Apple: The Most Undervalued Large-Cap Stock in America

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  • Reply 81 of 216
    Quote:
    Originally Posted by Asherian View Post


    It's really simple. You don't buy a stock based on what it did in the past or even what it did today. You buy a stock for its future performance.



    It's quite obvious that the market doesn't have much faith in Apple without Jobs, and the underwhelming launch of the iPhone 4S didn't help. And yes, I'm well aware of the spin of the fastest selling iPhone ever -- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.



    The percentage growth rate AAPL has been on has been stunning, to be sure. But the low P/E indicates that the market, as a whole, thinks the ride is over and that kind of growth is not going to continue. Especially sans Jobs.



    Statistically, AAPL is undervalued for its current earnings. No doubt. But I know a great many people who now won't touch AAPL stock.



    On a 2 to 5 year timescale, that might be understandable. At least you stay more alert.



    But as Zaky said



    ??Wall Street is currently modeling for massive contraction in the growth rate. That?s an unwise decision given that Apple just guided fiscal Q1 2012 ? this quarter ? for 80% earnings growth. Notice, Wall Street is modeling for 25% growth while Apple has guided for 80% growth. Who do you believe??



    Of course Wall Street has been modelling for massive contraction in the growth rate next year, every year since pretty much forever. They haven?t been right yet. That has been going on since long before Jobs health was an issue.



    And I suspect you would have to go back further than that to find a quarter where Apple didn?t meet their own guidance. Oppenheimer has been doing the guidance for years. He hasn't changed.





    Have Apple ever guided higher that 80%. This isn't about 2 years forward, or 5, This is about January. I can here that P/E compression creaking.
  • Reply 82 of 216
    Zaky makes a compelling argument in favor of Apple going much higher. Even in the face of P/E compression and conservative earnings estimates we are looking at 500 a share sometime next year. But if the market gives Apple any kind of breathing room we are looking at 600 a share in 2013. This is a load-the-boat moment in my view! I am long Apple!
  • Reply 83 of 216
    If only for a dividend. Tim apparently is rumored to be considering one.



    and



    APPL can be pretty volatile so not for the faint of heart. Just need to be sure you are in it for the long term and not to make a quick buck.
  • Reply 84 of 216
    wingswings Posts: 261member
    I'm convinced that what will turn this trend around is a 1-to-10 stock split. Now I KNOW that realistically there is no difference in 1 share at 400 or 10 at 40, but to a lot of the typical investors, it is. Many people I know who are afraid of AAPL say the same thing, "It's too expensive!". Bring the price down to $40 and some of those people would buy in. Enough, I'm saying, to give this stock a shot in the arm.



    C'mon Tim, do it. What have we got to lose?
  • Reply 85 of 216
    asciiascii Posts: 5,941member
    So the author thinks he knows better than the many thousands of market participants, weighing all the pros and cons, who have made the price what it is. He is smarter than *all those thousands.*



    Mate, there is a place for those who think they're smarter than everybody else: Washington, D.C.
  • Reply 86 of 216
    Eye opening article by the author! For once,a write up based on facts. Time to back up the truck - astronomic growth rates and no debt: are u kidding me? With PE compression on the one side and a ginormous cash balance acting as a floor for the stock price, for me that 2+2=>$500 in 2012! Cannot believe that investors shy away because SJ is no longer around! This ship is about to take off, people! Don't fall for rumors, they only let the big guys come in when the retail investor gives up and sells.
  • Reply 87 of 216
    Quote:
    Originally Posted by djdj View Post


    But if Apple doesn't pay dividends, what do sales and earnings have to do with stock price? Stockholders aren't getting a dime of that money.



    My thoughts exactly. Warren Buffet (of Berkshire-Hathaway) has said that he's not interested in owning stock that doesn't pay dividends. When large institutional investors like Berkshire-Hathaway go long in a company, they tend to buy and hold; that signals to others that it's a safe bet for a long-term investment.



    Apple has followed a growth stock philosophy. They hold all of the profits in the company for acquisitions, large supply chain investments, and a huge amount of liquidity. This strategy has served them extremely well over the last few years, and I'm sure they're reluctant to change it, hence no dividend payments.



    So how does one make any money off of Apple stock? Well you can buy it, and hope the stock price goes up, or you can short-sell it hoping the price goes down. Not very much like owning a piece of a business, is it?



    Until Apple decides the time is right to change their stock strategy, I think the volatility will remain, and AAPL will remain one of the most manipulated stocks in the US.
  • Reply 88 of 216
    Quote:
    Originally Posted by ascii View Post


    So the author thinks he knows better than the many thousands of market participants, weighing all the pros and cons, who have made the price what it is. He is smarter than *all those thousands.*



    Mate, there is a place for those who think they're smarter than everybody else: Washington, D.C.



    Are you seriously, with a straight face, implying that Wall Street players always have it right? You think that Wall Street investors always value and gauge a company and its Stock fairly? If that were the case, great buys and huge upswings wouldn't exist.



    Hilarious.
  • Reply 89 of 216
    MacProMacPro Posts: 19,334member
    Quote:
    Originally Posted by frugality View Post


    Wow.....amazing what you get here on these interwebs....financial advice on a Apple fanboy site...



    Someone should check how much Apple stock this Zaky guy owns, and what his vested interests are in this...



    So you think he made up the data?
  • Reply 90 of 216
    MacProMacPro Posts: 19,334member
    Quote:
    Originally Posted by Mister Snitch View Post


    The market's heading down. Apple's along for the ride like everyone else. Buy it back on the upswing.



    How do you get an upswing is no one is buying?
  • Reply 91 of 216
    MacProMacPro Posts: 19,334member
    Quote:
    Originally Posted by Suddenly Newton View Post


    What an odd article. Is it news, rumor, review, or other?



    All three and far more.





    Quote:
    Originally Posted by Wings View Post


    I'm convinced that what will turn this trend around is a 1-to-10 stock split. Now I KNOW that realistically there is no difference in 1 share at 400 or 10 at 40, but to a lot of the typical investors, it is. Many people I know who are afraid of AAPL say the same thing, "It's too expensive!". Bring the price down to $40 and some of those people would buy in. Enough, I'm saying, to give this stock a shot in the arm.



    C'mon Tim, do it. What have we got to lose?



    I too have often wondered if this would work even though technically it makes no difference (so they say). I had thought in terms of a 2:1 but 10:1 wow ... that would put the cat among the pigeons! I could see grandparents buying a few Apple shares for the grand kids for a birthday present ( we did for ours back at $70). Like you I suspect the psychological change would attract a new type of investor, the small guys, those in it for the long term rather than the short. Tim knows all in this article better than anyone, I really wonder what's going though his mind.
  • Reply 92 of 216
    ...said the man overloaded with Apple stock.
  • Reply 93 of 216
    MacProMacPro Posts: 19,334member
    Quote:
    Originally Posted by Firefly7475 View Post


    ...said the man overloaded with Apple stock.



    Hopefully that man will laugh last and longest.
  • Reply 94 of 216
    My opinion is that Apple gets a bum rap from the Street because they do things differently - and that does not bode well for their stock. Just look at how most Street players still use RIM's blackberry and are not punishing them nearly as much as they should be given their poor long-term outlook.



    They don't get it and probably won't ever get it. It's similar to the reaction you hear from some Apple hating consumers - they don't have a real justification for their hatred (a strong word, but one that does seem to reflect how many people feel).
  • Reply 95 of 216
    MacProMacPro Posts: 19,334member
    Quote:
    Originally Posted by jmgregory1 View Post


    My opinion is that Apple gets a bum rap from the Street because they do things differently - and that does not bode well for their stock. Just look at how most Street players still use RIM's blackberry and are not punishing them nearly as much as they should be given their poor long-term outlook.



    They don't get it and probably won't ever get it. It's similar to the reaction you hear from some Apple hating consumers - they don't have a real justification for their hatred (a strong word, but one that does seem to reflect how many people feel).



    In theory investors don't have to like or dislike the products of a company they invest in, they just do it to make money, not that I disagree with you that this does go on to some extent. However, there is something larger going on here than simply the anti Apple sentiment surely.
  • Reply 96 of 216
    Quote:
    Originally Posted by frugality View Post


    Wow.....amazing what you get here on these interwebs....financial advice on a Apple fanboy site...



    Someone should check how much Apple stock this Zaky guy owns, and what his vested interests are in this...



    ... and yet you come here time and again to read and discuss
  • Reply 97 of 216
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by ascii View Post


    So the author thinks he knows better than the many thousands of market participants, weighing all the pros and cons, who have made the price what it is. He is smarter than *all those thousands.*



    Mate, there is a place for those who think they're smarter than everybody else: Washington, D.C.



    ^^^ this
  • Reply 98 of 216
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by Godzilla View Post


    Are you seriously, with a straight face, implying that Wall Street players always have it right? You think that Wall Street investors always value and gauge a company and its Stock fairly? If that were the case, great buys and huge upswings wouldn't exist.



    Hilarious.



    Always right? No of course not. Always fairly? Yes. By definition.
  • Reply 99 of 216
    Quote:
    Originally Posted by Asherian View Post


    It's really simple. You don't buy a stock based on what it did in the past or even what it did today. You buy a stock for its future performance.



    It's quite obvious that the market doesn't have much faith in Apple without Jobs, and the underwhelming launch of the iPhone 4S didn't help. And yes, I'm well aware of the spin of the fastest selling iPhone ever -- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.



    The percentage growth rate AAPL has been on has been stunning, to be sure. But the low P/E indicates that the market, as a whole, thinks the ride is over and that kind of growth is not going to continue. Especially sans Jobs.



    Statistically, AAPL is undervalued for its current earnings. No doubt. But I know a great many people who now won't touch AAPL stock.



    The future of a stock's performance is of course based on past performance, anyone who does any sort of prognostication in any field will confirm that - the stock market is a major proponent of that simple fact, and you can't simply reverse the whole underpinnings of the financials market to suit your opinion.



    The iPhone 4S was anything but underwhelming and calling out wider delivery to other countries is rather silly. Would you have rather they continued to ignore or delay these other countries for the mere convenience of being same/same for comparison purposes to the iPhone 4 launch? That requires an absurd level of denial. If anything the market would (under other circumstances and with another company perhaps) have REWARDED such strategy.



    The market as a whole is not trading in AAPL stock, there are specific reasons that the P/E ratio is being suppressed. Most other companies in the same category are underperforming and Apple is the only one that is overperforming. If you look at the primary stockholders for AAPL, you will see the actual reason behind the supression of the P/E ratio. The primary shareholders in Apple stock include FMR, Vanguard, State Street, T. Rowe Price, BlackRock Institutional Trust Company, Capital World Investors, Capital Research Global Investors, Invesco Ltd., JP Morgan Chase, Northern Trust Corp, Fidelity Contra, GFA, Powershares, and College Retirement Equities. 70% of Apple stock is held by these institutional shareholders. Understanding that, it is simple to look for them to attempt a "slingshot" effect by supressing Apple stock until the P/E ratio pressure is high enough to push it into rapid decompression effectively driving the valuation up to a significantly higher hold point. At which point they can begin doing the same thing all over again. These institutional investors are playing with Apple stock because it is the strongest performer in the market among the large cap set.



    So the "great many people" you know that won't touch Apple stock are going to be very chagrined when these investors release the pressure on Apple stock and let it snap up to the next hold point.
  • Reply 100 of 216
    Quote:
    Originally Posted by DamenS View Post


    Idiot. Do you have an actual response to this person's claims, are you just trolling yourself, or do you believe that every opinion which runs counter to yours is a personal attack (in which case, please get over yourself) !!



    [EDIT]: I withdraw my comment based on your further posts.
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