Shares of Apple don't reflect significance of iPhone Upgrade Program, Piper Jaffray says

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  • Reply 21 of 44
    dasanman69dasanman69 Posts: 13,001member
    triton100 wrote: »
    sog35 wrote: »

    Shareholders are literally being robbed of $200 BILLION in share value.  That is a crime.  Apple needs to act. If Apple does not act many shareholders will just give up and sell and the price will drop even more. If Apple continues to allow manipulators to rape its stock price eventually investors will avoid it like the plague no matter how profitable they are. 

    But how exactly is Wall Street manipulating the stock. Not disputing as such. Just intrigued to know what it is they do as I've heard so much about apple being manipulated but not aware of how physically this happens ? How is no one at Wall Street found accountable. Surely investigations are done

    Companies fall into 2 categories, they either sell high profit margin premium/luxury items in low quantities, or lower quality, and low profit margin items in high quantities. Apple is selling a high margin premium item in massive quantities. It's something rarely done before, and many people doubt that they can sustain the continuous growth.

    Nothing can grow forever, and many feel that Apple has reached the apex, and sales are either going to plateau, or even drop. Once an analyst makes negative claims about Apple there's a selling frenzy. The analysts are always wrong but it seems like investors have short memories.

    Just the other day my coworker said "I think Apple is done". I ask what made him say that, and he mumbled something about the competition. I asked if he had looked at the numbers the competition were posting, and he said he hadn't. He was definitely just regurgitating something a analyst had said.
  • Reply 22 of 44
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by Aslo Higgens View Post



    It's simple math. If Apple continues with their current cash flow they would effectively buy back every single share.in the next ten years.

    NYSE listed companies must have at least 1.1 million publicly-traded shares outstanding that are worth at least $100 million.

  • Reply 23 of 44
    asdasdasdasd Posts: 5,684member
    sog35 wrote: »
    You are assuming too much.

    The last 3 years Apple has grown EPS 45%.  Yet the stock is worth less than 3 years ago.

    What makes you think if Apple grows profit another 45% in the next 3 years the stock will go up one cent?

    Apple could grow profits 10% the next 10 years and still be valued less than today.  Proof is what happenned the last 3 years.

    Sept2012 - stock worth $630 billon
    Sept2015 - grew profits 45% - stock worth $620 billion

    Yes the stock is under valued but the market assumes future commoditisation of the iPhone. I bet the iPad figures are spooking them as well. The rest of Apples lineup is relatively chump change.

    Will they be convinced if this scheme works? I think they might. let's see next years figures.

    That said I won't go back into the stock until Apple has a quarter of low or negative growth yoy which might happen next Q before this leasing scheme full takes off. That will collapse the stock but make it very attractive.
  • Reply 24 of 44
    hmmhmm Posts: 3,405member
    Quote:
    Originally Posted by Aslo Higgens View Post



    It's simple math. If Apple continues with their current cash flow they would effectively buy back every single share.in the next ten years. Business 101. The only argument you can make is that Apple sales will plummet over the next ten years. If you believe that, then yes you should sell. Otherwise, quit crying and step up to the plate.

    Edited for less snark : A company can't buy itself. With fewer shares outstanding, they tend to carry a higher premium. I'm just a little tired of others who misinterpret buybacks on this forum. I don't know whether they will keep up the buyback program for the next ten years. That's a high level of speculation.

  • Reply 25 of 44
    Quote:
    Originally Posted by sog35 View Post

     

    I'm beginning to feel this way too.  Which is extremely dangerous for Apple's stock.  I know many of my friends feel the same way.

     

    Apple has tried and done everything:  massive buyback, healthy dividend, record breaking profits, awesome revenue growth.  Yet Wall Street continues to punish the stock for no reason at all.  

     

    Once the stock reaches $120 I'll probably sell everything and be done with it.  IMO, this stock is worth $150 minimum. But it will never get fair value because Apple makes very little effort to fend of negative lies and rumors.  Nor does Cook give hints that they would be willing to take the company private.

     

    I took a big risk in investing in Apple in 2012/2013.  I knew they would destroy Samsung once the big phones came out.  I was 100% right but the stock is still undervalued by 40%.  

     

    Sick of this shit.  And I bet thousands of other investors are also sick.  

     

    Since Sept2012 Apple has grown annual revenue by $80,000,000,000. That more revenue then the entire Google does in a year.  Yet the stock has DECREASED in value since then.  How the fuc is that even possible.


    Groan.... sounds like we're back to your GTAT angst all over again... 

     

    You know, you have to realize that Apple -- and stocks in general -- don't perform to please you and your friends when you want it ("$150 by end of 2015"), and how you want it ("Take it private! Take it private!"). Moreover, if you have angst, please mourn in private and spare us this pathetic display of whining and self-flagellation.

     

    Here's a better idea: just invest in T-bonds, and you'll sleep better. Even better idea: please go join Opus Dei.

  • Reply 26 of 44
    Quote:

    Originally Posted by sog35 View Post

     
    Quote:
    Originally Posted by hmm View Post

     

    Take the company public seems like an error. Taking the company private is virtually impossible. What investment groups could really raise hundreds of billions of dollars to pull it off and what would be the point? You would have fewer liquidity options at that point, and now its owners would have far more clout.


     

    Technically there is way for Apple to go private and still have thousands of shareholders.

     

    The SEC rule is that a private company can only have up to 2,000 shareholders of record.  But most public companies don't record shareholders by individual.  For example all individual shareholders who own shares in a Scottrade account are counted as ONE SHAREHOLDER of record.  Scottrade is counted as one shareholder of record even though it may have thousands of individual shareholders.  So how many investment houses are there?  Scottrade, TD, BOA, Merily Lynch, ect.  Probably less than 2,000.  And if it was more than 2,000 it would be no big deal to combine those on the record.

     

    Second Apple could go private and remove their stock from public trading even if they have MORE than 2,000 shareholders.  They would still need to file quarterly financials with the SEC but they could remove the stock from trading on the NYSE.  

     

    So technically Apple could go private even with tens of thousands of shareholders.

     

    Next is funding. Who has $400 billion to buy Apple?  The shareholders do.  They could simply convert their public shares to private shares held in a trust.  This is no big deal.  Today you can already buy private equity shares from a brokerage through a fund.  And those who want to sell can at a 40-50% premium.  IMO, very few would sell and Apple could easily get the $100 billion to buy out the few who want to sell.


    Please stop.

     

    You're starting over with the same unbelievably poorly-thought-out and poorly-argued stuff from another thread (the Samsung earnings announcement thread) from just yesterday.

  • Reply 27 of 44
    Quote:

    Originally Posted by xcali View Post



    ... Apple stock could easily go down 30%

    Oh snap, we have a new stock soothsayer in our midst.... all take a bow.... :rolleyes: 

  • Reply 28 of 44
    So investors are fearful of Apple's earnings growth but disregard the fact they have 200b in cash and could grow it to $260b in 12 months. Everyone knows that if they just maintain earnings they could have their market cap in cash in 6 years. It is apparent that too many regular joes stand to gain if Apple was given fair multiple so you end up with the this side show. Wasn't Apple trading above $109 before the China Mobile deal? Now that Samsung has been defeated the narrative is China
  • Reply 29 of 44
    Quote:

    Originally Posted by hmm View Post

     

    Edited for less snark : A company can't buy itself. With fewer shares outstanding, they tend to carry a higher premium. I'm just a little tired of others who misinterpret buybacks on this forum. I don't know whether they will keep up the buyback program for the next ten years. That's a high level of speculation.


    Yes, you're right. But you can get the float down to a sufficiently small number that it becomes easier to do. There's no law against repurchasing as much as you want, as long as shareholders are willing to sell at the buyback price.

     

    I agree with you, however, that the price is quite unlikely to stay the same.

     

    I think that all that the previous poster meant was that, at a P/E of 10x, it takes ten years to buy out the shares of the company (assuming it stays at the same level). I don't think he was suggesting that Apple will go private with its cash flows ten years from now.

  • Reply 30 of 44
    Why not spin off a company , like google did with alphabet, retain majority interest, throw the apple car in the company with an industry exec at top, sell minority shares on market , proceeds in US dollars to either retire shares or debt. Use iPhone part of company to sell design services back. New car company would be considered a growth company and would probably be well received. Current direction would deplete apple of cash as they fund the car company for 4 years until launch and then some afterwards. That would depress Apple price further. In this scenario, majority interest will hike value if Apple shares, much like yahoo and its alibsba holdings
  • Reply 31 of 44
    Don't forget that with the $200 billion in cash, the actual valuation of the company is $418 billion. It really is ludicrous when you think about it, especially compared to valuations of other tech companies like Google, Amazon, Netflix, Uber, Alibaba, etc.
  • Reply 32 of 44
    512ke512ke Posts: 782member



    Why did I suggest 5 years?

     

    It's because if you bought Apple at any time after 2001 and held for five years, you made money.

     

    5 years is the right amount of time as a minimum. If you want to hold for more, I say, great! Just not less than 5.

     

    Less than 5, there is too much luck, plus you (or at least, I) get burned by traders and computers that can time the market way better than I can.

  • Reply 33 of 44
    Thank you for clarifying my remarks. Of course Apple will not buy back every single share. My point, how can people say Apple stock will never go up in price when every year they add 80 billion in cash? Whether it be a buyback or money in the bank the value of Apple the company will continue to increase regardless of Mr. Market. The stock price will follow out of necessity.
  • Reply 34 of 44
    ksecksec Posts: 1,568member

    Agree, Apple stock is stupidly cheap. The only bloody reason why Apple hasn't been a take over target is because they are too big. If I have 1 Trillion now i will buy Apple without a 2nd thought. But Wall street will properly say Apple is worth 2 Trillion and push the prices up.

     

    Back to the upgrade program Question, as some have said, Apple has literally try every moves they have, stock buy back, dividends, etc and stock prices isn't moving in flavor.  I guess the upgrade Program will change that, and in future where Apple move towards Apple as a Services, AaaS ( Yeah I just invented another acronym ).

     

    You pay a monthly fees and a contract and you get to use the iPhone and upgrade as you continue the contract.

    You pay a monthly fees and you get iCloud Storage, or iCloud Backup.

    You Pay a monthly fees and you get Apple Music

    You Pay a monthly fees and you get Apple TV

     

    As you can see on Wall Street, stock price for Software as a Services ( SaaS ) companies are priced much better then other software company because they have guarantee recurring revenue and a lock in effect. Just look at Salesforce and its ridiculous P/E ratio.

    I dont have any number in hand but Apple already has a Devices as a Services business, I guess majority of the iPhone owner continue to upgrade to newer iPhone when their contract finish. But this recurring revenue are being passed to Mobile Network rather then Apple.

     

    The new upgrade program is a pretty damn good deal in my opinion. You get 2 FREE screen replacement ( correct me if i am wrong because even Apple Care dont give you free replacement ) during the contract. And with the recent Expansion of iCloud Datacentre, how about Apple throwing in a free iCloud Storage that is the storage size of your iPhone, i.e you get 64GB iCloud Storage if you have 64Gb devices. 

    ( The same storage size will give customer the perception their data are always backed up. In reality, iPhone dont have exact 64GB storage due to SI Unit uses, and iOS, Apps etc takes up spaces as well, so you will actually gain a little more storage space for other needs )

     

    Which leads to Apple Sim / Software SIM, MNVO, etc. It is unlikely Apple will ever launch a MNVO. ( http://ben-evans.com/benedictevans/2015/9/12/subscription-iphones?rq=MVNO) We will likely see Apple handling the initial setup with their partnered carrier. Along with the rumored Siri Voicemail.

    Carrier has been battling this for a long time. They need to move iPhone units as per their agreement, they are on a thin margin business, iPhone wholesale price being the same means they have very little room to wiggle. Its a tough market when your Smartphone market has matured with not much room to grow. This means Carrier are now forced to do what they were supposed to do in the first place, compete for coverage, speed, and services.

    Even if Apple dont get a cut from selling the carrier plans activated from Apple Store, they will still retain all the profit they sell the iPhone.

    ( Remember carriers get a thin slice if they sell the iPhone from their stores )

     

    John Gruber has said such services would likely mean lower profit margin for Apple. Since Apple has to figure out where to sell those 1 year old devices once their upgrade program contract finish. But I guess Wall Street will like this model much more and hopefully pushes the share prices up.

     

    So rather then trying to lower the average selling price of iPhone, Apple finally gets to lower the entry or the TCO of iPhone for every customer in exchange for a lock in.

     

    What if Wall Street dont like it? You ask. Well stock prices for Apple is low enough, I guess Tim has that 200B buyback buffer for a reason.

  • Reply 35 of 44
    singularitysingularity Posts: 1,328member
    Quote:

    Originally Posted by sog35 View Post

     



    Not true.  Just look at the last 3 years.

     

    Sept2012  - Apple had $120 billion in cash.  Company was worth $630 billion.

    Sept2015 -  Apple will have about $210 billion in cash. Company is worth only $625 billion.

     

    Yes Apple added over $90,000,000,000 in cash to their bank account yet they are worth $5 billion less.

     

    How the fuc does that make sense.  Even if Apple adds another $100,000,000,000 in cash the next 2 years that means NOTHING.  Wall Street can still keep this stock from going up a single cent.  In fact if its like the last 3 years its value will go down.

     

    So how the fuc does a company add almost $100,000,000,000 in cash to its bank account and not gain a CENT OF VALUE?

     

    Apple must do something.  Apple shareholders and employees are being cheated from HUNDREDS of BILLIONS of dollars in shareholder value.


    you appear to not understand how the stock market actually works.

     

    The value of any stock is what someone is prepared to pay on any given time point.

     

    let repeat that again for you to understand

     

    The value of any stock is what someone is prepared to pay on any given time point.

     

    and once again in case you haven't understood it.

     

    The value of any stock is what someone is prepared to pay on any given time point.

  • Reply 36 of 44
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by sog35 View Post

     

     

    I'm beginning to feel this way too.  Which is extremely dangerous for Apple's stock.  I know many of my friends feel the same way.

     

    Apple has tried and done everything:  massive buyback, healthy dividend, record breaking profits, awesome revenue growth.  Yet Wall Street continues to punish the stock for no reason at all.  

     

    Once the stock reaches $120 I'll probably sell everything and be done with it.  IMO, this stock is worth $150 minimum. But it will never get fair value because Apple makes very little effort to fend of negative lies and rumors.  Nor does Cook give hints that they would be willing to take the company private.

     

    I took a big risk in investing in Apple in 2012/2013.  I knew they would destroy Samsung once the big phones came out.  I was 100% right but the stock is still undervalued by 40%.  

     

    Sick of this shit.  And I bet thousands of other investors are also sick.  

     

    Since Sept2012 Apple has grown annual revenue by $80,000,000,000. That more revenue then the entire Google does in a year.  Yet the stock has DECREASED in value since then.  How the fuc is that even possible.




    Apple do not offer a healthy dividend, which in part could be linked to their problem.  Most of their money is out of reach because they choose to not pay US taxes.  While they continue to do this most of their earnings are out of reach of investors.  It's hypothetical wealth.

     

    If Apple repatriated most of it's overseas generated income, paid the tax on it and disbursed it to share holders as massively increased dividends, the share price would likely very easily achieve the levels you and Icahn want in a very short time frame.

     

    APPL's dividend yield is only 1.8%.  Apple could easily make that 6% and would still be rolling in money.

  • Reply 37 of 44
    asdasdasdasd Posts: 5,684member
    Quote:

    Originally Posted by sog35 View Post

     

     

    Give me a break with that elementary school definition.  We are talking about the REAL WORLD not some textbook theoretical world.

     

    So a stock is valued at what someone is willing to pay for it?  Sure cowboy.

     

    So Pets.com was worth $10 billion in 1999?

    So was Enron worth $186 billion in 1999?

     

    Give me a break.  Market manipulators can easily cause a stock to be mispriced.




    Hes not even quoting economics 101 because economics assumes that the market always fairly prices stock, and has perfect information. Which is nonsense. You need to get to a PHD level in economics before the tell you that markets aren't perfect and can have bubbles. 

     

    And value != price. Singularity should have said "The price of any stock is what someone is prepared to pay on any given time point.", which is of course tautological. Its not true that value == price. 

  • Reply 38 of 44
    sog35 wrote: »
    Give me a break with that elementary school definition.  We are talking about the REAL WORLD not some textbook theoretical world.

    So a stock is valued at what someone is willing to pay for it?  Sure cowboy.

    So Pets.com was worth $10 billion in 1999?
    So was Enron worth $186 billion in 1999?

    Give me a break.  Market manipulators can easily cause a stock to be mispriced.
    you could give everyone a break by stop flogging that horse. It is dead. Not alive. It has shuffled off this mortal coil.

    getting away from any semantics over the argument of value and price/cost. If Apples market valuation is $700 billion then that's what it is. If its $500 billion then that is also what it is. What you think is totally irrelevant and it doesn't matter how many times you post it will not change anything.
    One thing I do know (economics 101 or not) when I buy shares I hold them for a long time (five years plus, as that way I avoid any capital gains tax etc) and when/if I sell them I decide if the current price is what I will accept, if not then I'm very unlikely to sell.
  • Reply 39 of 44

    One thing I do know (economics 101 or not) when I buy shares I hold them for a long time (five years plus, as that way I avoid any capital gains tax etc) and when/if I sell them I decide if the current price is what I will accept, if not then I'm very unlikely to sell.

    Hi how do you mean you pay no capital gains tax ? Is this a US thing? In the uk you have to pay 28% cgt regardless of how many years you've held the shares ? Is it not similar in the US ?
  • Reply 40 of 44
    triton100 wrote: »
    Hi how do you mean you pay no capital gains tax ? Is this a US thing? In the uk you have to pay 28% cgt regardless of how many years you've held the shares ? Is it not similar in the US ?

    "Long-term capital gains and qualified dividends

    A top rate of 15% applies to qualified dividends and the sale of most appreciated assets held over one year (28% for collectibles and 25% for depreciation recapture) for single filers with taxable income up to $413,200 ($464,850 for married filing jointly). Long-term capital gains or qualified dividend income over that threshold are now taxed at a rate of 20%."

    http://perspective.schwab.com/mobile/article/8441/Taxes-Whats-New
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