One thing I haven't seen mentioned lately is all the insider selling that occurred in November and December. There are many reasons to sell...taxes, need money for new house, belief stock price rose too far too fast and will sink when the company misses analysts' expectations at the next earnings call, etc. Most commenters on here assumed it was because of taxes. Perhaps that assumption was incorrect.
Obviously, it wasn't the taxes. If it was taxes, how would you explain the massive price drop in January - after Apple released record results, cash flow which increased 33% from the previous year, and record iPhone and iPad sales?
"Let's say the industry earns $100 M. Apple could earn $110 M - if someone lost $10 M and everyone else broke even."
OK, but that's why Tallest Skil said "profits" and not "earnings".
I'm still a little confused about that, but wouldn't it be the same, just change the word to 'profits'? If all companies break even, making no profit, Apple makes 10 billion profit, and one company loses 1 million…
Still, that's not over 100%; it's just 100%. That others lost doesn't add to someone's winnings, despite what politics would have you believe (perpetually topical! hi-yo!).
I'm still a little confused about that, but wouldn't it be the same, just change the word to 'profits'? If all companies break even, making no profit, Apple makes 10 billion profit, and one company loses 1 million…
Still, that's not over 100%; it's just 100%. That others lost doesn't add to someone's winnings, despite what politics would have you believe (perpetually topical! hi-yo!).
The industries loss doesn't add to the companies gain, but it does mean the percentage of profits is greater. Again if all other companies lose $1 Billion and Apple makes $10 Billion. The industry as a whole has profits of $9 Billion. Thus Apple has abuot 112% of industry profits. Simple but confusing math.
Stock analysis is one of the more ridiculous professions in the world today. You can be wrong every time, but the company you research is at fault for not matching your predictions. No other profession would celebrate their failures like stock analysts.
I'm still a little confused about that, but wouldn't it be the same, just change the word to 'profits'? If all companies break even, making no profit, Apple makes 10 billion profit, and one company loses 1 million…
Still, that's not over 100%; it's just 100%. That others lost doesn't add to someone's winnings, despite what politics would have you believe (perpetually topical! hi-yo!).
You're wrong. I already explained it.
Keep in mind that 'earns' means 'profits'. Not revenues.
You really should pick up a basic business finance book if you're going to comment on things like ths.
Apple makes the best products bar none, and Samsung churns out copy-cat swill, but a lot of people don't know the difference. Everyone laps up Google's nonsense about innovation, and try to shoot down Apple's hubris. The fact is that Apple has hits, and Google has misses. For some reason the press would prefer to criticize Apple.
[" url="/t/155650/apple-shifting-its-guidance-to-stop-being-blamed-for-missing-analyst-expectations#post_2265280"]I didn't find the exact chart which I was looking for, but I found a similar one, which shows what I was mentioning about Apple's guidance. Isn't Q1 2010 - Q3 2010 similar to what Apple has implemented now again? You can see how Apple provides a range, instead of just one figure.
Stock is going down on growth decelaration and margins. This is causing a shift in fund ownership from growth to value.
This will provide a chance to pick up the stock at undervalue levels even by value stock metrics. If apple can maintain small eps growth this will play out fine.
But apple is flirthing with yoy declines now, so there is still a risk even at the current price.
I've been an Apple investor since 2006. I recently got out of the stock entirely, because of their guidance. Like the article says they've always guided conservatively and so low guidance wasn't a great reason to sell. They made it really clear during the conference call that their guidance was a range they'd be pretty sure they'd land within, and they wouldn't sandbag any longer.
Well they if you take the data points they guided for in the quarter ending in March and figure out the range of EPS that they can hit using those parameters, then they've guided very low.
Using their ranges, the upper bound is approximately $10.20 EPS, the lower bound is $8.30 EPS. Compare this with the year ago March quarter that had $12.30 EPS. Basically they guided at best 17% drop in profits, and at worst a 32.5% drop in profits Y/Y.
No one is going to be happy with that. If they're not growing profits, then a P/E in the range of 8-11 is probably pretty fair for a company of their size, and that's exactly the range they're in right now. So the market has done a pretty good job of pricing them accordingly.
I don't think the price drop has anything to do with the holiday quarter, that was a great quarter for them. It's this next one that's not going to be good, especially if they're serious about not low-balling estimates.
It's happening already. All will be well, when the other shoe (patent) drops.
Unfortunately, Apple's legal strategy has been an unmitigated disaster. I wish that weren't so. If their legal team was conducting "thermonuclear war", they needed a death star.
I've been an Apple investor since 2006. I recently got out of the stock entirely, because of their guidance. Like the article says they've always guided conservatively and so low guidance wasn't a great reason to sell. They made it really clear during the conference call that their guidance was a range they'd be pretty sure they'd land within, and they wouldn't sandbag any longer.
Well they if you take the data points they guided for in the quarter ending in March and figure out the range of EPS that they can hit using those parameters, then they've guided very low.
Using their ranges, the upper bound is approximately $10.20 EPS, the lower bound is $8.30 EPS. Compare this with the year ago March quarter that had $12.30 EPS. Basically they guided at best 17% drop in profits, and at worst a 32.5% drop in profits Y/Y.
No one is going to be happy with that. If they're not growing profits, then a P/E in the range of 8-11 is probably pretty fair for a company of their size, and that's exactly the range they're in right now. So the market has done a pretty good job of pricing them accordingly.
I don't think the price drop has anything to do with the holiday quarter, that was a great quarter for them. It's this next one that's not going to be good, especially if they're serious about not low-balling estimates.
While I agree with almost everything you say, I think Apple's plan to adjust their device release schedules has totally destroyed any quarterly YoY comparison. I think a yearly YoY comparison makes more sense, but the damage is already done, and I think Apple deserves a lot of blame for their inability to deliver good numbers. Apple should not be production constrained on the iPhone 4, a 2 year old phone. Samsung doesn't seem to have the same production problems Apple does. They churned out something like 90M more phones last year than Apple.
Tallest Skil wrote:
Because as hard as everyone else is failing, Apple can't make 100.0000001% of the profits of the mobile industry. But Wall Street analysts can claim they will.
Really?? Geez I could have swore I saw Samsung up 73%. I could be wrong though.
Samsung seeing a 73% increase in profits is not the same as Samsung making 73% of the mobile industry's profits.
I've been an Apple investor since 2006. I recently got out of the stock entirely, because of their guidance. Like the article says they've always guided conservatively and so low guidance wasn't a great reason to sell. They made it really clear during the conference call that their guidance was a range they'd be pretty sure they'd land within, and they wouldn't sandbag any longer.
Well they if you take the data points they guided for in the quarter ending in March and figure out the range of EPS that they can hit using those parameters, then they've guided very low.
Using their ranges, the upper bound is approximately $10.20 EPS, the lower bound is $8.30 EPS. Compare this with the year ago March quarter that had $12.30 EPS. Basically they guided at best 17% drop in profits, and at worst a 32.5% drop in profits Y/Y.
No one is going to be happy with that. If they're not growing profits, then a P/E in the range of 8-11 is probably pretty fair for a company of their size, and that's exactly the range they're in right now. So the market has done a pretty good job of pricing them accordingly.
I don't think the price drop has anything to do with the holiday quarter, that was a great quarter for them. It's this next one that's not going to be good, especially if they're serious about not low-balling estimates.
How does Amazon stock survive in such a framing? They've not made more than $1 per share any quarter in the last four years, even lost $0.60 a share last quarter and they're now at $284. I'm asking because several members have pointed out a continuing pricing disparity between Apple and any of the other large tech giants.
While I agree with almost everything you say, I think Apple's plan to adjust their device release schedules has totally destroyed any quarterly YoY comparison. I think a yearly YoY comparison makes more sense, but the damage is already done, and I think Apple deserves a lot of blame for their inability to deliver good numbers. Apple should not be production constrained on the iPhone 4, a 2 year old phone. Samsung doesn't seem to have the same production problems Apple does. They churned out something like 90M more phones last year than Apple.
Apple has record setting qtrs. how is that not good numbers? You can't blame Apple for the 4 when the 4S and 5 are newer. I rather Apple have constraints on the 4 than having too much inventory of the 2 yo device.
You can't compare Apple with Sammy. The latter doesn't release actual numbers. In addition, it's probably easier to produce cheap crap. And if you focus on the "premium phones", the iPhone outsells the Galaxy series.
When you get as big as Apple is how do you do that? Law of large numbers come into play.
You go after a bigger market. I have one word for you...no, not plastics...enterprise.
Much as a huge number of people, including myself, would love to see some serious competition in the enterprise segment, I suspect it is delusionary wishful thinking to think that Apple can crack that market. They simply don't have the products in software or the experience. It would be fantastic to see the microsoft stranglehold get broken, but I reckon the chances of that are indistinguishably close to zero. From the reports I have seen re messaging and iCloud, to name but two examples, the Apple offering is orders of magnitude away from what enterprises are demanding, and the established players (MS, HP, IBM) would not give up that space without serious fighting.
Apple is unfortunately a consumer-oriented company with a consumer-oriented mindset. Cool look and feel, premium priced devices and an obsession with high margins will all stand in their way. I do have some considerable experience with the mindset of corporate IT in multinational companies and it would astonish me to see any of them going apple any time soon. As far as I can tell, the ONLY inroad in this sector that Apple has made is with the iPAD, but that's by no means the only thing they need to drive MS out of its practicallly monopoly on enterprise.
Much as a huge number of people, including myself, would love to see some serious competition in the enterprise segment, I suspect it is delusionary wishful thinking to think that Apple can crack that market. They simply don't have the products in software or the experience. It would be fantastic to see the microsoft stranglehold get broken, but I reckon the chances of that are indistinguishably close to zero. From the reports I have seen re messaging and iCloud, to name but two examples, the Apple offering is orders of magnitude away from what enterprises are demanding, and the established players (MS, HP, IBM) would not give up that space without serious fighting.
Apple is unfortunately a consumer-oriented company with a consumer-oriented mindset. Cool look and feel, premium priced devices and an obsession with high margins will all stand in their way. I do have some considerable experience with the mindset of corporate IT in multinational companies and it would astonish me to see any of them going apple any time soon. As far as I can tell, the ONLY inroad in this sector that Apple has made is with the iPAD, but that's by no means the only thing they need to drive MS out of its practicallly monopoly on enterprise.
In my company they made inroads with the iPhone. We use to be blackberry, then win mobile and android and now they recommend iPhone.
How does Amazon stock survive in such a framing? They've not made more than $1 per share any quarter in the last four years, even lost $0.60 a share last quarter and they're now at $284. I'm asking because several members have pointed out a continuing pricing disparity between Apple and any of the other large tech giants.
I don't think the disparity is fair to Apple. However, I don't think Amazon's valuation is right. I think it's way over valued, and over the long term will have to come down.
Amazon is a great company, but ultimately its a business that makes it's money by taking market share and lowering the margins of every business it enters. It's a long term low margin business. I don't think there's going to be some great day in the future for them, when after they've stolen market share from every brick and mortar store on the planet, that they're going to magically up their margins. I hope investors realize this after a couple of quarters of more disappointing earnings.
I don't short stocks, but if I did, I'd short Amazon.
Comments
Obviously, it wasn't the taxes. If it was taxes, how would you explain the massive price drop in January - after Apple released record results, cash flow which increased 33% from the previous year, and record iPhone and iPad sales?
OK, but that's why Tallest Skil said "profits" and not "earnings".
Originally Posted by jpellino
"Let's say the industry earns $100 M. Apple could earn $110 M - if someone lost $10 M and everyone else broke even."
OK, but that's why Tallest Skil said "profits" and not "earnings".
I'm still a little confused about that, but wouldn't it be the same, just change the word to 'profits'? If all companies break even, making no profit, Apple makes 10 billion profit, and one company loses 1 million…
Still, that's not over 100%; it's just 100%. That others lost doesn't add to someone's winnings, despite what politics would have you believe (perpetually topical! hi-yo!).
Found this to be and interesting read on the way Wall Street is treating Apple stock....
http://finance.yahoo.com/news/apple-slaying-tech-hero-190310561.html
Quote:
Originally Posted by Tallest Skil
I'm still a little confused about that, but wouldn't it be the same, just change the word to 'profits'? If all companies break even, making no profit, Apple makes 10 billion profit, and one company loses 1 million…
Still, that's not over 100%; it's just 100%. That others lost doesn't add to someone's winnings, despite what politics would have you believe (perpetually topical! hi-yo!).
The industries loss doesn't add to the companies gain, but it does mean the percentage of profits is greater. Again if all other companies lose $1 Billion and Apple makes $10 Billion. The industry as a whole has profits of $9 Billion. Thus Apple has abuot 112% of industry profits. Simple but confusing math.
Stock analysis is one of the more ridiculous professions in the world today. You can be wrong every time, but the company you research is at fault for not matching your predictions. No other profession would celebrate their failures like stock analysts.
You're wrong. I already explained it.
Keep in mind that 'earns' means 'profits'. Not revenues.
You really should pick up a basic business finance book if you're going to comment on things like ths.
Quote:
Originally Posted by ndirishfan1975
Found this to be and interesting read on the way Wall Street is treating Apple stock....
http://finance.yahoo.com/news/apple-slaying-tech-hero-190310561.html
Apple makes the best products bar none, and Samsung churns out copy-cat swill, but a lot of people don't know the difference. Everyone laps up Google's nonsense about innovation, and try to shoot down Apple's hubris. The fact is that Apple has hits, and Google has misses. For some reason the press would prefer to criticize Apple.
Stock is going down on growth decelaration and margins. This is causing a shift in fund ownership from growth to value.
This will provide a chance to pick up the stock at undervalue levels even by value stock metrics. If apple can maintain small eps growth this will play out fine.
But apple is flirthing with yoy declines now, so there is still a risk even at the current price.
Well they if you take the data points they guided for in the quarter ending in March and figure out the range of EPS that they can hit using those parameters, then they've guided very low.
Using their ranges, the upper bound is approximately $10.20 EPS, the lower bound is $8.30 EPS. Compare this with the year ago March quarter that had $12.30 EPS. Basically they guided at best 17% drop in profits, and at worst a 32.5% drop in profits Y/Y.
No one is going to be happy with that. If they're not growing profits, then a P/E in the range of 8-11 is probably pretty fair for a company of their size, and that's exactly the range they're in right now. So the market has done a pretty good job of pricing them accordingly.
I don't think the price drop has anything to do with the holiday quarter, that was a great quarter for them. It's this next one that's not going to be good, especially if they're serious about not low-balling estimates.
Quote:
Originally Posted by stelligent
It's happening already. All will be well, when the other shoe (patent) drops.
Unfortunately, Apple's legal strategy has been an unmitigated disaster. I wish that weren't so. If their legal team was conducting "thermonuclear war", they needed a death star.
Quote:
Originally Posted by onelungedwonder
I've been an Apple investor since 2006. I recently got out of the stock entirely, because of their guidance. Like the article says they've always guided conservatively and so low guidance wasn't a great reason to sell. They made it really clear during the conference call that their guidance was a range they'd be pretty sure they'd land within, and they wouldn't sandbag any longer.
Well they if you take the data points they guided for in the quarter ending in March and figure out the range of EPS that they can hit using those parameters, then they've guided very low.
Using their ranges, the upper bound is approximately $10.20 EPS, the lower bound is $8.30 EPS. Compare this with the year ago March quarter that had $12.30 EPS. Basically they guided at best 17% drop in profits, and at worst a 32.5% drop in profits Y/Y.
No one is going to be happy with that. If they're not growing profits, then a P/E in the range of 8-11 is probably pretty fair for a company of their size, and that's exactly the range they're in right now. So the market has done a pretty good job of pricing them accordingly.
I don't think the price drop has anything to do with the holiday quarter, that was a great quarter for them. It's this next one that's not going to be good, especially if they're serious about not low-balling estimates.
While I agree with almost everything you say, I think Apple's plan to adjust their device release schedules has totally destroyed any quarterly YoY comparison. I think a yearly YoY comparison makes more sense, but the damage is already done, and I think Apple deserves a lot of blame for their inability to deliver good numbers. Apple should not be production constrained on the iPhone 4, a 2 year old phone. Samsung doesn't seem to have the same production problems Apple does. They churned out something like 90M more phones last year than Apple.
Samsung seeing a 73% increase in profits is not the same as Samsung making 73% of the mobile industry's profits.
How does Amazon stock survive in such a framing? They've not made more than $1 per share any quarter in the last four years, even lost $0.60 a share last quarter and they're now at $284. I'm asking because several members have pointed out a continuing pricing disparity between Apple and any of the other large tech giants.
Apple has record setting qtrs. how is that not good numbers? You can't blame Apple for the 4 when the 4S and 5 are newer. I rather Apple have constraints on the 4 than having too much inventory of the 2 yo device.
You can't compare Apple with Sammy. The latter doesn't release actual numbers. In addition, it's probably easier to produce cheap crap. And if you focus on the "premium phones", the iPhone outsells the Galaxy series.
Quote:
Originally Posted by ifij775
Quote:
Originally Posted by Rogifan
When you get as big as Apple is how do you do that? Law of large numbers come into play.
You go after a bigger market. I have one word for you...no, not plastics...enterprise.
Much as a huge number of people, including myself, would love to see some serious competition in the enterprise segment, I suspect it is delusionary wishful thinking to think that Apple can crack that market. They simply don't have the products in software or the experience. It would be fantastic to see the microsoft stranglehold get broken, but I reckon the chances of that are indistinguishably close to zero. From the reports I have seen re messaging and iCloud, to name but two examples, the Apple offering is orders of magnitude away from what enterprises are demanding, and the established players (MS, HP, IBM) would not give up that space without serious fighting.
Apple is unfortunately a consumer-oriented company with a consumer-oriented mindset. Cool look and feel, premium priced devices and an obsession with high margins will all stand in their way. I do have some considerable experience with the mindset of corporate IT in multinational companies and it would astonish me to see any of them going apple any time soon. As far as I can tell, the ONLY inroad in this sector that Apple has made is with the iPAD, but that's by no means the only thing they need to drive MS out of its practicallly monopoly on enterprise.
In my company they made inroads with the iPhone. We use to be blackberry, then win mobile and android and now they recommend iPhone.
There are always dumb posts, but #30 in this thread takes the cake (assuming the numbering is the same whether you blocked anyone or not).
Quote:
How does Amazon stock survive in such a framing? They've not made more than $1 per share any quarter in the last four years, even lost $0.60 a share last quarter and they're now at $284. I'm asking because several members have pointed out a continuing pricing disparity between Apple and any of the other large tech giants.
I don't think the disparity is fair to Apple. However, I don't think Amazon's valuation is right. I think it's way over valued, and over the long term will have to come down.
Amazon is a great company, but ultimately its a business that makes it's money by taking market share and lowering the margins of every business it enters. It's a long term low margin business. I don't think there's going to be some great day in the future for them, when after they've stolen market share from every brick and mortar store on the planet, that they're going to magically up their margins. I hope investors realize this after a couple of quarters of more disappointing earnings.
I don't short stocks, but if I did, I'd short Amazon.