about profits or growth, so I guess share price wouldn't interest them either.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
There have also been a lot of articles about how Apple can't keep going up despite their continued aggressive revenue growth, because its valuation is so high already. It's kind of the same mentality. If Apple were raking in a trillion dollar per quarter, how much would it be worth?
And when somebody says a stock is "undervalued," they mean that they believe it is worth more than its current price in the market. With respect to Apple's current pricing, I agree.
Of course it's all relative and it's all psychological, but compared to most other companies, the market seems to be judging it unfairly. Many (most?) investors are pretty dumb and/or uninformed, which is why so many of us on this site were able to make money on Apple stock. I bought when it was at $18 (and it later split), and I bought more when they announced the iPhone and many people were saying that Apple could never make a good phone. As it turns out, Apple was able to make a pretty good phone, and eventually people realized this and the stock went up. Until the truth is obvious to even the dumbest investors, their opinions will be factored into the share price. If the bulls are right and the bears are wrong, the stock is overvalued. If the bears are right and the bulls are wrong, the stock is overvalued. A stock split would probably make a psychological difference for some people, tipping the balance toward the bulls.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
There have also been a lot of articles about how Apple can't keep going up despite their continued aggressive revenue growth, because its valuation is so high already. It's kind of the same mentality. If Apple were raking in a trillion dollar per quarter, how much would it be worth?
You would think that the nay-sayers have learned by now. They have too much egg on their faces to see the truth it appears.
1. The iPod would fail because it didn't support Ogg Vorbis.
2. The iPhone was to be an embarrassing mega failure that would drive Apple out of the market and into oblivion. I mean John Dvorak implored Apple to sell the iPhone to someone else before they were humiliated.
3. The iPad was just a big iPhone without the phone and nobody in their right mind would buy one.
What really makes the nay-sayers look incredibly stupid is that their only retort these days is that only stupid people and "sheeple" buy Apple products.
The best way to make the nay-sayers deflate is to ignore them. I am ecstatic about Apple's good fortunes, but don't need to rub others about it. Facts, quality products and revenue speak for themselves, and by gloating over Apple's recent successes you only play the nay-sayers' own game. only my 2 cents ofc.
In other news Blackberry Playbook is on track to sell 10 unit..9 have been already returned..
You know things are likely grim in Playbook land when the ad they're running is literally shouting "FLASH!" over and over (ala Queen's theme for the old Flash Gordon movie). And that's pretty much all it is, so after a while it starts to seem vaguely insane. It goes on long enough to give you plenty of time to think "OK, and what else. No really, anything else. OK this is actually getting kind of annoying. HOLY SHIT SHUT UP!"
They even manage to make you think of the iPad by saying "we've got FLASH, unlike some people we could name", which reduces the entire spot to something between a school yard taunt and a desperate cry for help.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
As a happy purchaser of LVLT at 0.96, I would say the opposite was true for me. Penny stocks are generally too scary, but that was too hard to pass up. At $200 per share (constant market cap), or $2,000, the strategy would just shift to deep-in-the-money calls.
AAPL is at the same point for me; I like managing blocks of 1-2% of my portfolio so I have a little more sense of liquidity. That forces me into options as 100 shares is $34k now. Most investors don't go that high...
They even manage to make you think of the iPad by saying "we've got FLASH, unlike some people we could name", which reduces the entire spot to something between a school yard taunt and a desperate cry for help.
You got it half right. There isn't a taunt in there...
I like the fact that the stock is undervalue, it makes it safe. I would rather have it move up on good quarterly results instead of moving up on "expected" growth. Apple is NOT a speculation bubble, so its safe to invest in.
No stock is ever "undervalued." It is valued every day by the markets (that being the entire purpose of the markets). And a compression of PE is not a good thing, it's a collective decision by investors to discount a company's future earnings, in essence to predict that the earnings growth rate will decline. This process can continue indefinitely. By no means does it make a stock more "safe."
True enough Doc. But despite what you say, the markets very often get the valuation wrong. As Bernard Baruch said, "I made my money by selling too soon." He could also say he made it by buying too soon. In the first case it's fair to say the stock was overvalued by the market, and in the second that it was undervalued. But it's all a matter of perspective.
True enough Doc. But despite what you say, the markets very often get the valuation wrong. As Bernard Baruch said, "I made my money by selling too soon." He could also say he made it by buying too soon. In the first case it's fair to say the stock was overvalued by the market, and in the second that it was undervalued. But it's all a matter of perspective.
They get it differently from what we may think valuations should be, which isn't the same thing as wrong. Baruch is only saying that you can guess what the market is going to do rightly or wrongly.
(I really hope Apple starts to use its money. Build a couple of factories for manufacturing. Outsourcing is not good. How fun is it that Samsung produces A5/memory/NAND memory. One of the biggest competitors have blueprint of Apple stuff to copy it. Same with FoxConn. In the morning they produce Apple stuff. In the afternoon same fabric lines make pirate copies and competitors devices)
Wrong on so many levels. There is no point Apple trying to manufacture commodity products like Flash, or RAM or LCD panels, the margins are lower than on their business and the required volumes to make a profit are huge. As for Foxconn, the facilities that are used to build iStuff are dedicated to Apple. Samsung might have a production line at the same campus, but it would be in separate facilities and they two would be kept very isolated. Partners like Foxconn are a big part of what has allowed Apple to produce so many amazing products in such a short space of time.
Quote:
Buy ARM (10 billion) (for future CPU and today low end chips)
Buy AMD (7-8 billion) (for high end CPU/graphic chips)
Again terrible ideas. Vertical integration doesn't work, DEC kinda proved that. Suppose Apple bought ARM and AMD, and then Intel produced the best chip in 2014. Either Apple would run down its own chip business or it would put out substandard products. Instead Apple is licensing the ARM core and adding value to it. If Intel or AMD or MIPS or another firm produced a chip far and away better, Apple could switch to licensing that core instead.
Quote:
start to licence Ios light to different telephone companies.
Because what the world needs is more phones designed by carriers.
Quote:
start to licence OSx light to Dell/HP.
Because what Apple really needs to do is cannibalize its own (fantastic) margins without notably increasing market penetration? They did this once and it nearly killed the company - it will happen again over Jobs' dead body.
Comments
I like the fact that the stock is undervalue, it makes it safe. I would rather have it move up on good quarterly results instead of moving up on "expected" growth. Apple is NOT a speculation bubble, so its safe to invest in.
No stock is ever "undervalued." It is valued every day by the markets (that being the entire purpose of the markets). And a compression of PE is not a good thing, it's a collective decision by investors to discount a company's future earnings, in essence to predict that the earnings growth rate will decline. This process can continue indefinitely. By no means does it make a stock more "safe."
Splitting shares doesn't change the P/E. (And Apple has a bit over $80 billion in the "bank")
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
Nope.
AAPL has never been widely held by retail investors, even when it was cheap. Most of the outstanding shares are held by institutional investors.
The reason to split is to increase trade volume and volatility, which encourages institutions to trade more, whether it's fund managers (Vanguard, Fidelity, Legg Mason, whoever) or automated program trading.
That's a primary reason why Warren Buffett encouraged a 50-to-1 split of Berkshire-Hathaway's Class B shares (the other reason was to distribute ownership to Burlington Northern shareholders). With the BRK-B split, there was enough volume where Berkshire-Hathaway was finally invited to the S&P 500.
A stock split of AAPL isn't going to encourage your Aunt Millie to invest. It's all about the institutions.
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
More small time investors might purchase the stock but then you are headed into even heavier fluctuations. I don't mind a bit that AAPL appears out of the range of the retail crowd...
A stock split of AAPL isn't going to encourage your Aunt Millie to invest. It's all about the institutions.
I agree totally. Institutional investors drive trading and they don't care about splits.
The only difference it would make is psychological - many more people would want to buy Apple at $34 than at $340, even though the P/E would be the same.
The result of more buying interest could be that the stock goes up, thus raising the price and the P/E. Again, it's mostly psychological, but looking at the numbers and the trends, Apple stock price should be higher. The price hasn't kept up with Apple's growth rate.
Exactly.
And when somebody says a stock is "undervalued," they mean that they believe it is worth more than its current price in the market. With respect to Apple's current pricing, I agree.
Of course it's all relative and it's all psychological, but compared to most other companies, the market seems to be judging it unfairly. Many (most?) investors are pretty dumb and/or uninformed, which is why so many of us on this site were able to make money on Apple stock. I bought when it was at $18 (and it later split), and I bought more when they announced the iPhone and many people were saying that Apple could never make a good phone. As it turns out, Apple was able to make a pretty good phone, and eventually people realized this and the stock went up. Until the truth is obvious to even the dumbest investors, their opinions will be factored into the share price. If the bulls are right and the bears are wrong, the stock is undervalued. If the bears are right and the bulls are wrong, the stock is overvalued. A stock split would probably make a psychological difference for some people, tipping the balance toward the bulls.
Maybe the institutional investors really don't care about share price--they don't seem to care about profits or growth, so I guess share price wouldn't interest them either.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
There have also been a lot of articles about how Apple can't keep going up despite their continued aggressive revenue growth, because its valuation is so high already. It's kind of the same mentality. If Apple were raking in a trillion dollar per quarter, how much would it be worth?
Exactly.
And when somebody says a stock is "undervalued," they mean that they believe it is worth more than its current price in the market. With respect to Apple's current pricing, I agree.
Of course it's all relative and it's all psychological, but compared to most other companies, the market seems to be judging it unfairly. Many (most?) investors are pretty dumb and/or uninformed, which is why so many of us on this site were able to make money on Apple stock. I bought when it was at $18 (and it later split), and I bought more when they announced the iPhone and many people were saying that Apple could never make a good phone. As it turns out, Apple was able to make a pretty good phone, and eventually people realized this and the stock went up. Until the truth is obvious to even the dumbest investors, their opinions will be factored into the share price. If the bulls are right and the bears are wrong, the stock is overvalued. If the bears are right and the bulls are wrong, the stock is overvalued. A stock split would probably make a psychological difference for some people, tipping the balance toward the bulls.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
There have also been a lot of articles about how Apple can't keep going up despite their continued aggressive revenue growth, because its valuation is so high already. It's kind of the same mentality. If Apple were raking in a trillion dollar per quarter, how much would it be worth?
AAPL's valuation isn't high, it's very low.
You would think that the nay-sayers have learned by now. They have too much egg on their faces to see the truth it appears.
1. The iPod would fail because it didn't support Ogg Vorbis.
2. The iPhone was to be an embarrassing mega failure that would drive Apple out of the market and into oblivion. I mean John Dvorak implored Apple to sell the iPhone to someone else before they were humiliated.
3. The iPad was just a big iPhone without the phone and nobody in their right mind would buy one.
What really makes the nay-sayers look incredibly stupid is that their only retort these days is that only stupid people and "sheeple" buy Apple products.
The best way to make the nay-sayers deflate is to ignore them. I am ecstatic about Apple's good fortunes, but don't need to rub others about it. Facts, quality products and revenue speak for themselves, and by gloating over Apple's recent successes you only play the nay-sayers' own game.
In other news Blackberry Playbook is on track to sell 10 unit..9 have been already returned..
You know things are likely grim in Playbook land when the ad they're running is literally shouting "FLASH!" over and over (ala Queen's theme for the old Flash Gordon movie). And that's pretty much all it is, so after a while it starts to seem vaguely insane. It goes on long enough to give you plenty of time to think "OK, and what else. No really, anything else. OK this is actually getting kind of annoying. HOLY SHIT SHUT UP!"
They even manage to make you think of the iPad by saying "we've got FLASH, unlike some people we could name", which reduces the entire spot to something between a school yard taunt and a desperate cry for help.
Exactly.
A few months ago, I was looking at LVLT stock, and I mentioned it to a fellow investor who said to me, "It's only trading at $1/share, why don't you just buy some?" To me, the share price doesn't make a difference, so I didn't look at it that way, but it has more than doubled in the last few months, now I wish I had! I'm sure if I had told the same person that it was trading at $2,000 a share, they would not have been so enthusiastic.
As a happy purchaser of LVLT at 0.96, I would say the opposite was true for me. Penny stocks are generally too scary, but that was too hard to pass up. At $200 per share (constant market cap), or $2,000, the strategy would just shift to deep-in-the-money calls.
AAPL is at the same point for me; I like managing blocks of 1-2% of my portfolio so I have a little more sense of liquidity. That forces me into options as 100 shares is $34k now. Most investors don't go that high...
They even manage to make you think of the iPad by saying "we've got FLASH, unlike some people we could name", which reduces the entire spot to something between a school yard taunt and a desperate cry for help.
You got it half right. There isn't a taunt in there...
I like the fact that the stock is undervalue, it makes it safe. I would rather have it move up on good quarterly results instead of moving up on "expected" growth. Apple is NOT a speculation bubble, so its safe to invest in.
aapl could it 445 a share and still be cheap
No stock is ever "undervalued." It is valued every day by the markets (that being the entire purpose of the markets). And a compression of PE is not a good thing, it's a collective decision by investors to discount a company's future earnings, in essence to predict that the earnings growth rate will decline. This process can continue indefinitely. By no means does it make a stock more "safe."
True enough Doc. But despite what you say, the markets very often get the valuation wrong. As Bernard Baruch said, "I made my money by selling too soon." He could also say he made it by buying too soon. In the first case it's fair to say the stock was overvalued by the market, and in the second that it was undervalued. But it's all a matter of perspective.
True enough Doc. But despite what you say, the markets very often get the valuation wrong. As Bernard Baruch said, "I made my money by selling too soon." He could also say he made it by buying too soon. In the first case it's fair to say the stock was overvalued by the market, and in the second that it was undervalued. But it's all a matter of perspective.
They get it differently from what we may think valuations should be, which isn't the same thing as wrong. Baruch is only saying that you can guess what the market is going to do rightly or wrongly.
Apple urgently needs to split its share 1/10.
(I really hope Apple starts to use its money. Build a couple of factories for manufacturing. Outsourcing is not good. How fun is it that Samsung produces A5/memory/NAND memory. One of the biggest competitors have blueprint of Apple stuff to copy it. Same with FoxConn. In the morning they produce Apple stuff. In the afternoon same fabric lines make pirate copies and competitors devices)
Wrong on so many levels. There is no point Apple trying to manufacture commodity products like Flash, or RAM or LCD panels, the margins are lower than on their business and the required volumes to make a profit are huge. As for Foxconn, the facilities that are used to build iStuff are dedicated to Apple. Samsung might have a production line at the same campus, but it would be in separate facilities and they two would be kept very isolated. Partners like Foxconn are a big part of what has allowed Apple to produce so many amazing products in such a short space of time.
Buy ARM (10 billion) (for future CPU and today low end chips)
Buy AMD (7-8 billion) (for high end CPU/graphic chips)
Again terrible ideas. Vertical integration doesn't work, DEC kinda proved that. Suppose Apple bought ARM and AMD, and then Intel produced the best chip in 2014. Either Apple would run down its own chip business or it would put out substandard products. Instead Apple is licensing the ARM core and adding value to it. If Intel or AMD or MIPS or another firm produced a chip far and away better, Apple could switch to licensing that core instead.
start to licence Ios light to different telephone companies.
Because what the world needs is more phones designed by carriers.
start to licence OSx light to Dell/HP.
Because what Apple really needs to do is cannibalize its own (fantastic) margins without notably increasing market penetration? They did this once and it nearly killed the company - it will happen again over Jobs' dead body.