Apple announces 7-for-1 stock split, buybacks bumped to $90 billion

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  • Reply 121 of 188
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by sog35 View Post

    Amazon has a PE of 570.


     

    Well, that’s better than the 5,300 it used to be. :p

  • Reply 122 of 188
    SpamSandwichSpamSandwich Posts: 31,317member
    sog35 wrote: »
    Amazon has a PE of 570.

    Are you telling me that based on what they will do in the next 12 months?

    I'm not saying the PE is not calculated using 12 month earnings and Price.  I'm saying the actual stock price (a component of the PE ratio) is based on 2 or 3 years or even more of growth.

    Amazon's PE ratio of 570 is not justified with what they will do in the next 12 months but rather the next 5 - 10 years.

    So if you look at Apple growing at 8% for the next 3 years that would justify a stock price going up by 30%

    I remember reading somewhere that Bezos used to work on Wall Street. I think Amazon is the perfect Wall Street scam.
  • Reply 123 of 188
    eric38eric38 Posts: 100member
    sog35 wrote: »
    Amazon has a PE of 570.

    Are you telling me that based on what they will do in the next 12 months?

    I'm not saying the PE is not calculated using 12 month earnings and Price.  I'm saying the actual stock price (a component of the PE ratio) is based on 2 or 3 years or even more of growth.

    Amazon's PE ratio of 570 is not justified with what they will do in the next 12 months but rather the next 5 - 10 years.

    So if you look at Apple growing at 8% for the next 3 years that would justify a stock price going up by 30%

    PE is price to earnings ratio. It's the stock price divided by the company's yearly earnings (earnings per share). Conceivably a stock could have a PE of 1000, if their earnings are projected to increase dramatically. Or a company can have a PE of 1 if they are on the verge of bankruptcy. Or if a company has losses over a fiscal year, they are not assigned a PE. Apple's forward PE is 7. I believe the average forward PE in the s&P is around 15. Take that for what it's worth. The Law of Large Numbers is what kills Apple's valuation, and this will always be the case. Apple will never have a PE above 15 again.
  • Reply 124 of 188
    eric38eric38 Posts: 100member
    Does anyone know the implications the stock-split will have on short-sellers. I read a few years ago that the large share price makes it easier for the billionaires to short Apple with impunity, and that a split would help investors in this regard. Any WallStreet types out there?
  • Reply 125 of 188
    hill60hill60 Posts: 6,992member
    Quote:

    Originally Posted by drblank View Post

     

    Yeah, that's after-hours trading right after the announcement.  We'll see where the stock is at on the day they actually perform the split.  It's common to have large increases right after the announcement and then see a normal price after people have come down off their cloud and more into REALITY.



    Let's look at IPhone sales.  I read last year that they finally reached a daily production of 500,000 phones a day.  I don't know if that was TOTAL or just Foxconn.  Now, if they are at 45 Mill phones a quarter, how can they get much higher in unit sales per year if they don't increase production?  if you look at their quarterly units shipped they've been hovering between 31 Million to as high as 51 Million units shipped for a 12 month total of 159+ over the past 12 months.  Obviously at the end of the quarter they have so much in inventory carrying over, but they are supposedly at 180 Million units a year which is less than a 20% increase if they actually hit 180 Million units over the next 12 months.  Personally, I firmly believe they have to crank out the iPhone 6 in June, and then refresh the 5S, 5C, etc. in Sept and between all of these, if they don't have massive production issues, they MIGHT be able to actually hit 60 Million instead of only 51 Million they did last Christmas, which is only a 20% increase, but hopefully the slower quarters might start hitting in the 40+ Million range rather than low 30 Million range.  To drop all of their new products at then of the year is dangerous for Apple and they need to spread out product introductions in the iPhones and maybe even the iPads so they don't always run into lots of spillover because of production problems.  They've done this two years in a row and it's frustrating when they do it.  I think 45 Million in a quarter needs to be their NEW low and 60 Million in a quarter, needs to be their new high and that will help them get to $700 a share much easier and then they need to raise that bar again and again.  Due to bigger markets opening up, and more screen size choices, I think they can, but building more production  and getting components is a key issue.


     

    $567.77 ding ding

  • Reply 126 of 188
    SpamSandwichSpamSandwich Posts: 31,317member
    "Dr. Blank" has been Dr. Blocked for some time for me.
  • Reply 127 of 188
    drblankdrblank Posts: 3,383member
    Quote:

    Originally Posted by sog35 View Post

     

     

    Amazon has a PE of 570.

     

    Are you telling me that based on what they will do in the next 12 months?

     

    I'm not saying the PE is not calculated using 12 month earnings and Price.  I'm saying the actual stock price (a component of the PE ratio) is based on 2 or 3 years or even more of growth.

     

    Amazon's PE ratio of 570 is not justified with what they will do in the next 12 months but rather the next 5 - 10 years.

     

    So if you look at Apple growing at 8% for the next 3 years that would justify a stock price going up by 30%


    No, it's based on WHAT THEY DID IN THE LAST 12 MONTHS.  As you can plainly see, they hardly make any earnings and the price is rather high in comparison, and for most NORMAL people,t his would be GROSSLY overvalued, but for some reason, people think that this is great stock buy because it always trades at a very high P/E, but I personally wouldn't risk investing in this stock at that high of a P/E ratio.  When the .com thing started, there were a LOT of companies that were trading at excessively high P/E ratio because people just wanted to get into internet companies trying to see which is going to be the next big thing.  As a result of too much over buying of loser stocks and companies that flopped, we had that big market correction and some of these companies went back down to more reasonable P/E ratios.  For some STUPID reason, this is one that STILL has a rather high P/E ratio, but it used to be MUCH higher.

     

    Apple's earnings have done about 15 to 20% over the past year, so assumptions are over the next year, the stock will go up around 15 to 20% which is why a lot of analysts put in about $600 a share (pre split), but they haven't updated those numbers as they only do that only once in a while, and you have to check Yahoo! or whatever to see if they've changed it.  Sometimes they change it every quarter or maybe once a year, so you have to see when they do it for a specific company. 

     

    Now, if Apple can show more growth because they are entering new product categories in high growth market, A la the SmartTV market, they might increase their earnings beyond 20% and that might change the outlook, but unit they give guidance of that, the analysts will stick with what they know to be a more closer expatiation of what to expect.  Obviously, most analysts like to be kind of conservative since they don't want to advise someone that stock is going 30% when there aren't any indications of that, as it pisses investors off if they are grossly out of whack to reality.

     

    The market is something you can't always put in a little box and make generalizations, as each company has to be evaluated by itself and against the same like industry.  A lot of people make the mistake of comparing Apple to Google and Microsoft, but the truth is that these three companies compete in the OS wars, but they are listed with the SEC in three entirely different categories and they really shouldn't compare them to one another since they derive their revenues on completely different models.  Apple is a Personal Computer company, Google is internet Services, and Microsoft is software.  

     

    I hope this helps.  So, just compare one stock by its historical data, look what kinds of trends in the share price, earnings, listen to what the company gives as it's challenges, etc. during these conference calls and see if you can pick up on how well the company will really do and it you think that it's going to outperform and do well, then it might.  But it takes a LONG time to get the knack of this stuff.  I started reading Stock market info and Annual Reports of companies, read books, asked questions, I was addicted CNBC and Financial News Network and other places as well as getting a degree in Finance.  So, it's taken a LONG time, and I still learn new things.  I do, however, like to listen to Cramer, he's actually pretty good MOST of the time, sometimes he's not, but most of the time I think he's pretty good.  He actually gave proof on one of the market collapses before it happened and I didn't want to believe him, but it came true.   He downgraded Apple for a short period of time and then identified the best time to reinvest and he was right on target.  He actually has liked Apple for a long time, but he kind of knows when to get in and when not to .   He's obnoxious to listen to for long periods of time, but he is good to listen to in order to pick things up about how to look at different stocks that don't fit the normal mold.

  • Reply 128 of 188
    tinktink Posts: 395member
    $3.29 per share %u2026 prior to split, so $0.47 post split correct?
  • Reply 129 of 188
    drblankdrblank Posts: 3,383member
    Quote:

    Originally Posted by Eric38 View Post





    On a conference call, it is imperative to proudly exclaim your accomplishments. 700m+ c.c.'s on file is something no other company can come close to. What other company even has 100m? Who cares if it grows even 1% yoy? That's 8 million additional users. You have take consider that 800m relative to every other # in the history of the world. It's staggering, not fluff.



    Ios in the car will be huge. You could write a book about why it's imperative for their business model to succeed. There is a reason why 100% of car mfgrs will offer it within 3 years. If they don't, their sales will be had by a competitor. Granted, they won't make huge numbers off iOS in the car, but they will make huge profits selling iPhones and iPads and Iwatches.



    Apple's ecosystem exists to sell hardware, not to generate insane profits. The lion's share of profits come from hardware sales. I think payments will eventually account for 15% of Apple's profits...down the road.



    I agree with your thoughts about the subscription service. But ultimately, I could care less. I go to my Netflix and Prime app if I want to stream old movies. I don't like spending the 20% Apple premium, compared to Amazon, on rentals and purchases of digital content, but I overcome that by buying $100 iTunes cards on sale for $75 on ebay once a year. Although, I've noticed recently their prices are more in line with Amazon's.

    What's more important to me is how much is the average person buying and is that average going up, down, or staying the same.  Facebook has 1 Billion active users, but they don't make $hit.  I like hard number that I can quantify the buying potential moving forward as the number of active users is fluff, I can't derive any earnings from it.  Now if they said at the beginning of the quarter they averaged $500 a user in purchases and at the end of the quarter, they average $550, and I had some history on the average per year purchases, then I can then look at some trends and make some better assumptions.  ITunes, net profits is NOT a huge money maker due to how much they actually make.  IF they have 800 Million accounts, but only 10% are active, then means something different. Seriously, they need to give more numbers to help people that run numbers to generate better predictability on future earnings.

     

    Well, they need to cut their overhead somehow so they don't have to be the premium player.   I think if Apple can replace Akamai (I like Akamai by the way) and cut some of their overhead costs by doing the same thing, only cheaper, that would be better.



    I've looked at Amazon only briefly on how they price things and they have, what I would consider, a VERY screwy way of determining their price to the consumer.  I've purchased products from them where they had the product actually listed above MSRP and they make it SEEM like you're getting a discount, but you weren't.  You have to be careful with them.

     

    I never liked their stock because of the excessively high P/E ratio, but I do use their services quite often.

  • Reply 130 of 188
    SpamSandwichSpamSandwich Posts: 31,317member
    tink wrote: »
    $3.29 per share %u2026 prior to split, so $0.47 post split correct?

    Not necessarily. $3.29 applies this time. It could be more or less after the split.
  • Reply 131 of 188
    Quote:

    Originally Posted by drblank View Post

     

    Yeah, the dollar value is the same when they conduct the split from that specific time period, but when it goes up by $1 a share he'll have it go up $210 instead of $30 and he'll probably get more dividends each quarter.  If it goes down by $1 it goes down more, but hopefully in the long run you'll be better off as long as Apple doesn't pull a Zune, Surface, Windows 8/8.1 type of mistakes, which I doubt they will.


     

    ... but if the share price goes up 10% or down 10%, it's exactly the same thing on your total balance, pre-split or post-split.

  • Reply 132 of 188
    drblankdrblank Posts: 3,383member
    Quote:

    Originally Posted by hill60 View Post

     

     

    $567.77 ding ding


     

    Wait until the stock actually splits and let's see what the price is then.  This is just going up because of the outrageous news, but there is a lot of hype, misinformation and people get into these buying frenzy and then someone figures it out and dumps stock to push it down so they can buy it back at a low point.  What out for large ups and downs in a stock price.  What goes up, does come down, just be aware of it so you get all depressed because it did what you didn't want it to do.

  • Reply 133 of 188
    drblankdrblank Posts: 3,383member
    Quote:

    Originally Posted by SpamSandwich View Post



    "Dr. Blank" has been Dr. Blocked for some time for me.

     

    And? Who are you? Well, maybe I should just block you for now on, so we are even.  That works for me!

  • Reply 134 of 188
    drblankdrblank Posts: 3,383member
    Quote:

    Originally Posted by island hermit View Post

     

     

    ... but if the share price goes up 10% or down 10%, it's exactly the same thing on your total balance, pre-split or post-split.


    Stock splits are great if the company is in high growth and you are a long term holding on to the stock a good 5, 10, 15 years.  I did that with Microsoft back in 86 when they went public.  I didn't have much money, but I invested a few thousand, I didn't touch the stock for at least 10 years and that stock was 2/1 splits about every year to year 1/2 and I ended up making a LOT of money from that small investment. And I ended up selling enough to recoup my original investment so I knew I at least got my initial investment back and the rest was pure profit.  I don't recall how much I ended making in total but between the year's 86 through about 2001 when I saw the company peaking, I think I probably made a good $150K on about $3,500 investment.  Not bad if you ask me, I wish I invested more at the time, but I wasn't wealthy enough to put in a good $50K or so, which would make me a millionaire several times over.  Some investors are short term players and some are long term players. So, in the end it almost doesn't matter ultimately as what matters how much did you invest, what was your annual rate of return and did you make a tidy profit.  A lot of people get wrapped up in this stock split frenzy and sometimes they make a mistake and overpay and the stock doesn't do much afterwards.  I've seen that happen before.    But I think Apple is safe in terms of making over the long term about 15 to 20% annual rate of return over the long haul.



    Some people are going into other growth areas like 3D printing, but you have to watch some of those companies carefully to see their stock trends to get in at a low point and get out at a high point or just hang on for a long period of time.

     

    Some other stocks have actually done well over the past couple of years, but I will caution you, there have been several experts that have been discussing a huge stock market correction. When it will happen is up in the air, they disagree on that, but they are pointing out signs of it, so be aware of that. 



    Remember, buy low, sell high.  That's all I have to say about that.

  • Reply 135 of 188
    Quote:
    Originally Posted by drblank View Post

     

    Some other stocks have actually done well over the past couple of years, but I will caution you, there have been several experts that have been discussing a huge stock market correction. When it will happen is up in the air, they disagree on that, but they are pointing out signs of it, so be aware of that. 


     

    Oh, the correction is coming... no doubt. I'm guessing it could even be sometime this year.

     

    The thing is... AAPL will be crushed along with everything else... but the crushing of AAPL will be nothing in comparison to AMZN, GOOG, TSLA etc.

  • Reply 136 of 188
    jungmarkjungmark Posts: 6,709member
    "Dr. Blank" has been Dr. Blocked for some time for me.

    You Odo'd him?
  • Reply 137 of 188
    drblankdrblank Posts: 3,383member
    Quote:
    Originally Posted by island hermit View Post

     

     

    Oh, the correction is coming... no doubt. I'm guessing it could even be sometime this year.

     

    The thing is... AAPL will be crushed along with everything else... but the crushing of AAPL will be nothing in comparison to AMZN, GOOG, TSLA etc.


    Actually for the most part, Apple did pretty well even though there was a market correction.  For a period they were actually more immune to it, I don't know how much they are now, but it is something to be aware of definitely.

     

    I personally always liked long term companies, but the good thing about Apple is the higher dividends.  Personally, if I owned shares, I would probably just do dividend reinvestments and hang on to it for 10 years or so.  There's nothing wrong with a company making 15 to 20% annual interest rate and paying dividends if that's how Apple is going to continue for the next 10 years,   it's a HELL of a lot better than most companies.  But the days of seeing Apple have 35 to 70% annual growth rate is over, at least until they make some great announcement that would equate into some serious gross revenues and net profits.  I know iTunes wasn't originally to make money, but if it only makes 5% Net profit margin, that does drag down the rest of the company and they really need to do something about it.  The only way I can see it is by cutting their overhead wherever they can without disrupting the service.  I think going to 24 bit will help and they've openly had information leading people that it was eventually going to 24bit AAC files, it's just a matter of when, etc.  but I think this goes about about 2 years when there first was discussion from them on their Mastering For iTunes software.  Hopefully they'll do it sooner and it will be done well from the start.

     

    I was thinking, maybe Apple could restructure iTunes as a separate privately held company where it didn't drag down the rest of the companies' profit margins, but from the customer's standpoint it was transparent.    That would help drive higher annual earnings growth rate while still offering the same service.  They could just run it as a privately held company that simply existed for the sole purpose of helping drive more hard ware sales, but not negatively impact the margins.   I would be interested  to see if Apple could actually do that.  Kind of like structure them almost like Filemaker/Claris.

  • Reply 138 of 188
    drblankdrblank Posts: 3,383member
    sog35 wrote: »
    Man you are clueless.

    Apple did not have even close to 15% eps growth the last 3 quarters before this quarter.
    sog35 wrote: »
    Man you are clueless.

    Apple did not have even close to 15% eps growth the last 3 quarters before this quarter.

    sog35 wrote: »
    Man you are clueless.

    Apple did not have even close to 15% eps growth the last 3 quarters before this quarter.

    Did you calculate that the same way you calculate everything else? Looking 2 to 3 years in the future?

    Please stop replying.
  • Reply 139 of 188
    drblankdrblank Posts: 3,383member
    drblank wrote: »


    Did you calculate that the same way you calculate everything else? Looking 2 to 3 years in the future?

    Please stop replying.

    I just blocked you, you are wasting my time. Unless you want to pay me money to teach you something, please don't waste my time. And make sure you do all of your calculations for 2 to 3 years into the future.
  • Reply 140 of 188
    SpamSandwichSpamSandwich Posts: 31,317member
    Call me crazy, but in the post above, is that Dr. Blank arguing with...then blocking...himself?
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