I own over 3,000 shares and I essentially agree that it's undervalued. I don't know what the right price is exactly, but I do think it's undervalued.
Having said that, though, I certainly understand the opposite point of view with respect to Apple valuation. Apple is the largest company in the world, and it's easier for people to believe that the next step is down rather than up (the "Law of Large Numbers" argument). Here are a few stats I keep in mind regarding the (so-called) Law of Large Numbers --
1. Global GDP is $87 trillion
2. Global military spending is $2 trillion
3. Apple's annual revenue is expected to be in the ballpark of $300 billion for 2015.
So yes -- Apple is big. But it is not mathematically impossible to grow larger still. I think $1 trillion in revenue is possible, though it would require a couple more very successful product categories to get there.
Another thought -- I personally feel like I get a lot more for my money out of buying an iPhone than having my tax dollars purchase a stealth bomber. Apple should be the biggest pro-peace company in the world, because if we could free up some of that "wasted" military spending, it could find it's way into iPhone purchases. (note -- I realize that some military spending is necessary, and therefore not really wasted. But clearly peace is good, and peace is potentially very good for Apple).
Quote:
Originally Posted by sog35
do you own Apple stock?
I do. I own 1110 shares. And I'm glad that Icahn speaks up. Apple is still severly undervalued.
What would you rather have? Guys saying its worth $50? I mean seriously.
And its not like he doesn't back it up with FACTS and DATA.
With Google's PE Apple would be at $225+. And it should be since Apple's earnings growth, EPS growth, and revenue growth is growing FASTER than Google.
IMHO, the suggestion that, given its current size, Apple can get to PE ratio of 20x is.... well.... nuts.
It is the equivalent of saying that Apple can produce a $600B (in additional market value) product in the next couple of years. That is not happening anytime soon. To put things into perspective, consider that the iPhone -- which is Apple's largest cash flow and growth gusher -- is probably worth no more than $350B today.
(I do, however, think that Apple can get to the market's long-run average PE of ~16x, ex-cash, thus justifying a market cap of ~$700B for its operating assets. By the time it gets there, it's not inconceivable that Apple will have $300B in cash. In which case, a trillion dollar valuation is quite possible).
And he's doing what anyone his position should be doing. It's valuable to recognize and acknowledge that fact.
Really? Isn't that like saying that mineral companies SHOULD be doing strip mining, and subsistence farmers SHOULD be practicing slash-and-burn? That short-term benefit outweighs long-term consequences?
I don't understand all the Carl-hate on this site. He likes Apple and is saying things that could trigger an increase in the stock's value. If you're an AAPL stockholder, that's GOOD. If you're not an AAPL stockholder, why do you care? Will Carl benefit from the industry following his suggestions? Yes, of course. But so will WE -- the other AAPL stockholders / fans -- so stop the hate.
Really? Isn't that like saying that mineral companies SHOULD be doing strip mining, and subsistence farmers SHOULD be practicing slash-and-burn? That short-term benefit outweighs long-term consequences?
A company must rationally weigh pros and cons. If a paper manufacturer levels a forest to make their product they won't last long. That's why they plant and harvest their own trees. An oil company that causes massive oil spills will be sued out of existence by the countries in which they operate, therefore it makes financial sense for them to minimize their risks. Bad things will happen, but they tend to correct themselves thanks to external pressures of all kinds.
Notice how trolls like Constable Odo, who for months campaigned for Cook's head because of stock price, are now nowhere to be seen when the stock is through the roof? Currently sitting @ $882 pre-split. Fucking amazing how these people so giddily and easily dish out hate, but when it comes to giving credit, especially when that credit proves that their assumptions and predictions were 100% wrong, they're nowhere to be seen.
I don't understand all the Carl-hate on this site. He likes Apple and is saying things that could trigger an increase in the stock's value. If you're an AAPL stockholder, that's GOOD.
Carl Icahn is disliked and distrusted because he is seen as an asset stripping corporate raider. The fear is that he is very short-term oriented and not interested in a company's long-term health. People fear he will gain control (or at least influence) over Apple and push them in directions that will lead to short term profits, but hurt them in the long term.
Notice how trolls like Constable Odo, who for months campaigned for Cook's head because of stock price, are now nowhere to be seen when the stock is through the roof? Currently sitting @ $882 pre-split. Fucking amazing how these people so giddily and easily dish out hate, but when it comes to giving credit, especially when that credit proves that their assumptions and predictions were 100% wrong, they're nowhere to be seen.
So Carl wants Apple, to use shareholders money to buy back shares from some other shareholders so hopefully spurring the share price to rise so he - who obviously wouldn't sell - and some other shareholders can potentially make a killing - or Carl, who by then will own an even larger percentage of Apple, can get himself onto the board and start running Apple the way it ought to be run.
Call me a cynic but I really don't think Carl has Apple's best interests at heart.
Best to keep the facts (i.e. finance/math) and opinions-about-Icahn separate.
I'm always open to listening to opinions about people like Icahn and his suspect history.
But math is math. Nothing he's said can largely be disputed (though argued).
Apple increases its monetary value by buying back shares, up to a targeted share price of course.
It would makes sense to crucify Icahn if he were spreading misinformation or even exaggerating. But in this case, he's not. The math is on the table...if anything, I'd like to hear more opinion about that.
Icahn running Apple by getting on the board?...that's pure conjecture and fantasy.
Notice how trolls like Constable Odo, who for months campaigned for Cook's head because of stock price, are now nowhere to be seen when the stock is through the roof? Currently sitting @ $882 pre-split. Fucking amazing how these people so giddily and easily dish out hate, but when it comes to giving credit, especially when that credit proves that their assumptions and predictions were 100% wrong, they're nowhere to be seen.
It is a sad fact of life that many people spend their time spewing "hate" against others for little reason (not legitimate disagreements, just lots of hate and anger). That phenomena took an order of magnitude of leap forward with advent of the Internet and the boldness that many take with anonymity. Not trying to tout boy scout note here, but I don't post anything online that I wouldn't say to someone face-to-face.
That being said, maybe Mr. Odo took peoples advice and "got a life", so he comes here less often to be angry.
On the topic of hand, I understand that many are skeptical of Icahn, as he indeed has a history of causing problems for companies *when he succeeds in getting on the board* or able to influence enough other large shareholders into restructuring proposals. As long as that does not happen at Apple (and it seems miles away now), then his influence is contained, and his letters pushing for more share repurchases (for a company with 180B in the bank!) & talking up the stock is helpful for the stock price of the day.
I don't understand all the Carl-hate on this site. He likes Apple and is saying things that could trigger an increase in the stock's value. If you're an AAPL stockholder, that's GOOD. If you're not an AAPL stockholder, why do you care? Will Carl benefit from the industry following his suggestions? Yes, of course. But so will WE -- the other AAPL stockholders / fans -- so stop the hate.
Because he's only cares about himself. He doesn't care about Apple just the stock price. Once it reaches his target, he's out. Apple is left with debt and Carl is laughing all the way to the bank.
Best to keep the facts (i.e. finance/math) and opinions-about-Icahn separate.
I'm always open to listening to opinions about people like Icahn and his suspect history.
But math is math. Nothing he's said can largely be disputed (though argued).
Apple increases its monetary value by buying back shares, up to a targeted share price of course.
It would makes sense to crucify Icahn if he were spreading misinformation or even exaggerating. But in this case, he's not. The math is on the table...if anything, I'd like to hear more opinion about that.
Icahn running Apple by getting on the board?...that's pure conjecture and fantasy.
What happened to value being determined by the market? No matter how valid his opinions, they surely don't outweigh or are any more valid than the collective opinion of the market.
Icahn is interested in himself, as most of us are. He has a large holding of Apple and wants to see it maximized, as shareholders often do. I don't see anything earth shattering about his statements.
Apple hasn't invited him to be on the board. And Carl isn't the only pressure on Apple to increase its buyback and dividend programs.
Right now, I like the guy. It may be true that under Steve, Apple would not take on debt to buy back shares. But borrowing money at less than 1% to save 35%+ in taxes seems like a smart move to me. From what I hear, Apple's cash flows more than cover the interest. Plus, it's a deduction. ;-)
Comments
I own over 3,000 shares and I essentially agree that it's undervalued. I don't know what the right price is exactly, but I do think it's undervalued.
Having said that, though, I certainly understand the opposite point of view with respect to Apple valuation. Apple is the largest company in the world, and it's easier for people to believe that the next step is down rather than up (the "Law of Large Numbers" argument). Here are a few stats I keep in mind regarding the (so-called) Law of Large Numbers --
1. Global GDP is $87 trillion
2. Global military spending is $2 trillion
3. Apple's annual revenue is expected to be in the ballpark of $300 billion for 2015.
So yes -- Apple is big. But it is not mathematically impossible to grow larger still. I think $1 trillion in revenue is possible, though it would require a couple more very successful product categories to get there.
Another thought -- I personally feel like I get a lot more for my money out of buying an iPhone than having my tax dollars purchase a stealth bomber. Apple should be the biggest pro-peace company in the world, because if we could free up some of that "wasted" military spending, it could find it's way into iPhone purchases. (note -- I realize that some military spending is necessary, and therefore not really wasted. But clearly peace is good, and peace is potentially very good for Apple).
Quote:
do you own Apple stock?
I do. I own 1110 shares. And I'm glad that Icahn speaks up. Apple is still severly undervalued.
What would you rather have? Guys saying its worth $50? I mean seriously.
And its not like he doesn't back it up with FACTS and DATA.
With Google's PE Apple would be at $225+. And it should be since Apple's earnings growth, EPS growth, and revenue growth is growing FASTER than Google.
IMHO, the suggestion that, given its current size, Apple can get to PE ratio of 20x is.... well.... nuts.
It is the equivalent of saying that Apple can produce a $600B (in additional market value) product in the next couple of years. That is not happening anytime soon. To put things into perspective, consider that the iPhone -- which is Apple's largest cash flow and growth gusher -- is probably worth no more than $350B today.
(I do, however, think that Apple can get to the market's long-run average PE of ~16x, ex-cash, thus justifying a market cap of ~$700B for its operating assets. By the time it gets there, it's not inconceivable that Apple will have $300B in cash. In which case, a trillion dollar valuation is quite possible).
Really? Isn't that like saying that mineral companies SHOULD be doing strip mining, and subsistence farmers SHOULD be practicing slash-and-burn? That short-term benefit outweighs long-term consequences?
I don't understand all the Carl-hate on this site. He likes Apple and is saying things that could trigger an increase in the stock's value. If you're an AAPL stockholder, that's GOOD. If you're not an AAPL stockholder, why do you care? Will Carl benefit from the industry following his suggestions? Yes, of course. But so will WE -- the other AAPL stockholders / fans -- so stop the hate.
If our military dropped iPhones on other countries instead of bombs, we'd be making a lot more friends and fewer enemies.
A company must rationally weigh pros and cons. If a paper manufacturer levels a forest to make their product they won't last long. That's why they plant and harvest their own trees. An oil company that causes massive oil spills will be sued out of existence by the countries in which they operate, therefore it makes financial sense for them to minimize their risks. Bad things will happen, but they tend to correct themselves thanks to external pressures of all kinds.
Notice how trolls like Constable Odo, who for months campaigned for Cook's head because of stock price, are now nowhere to be seen when the stock is through the roof? Currently sitting @ $882 pre-split. Fucking amazing how these people so giddily and easily dish out hate, but when it comes to giving credit, especially when that credit proves that their assumptions and predictions were 100% wrong, they're nowhere to be seen.
I don't understand all the Carl-hate on this site. He likes Apple and is saying things that could trigger an increase in the stock's value. If you're an AAPL stockholder, that's GOOD.
Carl Icahn is disliked and distrusted because he is seen as an asset stripping corporate raider. The fear is that he is very short-term oriented and not interested in a company's long-term health. People fear he will gain control (or at least influence) over Apple and push them in directions that will lead to short term profits, but hurt them in the long term.
Perhaps he jumped off a bridge?
Pump and dump
So Carl wants Apple, to use shareholders money to buy back shares from some other shareholders so hopefully spurring the share price to rise so he - who obviously wouldn't sell - and some other shareholders can potentially make a killing - or Carl, who by then will own an even larger percentage of Apple, can get himself onto the board and start running Apple the way it ought to be run.
Call me a cynic but I really don't think Carl has Apple's best interests at heart.
Best to keep the facts (i.e. finance/math) and opinions-about-Icahn separate.
I'm always open to listening to opinions about people like Icahn and his suspect history.
But math is math. Nothing he's said can largely be disputed (though argued).
Apple increases its monetary value by buying back shares, up to a targeted share price of course.
It would makes sense to crucify Icahn if he were spreading misinformation or even exaggerating. But in this case, he's not. The math is on the table...if anything, I'd like to hear more opinion about that.
Icahn running Apple by getting on the board?...that's pure conjecture and fantasy.
Notice how trolls like Constable Odo, who for months campaigned for Cook's head because of stock price, are now nowhere to be seen when the stock is through the roof? Currently sitting @ $882 pre-split. Fucking amazing how these people so giddily and easily dish out hate, but when it comes to giving credit, especially when that credit proves that their assumptions and predictions were 100% wrong, they're nowhere to be seen.
It is a sad fact of life that many people spend their time spewing "hate" against others for little reason (not legitimate disagreements, just lots of hate and anger). That phenomena took an order of magnitude of leap forward with advent of the Internet and the boldness that many take with anonymity. Not trying to tout boy scout note here, but I don't post anything online that I wouldn't say to someone face-to-face.
That being said, maybe Mr. Odo took peoples advice and "got a life", so he comes here less often to be angry.
On the topic of hand, I understand that many are skeptical of Icahn, as he indeed has a history of causing problems for companies *when he succeeds in getting on the board* or able to influence enough other large shareholders into restructuring proposals. As long as that does not happen at Apple (and it seems miles away now), then his influence is contained, and his letters pushing for more share repurchases (for a company with 180B in the bank!) & talking up the stock is helpful for the stock price of the day.
Because he's only cares about himself. He doesn't care about Apple just the stock price. Once it reaches his target, he's out. Apple is left with debt and Carl is laughing all the way to the bank.
If our military dropped iPhones on other countries instead of bombs, we'd be making a lot more friends and fewer enemies.
As long as we make sure each of them have Apple Care before they're dropped
I don't recall someone whining about a stock and then it immediately goes up.
Best to keep the facts (i.e. finance/math) and opinions-about-Icahn separate.
I'm always open to listening to opinions about people like Icahn and his suspect history.
But math is math. Nothing he's said can largely be disputed (though argued).
Apple increases its monetary value by buying back shares, up to a targeted share price of course.
It would makes sense to crucify Icahn if he were spreading misinformation or even exaggerating. But in this case, he's not. The math is on the table...if anything, I'd like to hear more opinion about that.
Icahn running Apple by getting on the board?...that's pure conjecture and fantasy.
What happened to value being determined by the market? No matter how valid his opinions, they surely don't outweigh or are any more valid than the collective opinion of the market.
Icahn is interested in himself, as most of us are. He has a large holding of Apple and wants to see it maximized, as shareholders often do. I don't see anything earth shattering about his statements.
Apple hasn't invited him to be on the board. And Carl isn't the only pressure on Apple to increase its buyback and dividend programs.
Right now, I like the guy. It may be true that under Steve, Apple would not take on debt to buy back shares. But borrowing money at less than 1% to save 35%+ in taxes seems like a smart move to me. From what I hear, Apple's cash flows more than cover the interest. Plus, it's a deduction. ;-)
That doesn't make what he says any less true though.