Its P/E is like 9.5. At $700 it would be around 16.5. There's nothing crazy about that. Microsoft is sitting at almost 18 p/e. Unless you think Apple is the next blackberry and will lose their entire customer base you should be buying!
Exxon's P/E is even lower though and their stock price hasn't gone higher than it was 6 years ago (their P/E was around the same back then). Amazon's P/E is over 3,000 (was over 100 back then):
but their stock price went up 3x in the same period. If you just look at ratios and figure out company value from that, you're just going to get landed with stock that changes very little and be complaining the whole time.
Ultimately, the value that AAPL is trading at is going to have to be based on how traders perceive the future profitability of the company. The only way for it to go up is if Apple somehow increases earnings considerably or rather does something that makes traders think their profitability will go up. There isn't an easy way for them to do that because they already sustain the best margins in the whole industry.
Amazon makes a lot of revenue and has a strong infrastructure so some think that means that if they just fiddle with the margins, it'll be worthwhile owning.
The question to answer would be what do you think Apple will do in a few years that will make them more profitable than they are today? If your answer is that they'll come out with the next big thing and you don't know what it is yet then you're probably better off not buying the stock now. You need to have a more certain answer than that. The mobile phone market was the biggest market and it's done. The tablet is second for the simple reason that fewer people need a tablet than they need a phone and they typically aren't subsidized with subscriptions.
The tablet market is likely to be similar to the PC market of 350m units per year and Apple will probably be at around 80 million this year. If you assume they'll maintain 50% marketshare, they can grow the iPad units by double to match the iPhone units until it saturates and that can increase company profitability around 20%. Their margins dropped quite a lot already.
I think the best way to look at Apple now is as an industry giant like Microsoft, not as a startup. Microsoft is not likely to do anything new for the reason that they wouldn't know what to do if it smacked them in the face. I think Apple isn't likely to do anything new that's major for the reason that there's nothing major left for them to do. They put a multi-touch unix OS in my pocket, there is no other place on my person they can put a unix OS that would benefit me more.
If the price tops $500, it's still worthwhile for some people buying around $400 but it depends on what growth rate people want. I think some people are waiting for another growth explosion like the iPhone brought about without thinking about what other product has a potential market of 1 billion units a year that allows a unit price of $500+.
Of course, if they did come out with a new product like a TV, that might fool investors for a short time but it would crash down again once they saw the shipment volumes.
Absolutely none of these links provide any insight into how many shares of apple stock the company has bought back!
That's fine I will never spend time researching a question for you again. In fact, your on my ignore list. Ungrateful little ...... <img alt="irked.gif" id="user_yui_3_10_0_1_1372456736017_1360" src="http://forums-files.appleinsider.com/images/smilies/irked.gif" style="line-height:1.231;" name="user_yui_3_10_0_1_1372456736017_1360">
It doesn't look like they've done a huge buyback yet. They still have 940m outstanding shares. I'm sure Tim said they'd done $10b already. The above article concerning Buffet said:
"per an April filing with the SEC, the first 4 million shares of Apple stock that were bought back were bought at an average price of $478"
That's only $2b. I think their outstanding shares were around 946m at one point. The number should eventually fall to ~790m outstanding.
"As previously announced back in March 2012, Apple has now (Oct 2012) launched its plan to buy back some $10 billion in stock as a way to offset the shares it has awarded to executives and senior personnel. The purchase plan spans three years and, although technically underway, is controlled by the discretion of the board, which will determine the best times in the coming 36 months in which to buy stock and in what quantities."
They increased the buyback to $60b this year.
It might seem counter-intuitive but what would be best for remaining stockholders is to try and drive the price as low as possible for the buyback because Apple will be buying shares back below their intrinsic value and they'll be able to buy back more of them, which will further increase the value of the remaining shares... so, do we think Apple is doomed? Samsung seems to be doing alright. Hey, maybe Windows tablets will take off. Oh, and Google might be doing a games console - that's some trouble for Apple right there. Apple hasn't even said they're going to do that but Google is rumoured to be planning to out-innovate the rumour of Apple's plans by doing it first (and thereby copying them, in advance. It's know as anticipatory plagiarism). Yeah, everyone who's not in on this scheme should totally sell.
Oh, and Google might be doing a games console - that's some trouble for Apple right there. Apple hasn't even said they're going to do that but Google is rumoured to be planning to out-innovate the rumour of Apple's plans by doing it first (and thereby copying them, in advance. It's know as anticipatory plagiarism). Yeah, everyone who's not in on this scheme should totally sell.
Considering there's already an Android game console on the market (Ouya), I think it's safe to say if Google is copying anyone, it's not Apple. You can also build your own, with an Android TV box and Xbox controller (yes it works!).
Its P/E is like 9.5. At $700 it would be around 16.5. There's nothing crazy about that. Microsoft is sitting at almost 18 p/e. Unless you think Apple is the next blackberry and will lose their entire customer base you should be buying!
A P/E of 9.5 is about average for a 'mature' company. Nothing crazy about it.
If Microsoft eliminatedtheir dividend, their P/E would drop like a rock to ~6... Right now their value is bolstered by their very generous dividend payout.
Considering there's already an Android game console on the market (Ouya), I think it's safe to say if Google is copying anyone, it's not Apple. You can also build your own, with an Android TV box and Xbox controller (yes it works!).
I'm certain there was sarcasm in his post. You responded to one of the few people on here with a sense of humor.
aapl is a dog. P/E ratios, market cap and margins don't mean shit.
If you purchased $5,000 worth of aapl and amzn at the beginning of 2013, today, July 11th, your aapl stock would be worth $3,888 (22% loss), your amzn would be $5817 (16% gain).
There are plenty of other stocks that will give you much better returns.
Using the same scenario as above, if you bought tsla, it would be worth $17,857. scty, $17,916. Both over 255% gains. spwr $20,833 with 316% gains.
All of these are young, growing companies, considered the best in their fields.
At today's price $427, how high does aapl have to go to get you 250% gains? $1494. What's the likelihood of that ever happening and how long would it take? It took just 7 months for those other stocks.
So why are you still holding aapl? $3.05 dividend every 3 months? That's a sucker bet.
aapl is a dog. P/E ratios, market cap and margins don't mean shit.
If you purchased $5,000 worth of aapl and amzn at the beginning of 2013, today, July 11th, your aapl stock would be worth $3,888 (22% loss), your amzn would be $5817 (16% gain).
There are plenty of other stocks that will give you much better returns.
Using the same scenario as above, if you bought tsla, it would be worth $17,857. scty, $17,916. Both over 255% gains. spwr $20,833 with 316% gains.
All of these are young, growing companies, considered the best in their fields.
At today's price $427, how high does aapl have to go to get you 250% gains? $1494. What's the likelihood of that ever happening and how long would it take? It took just 7 months for those other stocks.
So why are you still holding aapl? $3.05 dividend every 3 months? That's a sucker bet.
If you buy TSLA you're not going to be getting 255% gains any time soon. Their run up was because of short sellers covering combined with some buying after their recent good news. They're overvalued though - right now Tesla has around the same market cap as Tata Motors - a company which is among the most successful Indian car companies, and also owns Jaguar/Land Rover.
You can't just look at past gains to determine future gains. Personally, I'm not particularly bullish on AAPL or TSLA, not short term anyway. TSLA has had its short term run, it'll likely move sideways or slightly down for the immediate future. AAPL needs some sort of catalyst, or it will stay range bound for awhile.
The truth is, you can make money or lose money on any stock, short or long. It's all about timing and patience, and an understanding of supply/demand dynamics. Also, brass balls...
I am doing a value pitch presentation on Apple next week. Do you guys know if there are any presentations that has been done recently (by hedge funds or by the company) that I can use to bounce some ideas off?
Comments
Absolutely none of these links provide any insight into how many shares of apple stock the company has bought back!
Exxon's P/E is even lower though and their stock price hasn't gone higher than it was 6 years ago (their P/E was around the same back then). Amazon's P/E is over 3,000 (was over 100 back then):
http://www.thestreet.com/story/11808032/1/amazons-pe-of-3000-the-ultimate-buy-signal.html
but their stock price went up 3x in the same period. If you just look at ratios and figure out company value from that, you're just going to get landed with stock that changes very little and be complaining the whole time.
Ultimately, the value that AAPL is trading at is going to have to be based on how traders perceive the future profitability of the company. The only way for it to go up is if Apple somehow increases earnings considerably or rather does something that makes traders think their profitability will go up. There isn't an easy way for them to do that because they already sustain the best margins in the whole industry.
Amazon makes a lot of revenue and has a strong infrastructure so some think that means that if they just fiddle with the margins, it'll be worthwhile owning.
The question to answer would be what do you think Apple will do in a few years that will make them more profitable than they are today? If your answer is that they'll come out with the next big thing and you don't know what it is yet then you're probably better off not buying the stock now. You need to have a more certain answer than that. The mobile phone market was the biggest market and it's done. The tablet is second for the simple reason that fewer people need a tablet than they need a phone and they typically aren't subsidized with subscriptions.
The tablet market is likely to be similar to the PC market of 350m units per year and Apple will probably be at around 80 million this year. If you assume they'll maintain 50% marketshare, they can grow the iPad units by double to match the iPhone units until it saturates and that can increase company profitability around 20%. Their margins dropped quite a lot already.
I think the best way to look at Apple now is as an industry giant like Microsoft, not as a startup. Microsoft is not likely to do anything new for the reason that they wouldn't know what to do if it smacked them in the face. I think Apple isn't likely to do anything new that's major for the reason that there's nothing major left for them to do. They put a multi-touch unix OS in my pocket, there is no other place on my person they can put a unix OS that would benefit me more.
If the price tops $500, it's still worthwhile for some people buying around $400 but it depends on what growth rate people want. I think some people are waiting for another growth explosion like the iPhone brought about without thinking about what other product has a potential market of 1 billion units a year that allows a unit price of $500+.
Of course, if they did come out with a new product like a TV, that might fool investors for a short time but it would crash down again once they saw the shipment volumes.
Quote:
Originally Posted by skleiniv
Absolutely none of these links provide any insight into how many shares of apple stock the company has bought back!
That's fine I will never spend time researching a question for you again. In fact, your on my ignore list. Ungrateful little ......
It doesn't look like they've done a huge buyback yet. They still have 940m outstanding shares. I'm sure Tim said they'd done $10b already. The above article concerning Buffet said:
"per an April filing with the SEC, the first 4 million shares of Apple stock that were bought back were bought at an average price of $478"
That's only $2b. I think their outstanding shares were around 946m at one point. The number should eventually fall to ~790m outstanding.
http://www.macnn.com/articles/12/10/02/offsets.shares.given.to.employees.in.lieu.of.cash/
"As previously announced back in March 2012, Apple has now (Oct 2012) launched its plan to buy back some $10 billion in stock as a way to offset the shares it has awarded to executives and senior personnel. The purchase plan spans three years and, although technically underway, is controlled by the discretion of the board, which will determine the best times in the coming 36 months in which to buy stock and in what quantities."
They increased the buyback to $60b this year.
It might seem counter-intuitive but what would be best for remaining stockholders is to try and drive the price as low as possible for the buyback because Apple will be buying shares back below their intrinsic value and they'll be able to buy back more of them, which will further increase the value of the remaining shares... so, do we think Apple is doomed? Samsung seems to be doing alright. Hey, maybe Windows tablets will take off. Oh, and Google might be doing a games console - that's some trouble for Apple right there. Apple hasn't even said they're going to do that but Google is rumoured to be planning to out-innovate the rumour of Apple's plans by doing it first (and thereby copying them, in advance. It's know as anticipatory plagiarism). Yeah, everyone who's not in on this scheme should totally sell.
Quote:
Originally Posted by Marvin
Oh, and Google might be doing a games console - that's some trouble for Apple right there. Apple hasn't even said they're going to do that but Google is rumoured to be planning to out-innovate the rumour of Apple's plans by doing it first (and thereby copying them, in advance. It's know as anticipatory plagiarism). Yeah, everyone who's not in on this scheme should totally sell.
Considering there's already an Android game console on the market (Ouya), I think it's safe to say if Google is copying anyone, it's not Apple. You can also build your own, with an Android TV box and Xbox controller (yes it works!).
Quote:
Originally Posted by paladyr
Its P/E is like 9.5. At $700 it would be around 16.5. There's nothing crazy about that. Microsoft is sitting at almost 18 p/e. Unless you think Apple is the next blackberry and will lose their entire customer base you should be buying!
A P/E of 9.5 is about average for a 'mature' company. Nothing crazy about it.
If Microsoft eliminated their dividend, their P/E would drop like a rock to ~6... Right now their value is bolstered by their very generous dividend payout.
Quote:
Originally Posted by Mikeb85
Considering there's already an Android game console on the market (Ouya), I think it's safe to say if Google is copying anyone, it's not Apple. You can also build your own, with an Android TV box and Xbox controller (yes it works!).
I'm certain there was sarcasm in his post. You responded to one of the few people on here with a sense of humor.
Quote:
Originally Posted by hmm
I'm certain there was sarcasm in his post. You responded to one of the few people on here with a sense of humor.
Yes, my bad... Not used to that around here.
If you purchased $5,000 worth of aapl and amzn at the beginning of 2013, today, July 11th, your aapl stock would be worth $3,888 (22% loss), your amzn would be $5817 (16% gain).
There are plenty of other stocks that will give you much better returns.
Using the same scenario as above, if you bought tsla, it would be worth $17,857. scty, $17,916. Both over 255% gains. spwr $20,833 with 316% gains.
All of these are young, growing companies, considered the best in their fields.
At today's price $427, how high does aapl have to go to get you 250% gains? $1494.
What's the likelihood of that ever happening and how long would it take? It took just 7 months for those other stocks.
So why are you still holding aapl? $3.05 dividend every 3 months? That's a sucker bet.
Quote:
Originally Posted by Russell
aapl is a dog. P/E ratios, market cap and margins don't mean shit.
If you purchased $5,000 worth of aapl and amzn at the beginning of 2013, today, July 11th, your aapl stock would be worth $3,888 (22% loss), your amzn would be $5817 (16% gain).
There are plenty of other stocks that will give you much better returns.
Using the same scenario as above, if you bought tsla, it would be worth $17,857. scty, $17,916. Both over 255% gains. spwr $20,833 with 316% gains.
All of these are young, growing companies, considered the best in their fields.
At today's price $427, how high does aapl have to go to get you 250% gains? $1494. What's the likelihood of that ever happening and how long would it take? It took just 7 months for those other stocks.
So why are you still holding aapl? $3.05 dividend every 3 months? That's a sucker bet.
If you buy TSLA you're not going to be getting 255% gains any time soon. Their run up was because of short sellers covering combined with some buying after their recent good news. They're overvalued though - right now Tesla has around the same market cap as Tata Motors - a company which is among the most successful Indian car companies, and also owns Jaguar/Land Rover.
You can't just look at past gains to determine future gains. Personally, I'm not particularly bullish on AAPL or TSLA, not short term anyway. TSLA has had its short term run, it'll likely move sideways or slightly down for the immediate future. AAPL needs some sort of catalyst, or it will stay range bound for awhile.
The truth is, you can make money or lose money on any stock, short or long. It's all about timing and patience, and an understanding of supply/demand dynamics. Also, brass balls...
You do realize that just because a device runs Android doesn't necessarily mean it's owned by Google, right.
Hi All,
I am doing a value pitch presentation on Apple next week. Do you guys know if there are any presentations that has been done recently (by hedge funds or by the company) that I can use to bounce some ideas off?
Thanks!
Quote:
Originally Posted by Relic
You do realize that just because a device runs Android doesn't necessarily mean it's owned by Google, right.
No, I thought Google owns the world. Since I'm visiting this website in Chrome, Google owns my ThinkPad too... They own the Linux kernel too, right?