Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.
Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.
I wonder how long it will take Apple to grow into its P/E 8-) It is amazing to me how much negativity is priced into the stock - margins would have to drop in half or more, and revenue growth would have to go to zero for the current price to make sense even a little bit. Even if both of those very unlikely things happened, the valuation of Apple would still be lower than most of the S&P 500.
XOM has very little (relatively) cash on the books (less than $10BN), so if you adjust for the difference, Apple should be about $450BN market cap (everything else being equal, as you suggest), so closer to $500 share price.
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Apple's management has somehow managed to lose investor confidence.
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Actually, at $700, Apple's valuation metrics were not particularly frothy (P/E of around 15, PEG ratio under 1.0), which is why many (most) analysts were setting targets at $800-1000, so I think that it is only "clear that $700 was too high" in so far as it did not stay there. I think that a lot of bitterness over the Apple stock price drop stems from this -- it did NOT seem overvalued at $700.
As for what Apple is doing with the money, I recall looking at this at some point (it is on the 10Q), it was roughly what you would expect: treasuries and high grade corporate debt, with net return of somewhere between 1 and 2 %, so inflation adjusted negative. Actually, one of the reasons why people are unhappy with the Apple cash pile is that it is becoming increasingly clear that the Fed is not going to exit the QE any time soon, and inflation might [of course it might not, but the risk is there] ramp up very quickly, which will make that cash look even sillier.
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Also: no, you are not doubling up the earnings by adding the cash. The relevant earnings are the FUTURE earnings, cash is the product of past earnings. And in any event, notice that XOM earns more money than AAPL, but they have far less cash (presumably because they reinvest a lot of their earnings in the business -- their dividend is about the same as AAPL's in percentage terms.
If you don't understand why Apple is down, then you shouldn't be in the stock market.
Valuations matter, growth matters, dividends matter, etc... Last quarter's profits - don't matter. Stock markets look ahead, not behind.
And stock price is a reflection of value, not performance. Stocks, by their very nature, can't go up forever. A company has a dollar value, and it can never be infinite...
It's clear that most on this forum don't understand...
I happen to agree. Many people here are defending past performance as to why Apple stock is not a dud.
One user even attempted to mock another's statement for the stock's massive fall. Fall from $700 to below $400 is in fact a dud.
Right now, Apple looks like a poor use of money for a variety of reasons:
Apple hasn't released a single new product like since Jobs passed away. It's all been incremental improvements over existing products. In some ways, Apple resembles big Pharm stocks in that they need big, huge game changers every few years to keep their stock up. And when their patents end, their stocks get into trouble.
The rumored Apple TV is likely not to be a real game changer for a couple of reasons. TVs have on average, 7 year replacement schedules. This ALONE creates problems for Apple TV being Tim's savior. Second, to generate the kind of margins that Apple needs, the price has to be enormous, especially after the costs in the deals Apple is trying to cut with providers. Given that right now you can get an awesome TV and hook up a variety of content yourself, will the extra costs be acceptable to the customer merely because it's Apple? I seriously doubt it. And even if they are, 7 years between TVs is not good for Apple.
Smart watch. This I personally think is a dead idea in the water. More people click on obscure Google ads then funded the pebble watch. And how many people do you see every day walking around with their phones in their hands? Why would you use a small screen watch with questionable battery life when you're already glued to your smart phone? And Apple has been losing iPhone users to larger Android devices partially because of the screen sizes. We all may mock the Samsung Note (as I do, what's next, putting a Nexus 7 to your face? Give me a break), but the size DOES appeal to many people. Going the opposite direction with smaller screens and then charging say $199 is a failure waiting to happen. And let's not forget that the generation Apple is pushing for, the youth have been abandoning watches in droves. Plus those in the market to drop that kind of money on a watch do it for status and symbol. Spending $1,000 on an Omega watch isn't primarily for functionality. It's to scream status. One nutter tried to argue that people will wear a $10k rolex on one arm and the Apple Smart Watch on the other. Hello? Learn your market. Right now Google Glass's market is subdued (even when ignoring its price) compared to its potential market and that offers way more than any smart watch can.
What does Apple have left? Selling for iPhones, iPods, iPads and computers. Hence why many analysts see the lack of future blockbusters, massive cash pile and believe that Apple really doesn't have anything in the future to support the kind of stock price it used to.
On top of that, the lack of repurchasing after the typical end of the year stock sale to take your losses and avoid potential higher taxes hasn't come. Apple's stock price took a hit (as many do) during the end of the year for tax reasons. But as the tax increases have been seen and are now know, we should have seen people repurchase after the wash period. It's April. Wash period ended at the latest in Feburary. This suggests that large investors, both individual and insitutitonal are not considering Apple a good buy.
And then there is one of the larger problems that many Apple diehard fans don't get: Supplier behavior. Right now Apple suppliers are searching for buyers from everything from screens to memory. The massive buildups they all made in capital investments are now going fallow as Apple is ordering less and less. There isn't a logical reason to assume good things from reliable Apple suppliers about where Apple sees itself from this. When suppliers start trying to find replacement demand for demand previously absorbed by Apple for a variety of parts on the iPhone and iPad, that suggests Apple itself is cutting its own projected demand.
Opposed to say, hydrocarbons as what XOM is in the business of (and they aren't even that large compared to National Oil Firms like Aramaco), you can go without Apple products. XOM is in a fairly inelastic business where Apple is in a very elastic business. Couple this with product fatigue and a wealth of good alternatives at much lower prices, and you only have the diehard Apple customers left. You can't support a $700 stock price on that.
<div class="quote-container">
<span>Quote:</span>
<div class="quote-block">
Originally Posted by <strong>Marvin</strong> <a href="/t/157037/shares-of-apple-sink-after-supplier-cirrus-warns-of-weak-results/360#post_2313985"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" /></a><br />
<br />
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.<br />
<br />
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.</div>
</div>
<p>
</p>
<p>
A lot of people took their profits and ran, in addition to taking their profits in a lower tax period.</p>
<p>
</p>
<p>
That said, we should see repurchasing after the wash period if those same investors believe Apple is still a good investment. We have not.</p>
<p>
</p>
<p>
I agree with your sentiment that $700 was a too high valuation for what Apple's core business is.</p>
<p>
</p>
<p>
The fact that we don't see growth investors getting in at $400 says it's still overvalued, or at least properly valued. When a stock is under priced, growth investors tend to pile in.</p>
Congratulations on the new meme, it's very becoming on you.
Why? Have you seen their cash position?
Generally, when firms are sitting on that kind of cash, it means that they have nothing good to use it on. Even firms with huge cash piles overseas who do not want to bring it back for taxation find ways to use it. Apple is literally just sitting on it.
@protips. I would quote you posts but they are way too damn long. It's been 1.5 years since Cook took over. That isn't long at all. Jobs didn't announce game-changers every quarter.
I rather Apple sit on the cash rather than spend it carelessly on Moto or Palm or some other crashing company.
All Apple has is the iPhone, iPod, iPad, and Mac. Record sold of the iPhone and iPad. iPod still dominates the shrinking MP3 player market. The Mac is outperforming the other PC vendors.
The desktop stopped selling due to supply constraints. Cook even said that was the case in sept qtr call.
@protips. I would quote you posts but they are way too damn long. It's been 1.5 years since Cook took over. That isn't long at all. Jobs didn't announce game-changers every quarter.
I rather Apple sit on the cash rather than spend it carelessly on Moto or Palm or some other crashing company.
All Apple has is the iPhone, iPod, iPad, and Mac. Record sold of the iPhone and iPad. iPod still dominates the shrinking MP3 player market. The Mac is outperforming the other PC vendors.
The desktop stopped selling due to supply constraints. Cook even said that was the case in sept qtr call.
It's been 6 quarters of essentially nothing new.
I would rather have Apple start issuing big dividends. That will get people back into the stock. A 5% yield? Stock still shoot up. Point still stands that firms with crazy cash reserves have crazy cash reserves because they have nothing better to use the money on. That is bad for future product lines.
You, like many others, are still focusing entirely on the past. Not the future. Record selling numbers of iPads and iPhones is kind of like the movie industry with record sales. It's inflation and population growth. Furthermore, when you look at areas of growth, particularly Asia, Apple is not doing well. And the shrinking MP3 market is, as you stated, shrinking. Can't really grow your way out of a shrinking market. As for outperforming, sure they make more money, but their market share is still so-so. Furthermore, the laptop/desktop portion of Apple's revenues are small. Apple is highly dependent on Mobile for its profits. You could actually stop selling Laptops/desktops and Apple would still make billions.
Considering the market saturation in rich countries and areas like the US and EU, the only real growth areas lie in Asia. And Android is dominating the pants off Apple there. It doesn't take a rocket scientist to figure out that Apple is seriously considering a cheaper iPhone for that reason.
I do agree with people that Apple never should have gotten to $700 in the first place.
Smart watch. This I personally think is a dead idea in the water. More people click on obscure Google ads then funded the pebble watch. And how many people do you see every day walking around with their phones in their hands? Why would you use a small screen watch with questionable battery life when you're already glued to your smart phone? And Apple has been losing iPhone users to larger Android devices partially because of the screen sizes. We all may mock the Samsung Note (as I do, what's next, putting a Nexus 7 to your face? Give me a break), but the size DOES appeal to many people. Going the opposite direction with smaller screens and then charging say $199 is a failure waiting to happen. And let's not forget that the generation Apple is pushing for, the youth have been abandoning watches in droves. Plus those in the market to drop that kind of money on a watch do it for status and symbol. Spending $1,000 on an Omega watch isn't primarily for functionality. It's to scream status. One nutter tried to argue that people will wear a $10k rolex on one arm and the Apple Smart Watch on the other. Hello? Learn your market. Right now Google Glass's market is subdued (even when ignoring its price) compared to its potential market and that offers way more than any smart watch can.
Haha, agreed. I love watches, but I love mechanical watches. The joy of owning a good watch is to show it off, as you said, it's a piece of jewellery, and also to admire the complications, the movements, to know that you're wearing a hand-crafted piece of art that will keep on ticking for the next 100 years. A digital/smart watch just doesn't have the same emotional connection.
I don't see smart watches being any more popular than Casio watches, something for kids and geeks (and maybe the religiously devoted Apple faithful).
Google Glass could be very interesting, especially for navigation and taking video. I do alot of hiking, travelling, playing golf, etc..., and Google Glass offers potentially interesting enhancements to all of those activities. Heck, even just being able to watch stock market feeds and check the news while I'm out for my morning run and workout would be huge.
Also: no, you are not doubling up the earnings by adding the cash. The relevant earnings are the FUTURE earnings, cash is the product of past earnings. And in any event, notice that XOM earns more money than AAPL, but they have far less cash (presumably because they reinvest a lot of their earnings in the business -- their dividend is about the same as AAPL's in percentage terms.
XOM does stock buybacks a lot. If we took away Apple's cash it would reduce earnings by about 3% or so, since they get approximately 1% return on the cash ($1.5 billion per year). I agree that $700 was not frothy - I think that Apple would be fairly priced around $900 personally.
Comments
Quote:
Originally Posted by hill60
Congratulations on the new meme, it's very becoming on you.
And hiding your head in the sand on you (and Tim)
Originally Posted by tkell31
Lol, Cook laughing as Rome burns. Nice post.
Apple, meanwhile, is perfectly fine.
What's wrong with you people?
Quote:
Originally Posted by Tallest Skil
Apple, meanwhile, is perfectly fine.
What's wrong with you people?
Yes, dear. Would you like another glass of Kool Aid now?
Quote:
Originally Posted by Tallest Skil
Apple, meanwhile, is perfectly fine.
What's wrong with you people?
You hope.
Quote:
Originally Posted by e1618978
Microsoft had a p/e ratio of 72 in 1999 during the bubble - to get more detail you need to pay ycharts for the data.
http://ycharts.com/companies/MSFT/pe_ratio
Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.
Originally Posted by island hermit
You hope.
Right, well, we'll see in real time as events unfold.
Quote:
Originally Posted by island hermit
Yes... "during the bubble" it was high... and over the last few years all MSFT has done is to grow into its p/e... the reason the stock price hasn't really moved for over a decade.
I wonder how long it will take Apple to grow into its P/E 8-) It is amazing to me how much negativity is priced into the stock - margins would have to drop in half or more, and revenue growth would have to go to zero for the current price to make sense even a little bit. Even if both of those very unlikely things happened, the valuation of Apple would still be lower than most of the S&P 500.
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Quote:
Originally Posted by Marvin
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Actually, at $700, Apple's valuation metrics were not particularly frothy (P/E of around 15, PEG ratio under 1.0), which is why many (most) analysts were setting targets at $800-1000, so I think that it is only "clear that $700 was too high" in so far as it did not stay there. I think that a lot of bitterness over the Apple stock price drop stems from this -- it did NOT seem overvalued at $700.
As for what Apple is doing with the money, I recall looking at this at some point (it is on the 10Q), it was roughly what you would expect: treasuries and high grade corporate debt, with net return of somewhere between 1 and 2 %, so inflation adjusted negative. Actually, one of the reasons why people are unhappy with the Apple cash pile is that it is becoming increasingly clear that the Fed is not going to exit the QE any time soon, and inflation might [of course it might not, but the risk is there] ramp up very quickly, which will make that cash look even sillier.
Quote:
Originally Posted by Marvin
Surely you'd be doubling up the earnings by adding on the cash. Their cash comes from their net profit. At the very least the net profit from 2012 would be deducted from the cash as this is a calculation on their relative 2012 value, which would put the price at ~$440.
It's not clear how secure that cash pile is either, what is Braeburn Capital doing with the money?
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.
Also: no, you are not doubling up the earnings by adding the cash. The relevant earnings are the FUTURE earnings, cash is the product of past earnings. And in any event, notice that XOM earns more money than AAPL, but they have far less cash (presumably because they reinvest a lot of their earnings in the business -- their dividend is about the same as AAPL's in percentage terms.
Quote:
Originally Posted by Mikeb85
If you don't understand why Apple is down, then you shouldn't be in the stock market.
Valuations matter, growth matters, dividends matter, etc... Last quarter's profits - don't matter. Stock markets look ahead, not behind.
And stock price is a reflection of value, not performance. Stocks, by their very nature, can't go up forever. A company has a dollar value, and it can never be infinite...
It's clear that most on this forum don't understand...
I happen to agree. Many people here are defending past performance as to why Apple stock is not a dud.
One user even attempted to mock another's statement for the stock's massive fall. Fall from $700 to below $400 is in fact a dud.
Right now, Apple looks like a poor use of money for a variety of reasons:
Apple hasn't released a single new product like since Jobs passed away. It's all been incremental improvements over existing products. In some ways, Apple resembles big Pharm stocks in that they need big, huge game changers every few years to keep their stock up. And when their patents end, their stocks get into trouble.
The rumored Apple TV is likely not to be a real game changer for a couple of reasons. TVs have on average, 7 year replacement schedules. This ALONE creates problems for Apple TV being Tim's savior. Second, to generate the kind of margins that Apple needs, the price has to be enormous, especially after the costs in the deals Apple is trying to cut with providers. Given that right now you can get an awesome TV and hook up a variety of content yourself, will the extra costs be acceptable to the customer merely because it's Apple? I seriously doubt it. And even if they are, 7 years between TVs is not good for Apple.
Smart watch. This I personally think is a dead idea in the water. More people click on obscure Google ads then funded the pebble watch. And how many people do you see every day walking around with their phones in their hands? Why would you use a small screen watch with questionable battery life when you're already glued to your smart phone? And Apple has been losing iPhone users to larger Android devices partially because of the screen sizes. We all may mock the Samsung Note (as I do, what's next, putting a Nexus 7 to your face? Give me a break), but the size DOES appeal to many people. Going the opposite direction with smaller screens and then charging say $199 is a failure waiting to happen. And let's not forget that the generation Apple is pushing for, the youth have been abandoning watches in droves. Plus those in the market to drop that kind of money on a watch do it for status and symbol. Spending $1,000 on an Omega watch isn't primarily for functionality. It's to scream status. One nutter tried to argue that people will wear a $10k rolex on one arm and the Apple Smart Watch on the other. Hello? Learn your market. Right now Google Glass's market is subdued (even when ignoring its price) compared to its potential market and that offers way more than any smart watch can.
What does Apple have left? Selling for iPhones, iPods, iPads and computers. Hence why many analysts see the lack of future blockbusters, massive cash pile and believe that Apple really doesn't have anything in the future to support the kind of stock price it used to.
On top of that, the lack of repurchasing after the typical end of the year stock sale to take your losses and avoid potential higher taxes hasn't come. Apple's stock price took a hit (as many do) during the end of the year for tax reasons. But as the tax increases have been seen and are now know, we should have seen people repurchase after the wash period. It's April. Wash period ended at the latest in Feburary. This suggests that large investors, both individual and insitutitonal are not considering Apple a good buy.
And then there is one of the larger problems that many Apple diehard fans don't get: Supplier behavior. Right now Apple suppliers are searching for buyers from everything from screens to memory. The massive buildups they all made in capital investments are now going fallow as Apple is ordering less and less. There isn't a logical reason to assume good things from reliable Apple suppliers about where Apple sees itself from this. When suppliers start trying to find replacement demand for demand previously absorbed by Apple for a variety of parts on the iPhone and iPad, that suggests Apple itself is cutting its own projected demand.
Opposed to say, hydrocarbons as what XOM is in the business of (and they aren't even that large compared to National Oil Firms like Aramaco), you can go without Apple products. XOM is in a fairly inelastic business where Apple is in a very elastic business. Couple this with product fatigue and a wealth of good alternatives at much lower prices, and you only have the diehard Apple customers left. You can't support a $700 stock price on that.
<span>Quote:</span>
<div class="quote-block">
Originally Posted by <strong>Marvin</strong> <a href="/t/157037/shares-of-apple-sink-after-supplier-cirrus-warns-of-weak-results/360#post_2313985"><img alt="View Post" class="inlineimg" src="/img/forum/go_quote.gif" /></a><br />
<br />
Couldn't it just be that a lot of people were in it with the intention of bailing when the price was high and did so when it became obvious it had peaked? In other words, it has just turned away growth investors. That had to happen at some point because I think everyone accepts that Apple couldn't keep growing at the same rate indefinitely. It's also quite clear now that anything around $700 was too high a valuation.<br />
<br />
The problem isn't that it came down but it shouldn't have gone up so high. Apple didn't make it go that high, that was just the market working out what people were willing to pay, which is obvious from how quickly it jumped up.</div>
</div>
<p>
</p>
<p>
A lot of people took their profits and ran, in addition to taking their profits in a lower tax period.</p>
<p>
</p>
<p>
That said, we should see repurchasing after the wash period if those same investors believe Apple is still a good investment. We have not.</p>
<p>
</p>
<p>
I agree with your sentiment that $700 was a too high valuation for what Apple's core business is.</p>
<p>
</p>
<p>
The fact that we don't see growth investors getting in at $400 says it's still overvalued, or at least properly valued. When a stock is under priced, growth investors tend to pile in.</p>
Quote:
Originally Posted by Tallest Skil
Apple, meanwhile, is perfectly fine.
What's wrong with you people?
Why do you believe this?
Apple is losing market share in mobile across the planet, especially in the highest growth markets.
Apple margins are declining.
Apple's performance desktop line is way out of date. They even stopped selling them for a time.
Apple's product lines are now nothing but incremental growth. (If we wanted another Microsoft sans Xbox, we'd buy that)
Apple is playing catchup in a number of markets.
Diehard Apple Fans are switching, including some high profilers in the tech industry:
http://www.techhive.com/article/2030042/why-i-switched-from-iphone-to-android.html
When you look at that list, the calls to fire Tim Cook don't look so crazy after all.
Quote:
Originally Posted by hill60
Congratulations on the new meme, it's very becoming on you.
Why? Have you seen their cash position?
Generally, when firms are sitting on that kind of cash, it means that they have nothing good to use it on. Even firms with huge cash piles overseas who do not want to bring it back for taxation find ways to use it. Apple is literally just sitting on it.
Quote:
Originally Posted by Tallest Skil
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1366492953115&chddm=97359&chls=IntervalBasedLine&q=NASDAQ:AAPL&ntsp=0&ei=AgdzUciuPMqgiAK8Vw
You were saying?
A 52 week 43% decline is pretty horrific.
I rather Apple sit on the cash rather than spend it carelessly on Moto or Palm or some other crashing company.
All Apple has is the iPhone, iPod, iPad, and Mac. Record sold of the iPhone and iPad. iPod still dominates the shrinking MP3 player market. The Mac is outperforming the other PC vendors.
The desktop stopped selling due to supply constraints. Cook even said that was the case in sept qtr call.
Quote:
Originally Posted by jungmark
@protips. I would quote you posts but they are way too damn long. It's been 1.5 years since Cook took over. That isn't long at all. Jobs didn't announce game-changers every quarter.
I rather Apple sit on the cash rather than spend it carelessly on Moto or Palm or some other crashing company.
All Apple has is the iPhone, iPod, iPad, and Mac. Record sold of the iPhone and iPad. iPod still dominates the shrinking MP3 player market. The Mac is outperforming the other PC vendors.
The desktop stopped selling due to supply constraints. Cook even said that was the case in sept qtr call.
It's been 6 quarters of essentially nothing new.
I would rather have Apple start issuing big dividends. That will get people back into the stock. A 5% yield? Stock still shoot up. Point still stands that firms with crazy cash reserves have crazy cash reserves because they have nothing better to use the money on. That is bad for future product lines.
You, like many others, are still focusing entirely on the past. Not the future. Record selling numbers of iPads and iPhones is kind of like the movie industry with record sales. It's inflation and population growth. Furthermore, when you look at areas of growth, particularly Asia, Apple is not doing well. And the shrinking MP3 market is, as you stated, shrinking. Can't really grow your way out of a shrinking market. As for outperforming, sure they make more money, but their market share is still so-so. Furthermore, the laptop/desktop portion of Apple's revenues are small. Apple is highly dependent on Mobile for its profits. You could actually stop selling Laptops/desktops and Apple would still make billions.
Considering the market saturation in rich countries and areas like the US and EU, the only real growth areas lie in Asia. And Android is dominating the pants off Apple there. It doesn't take a rocket scientist to figure out that Apple is seriously considering a cheaper iPhone for that reason.
I do agree with people that Apple never should have gotten to $700 in the first place.
Quote:
Originally Posted by protips
Smart watch. This I personally think is a dead idea in the water. More people click on obscure Google ads then funded the pebble watch. And how many people do you see every day walking around with their phones in their hands? Why would you use a small screen watch with questionable battery life when you're already glued to your smart phone? And Apple has been losing iPhone users to larger Android devices partially because of the screen sizes. We all may mock the Samsung Note (as I do, what's next, putting a Nexus 7 to your face? Give me a break), but the size DOES appeal to many people. Going the opposite direction with smaller screens and then charging say $199 is a failure waiting to happen. And let's not forget that the generation Apple is pushing for, the youth have been abandoning watches in droves. Plus those in the market to drop that kind of money on a watch do it for status and symbol. Spending $1,000 on an Omega watch isn't primarily for functionality. It's to scream status. One nutter tried to argue that people will wear a $10k rolex on one arm and the Apple Smart Watch on the other. Hello? Learn your market. Right now Google Glass's market is subdued (even when ignoring its price) compared to its potential market and that offers way more than any smart watch can.
Haha, agreed. I love watches, but I love mechanical watches. The joy of owning a good watch is to show it off, as you said, it's a piece of jewellery, and also to admire the complications, the movements, to know that you're wearing a hand-crafted piece of art that will keep on ticking for the next 100 years. A digital/smart watch just doesn't have the same emotional connection.
I don't see smart watches being any more popular than Casio watches, something for kids and geeks (and maybe the religiously devoted Apple faithful).
Google Glass could be very interesting, especially for navigation and taking video. I do alot of hiking, travelling, playing golf, etc..., and Google Glass offers potentially interesting enhancements to all of those activities. Heck, even just being able to watch stock market feeds and check the news while I'm out for my morning run and workout would be huge.
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Originally Posted by igriv
Also: no, you are not doubling up the earnings by adding the cash. The relevant earnings are the FUTURE earnings, cash is the product of past earnings. And in any event, notice that XOM earns more money than AAPL, but they have far less cash (presumably because they reinvest a lot of their earnings in the business -- their dividend is about the same as AAPL's in percentage terms.
XOM does stock buybacks a lot. If we took away Apple's cash it would reduce earnings by about 3% or so, since they get approximately 1% return on the cash ($1.5 billion per year). I agree that $700 was not frothy - I think that Apple would be fairly priced around $900 personally.