The stock was $100 over THREE YEARS AGO. Since then Apple has added $130 billion in profits, $100 billion in cash, and $700 billion in sales.
Its an absolute joke that this stock isn't $150 right now.
If this stock had the PE of Coke it would be $200.
If you have money to spare go buy Apple stock NOW. I wish I could buy more but I'm at my max.
Here's the real shame. We're actually about $14/share below the 2012 peak. At that time, when the stock hit $705, Apple's market cap was about $660 billion. After all the subsequent buybacks, and the split, a $660 billion market cap would equate to a stock price of about $116 today. Higher if Apple bought back more shares in tne last quarter, which it most certainly did. This is the reason Sog is so insistant and furious about Cook not defending the stock; at these levels, even if earnings are a blowout, the stock is unlikely to pop sufficiently to get us back to a company value it had in Sept of 2012, when the iPhone 5 was released.
All the advancements, all the new products and services, all the increase in revenue and earnings, the increase in cash, all this hasn't even returned the company's overall value to where it was over three years ago. Meanwhile, KO, whose revenues and profits have stagnated, even dropped over the last three years, whose management hasn't found the next product to replace the totally commoditized sugar water they sell, that stock gets a 25x multiple, while Apple leads the world in innovation and sits at 10x. Incredibly frustrating. If I were younger, I'd rail against this madness, as Sog does. But I know anything I say won't change a thing, so I take my lumps and try to trade around the dips, not always successfully.
The stock was $100 over THREE YEARS AGO. Since then Apple has added $130 billion in profits, $100 billion in cash, and $700 billion in sales.
Its an absolute joke that this stock isn't $150 right now.
If this stock had the PE of Coke it would be $200.
If you have money to spare go buy Apple stock NOW. I wish I could buy more but I'm at my max.
Seriously, if Apple is undervalued relative to Coca-Cola, a beverage maker with sinking sales in its core business in developed countries, the stock is way undervalued. So follow the Graham rule and its tale about Mr. Market. Never a stock is undervalued forever, or overvalued for that matter.
About the three years, sorry but AAPL surpassed the 100$ threshold in a sustainable basis after the launch of the iPhone 6 in 2014, previously it only was a short lived event in 2012 when published the first week-end sales figures of the iPhone 5. When it touched little more over 700$ just before they started the fall, to big fall relative to balance sheet, but correctly representing a real decrease in profits in the next fiscal year.
So Gene Munster is out there saying the stock will go up 50% with iPhone 7. Why? What's going to be so special about the 7 that will get people who didn't upgrade to the 6S (or 6) to upgrade? A new case design? Seriously? I think it's nonsense.
Well, you don't have to see the current value as the "correct valuation" scenario. Now the stock is way undervalued, in essence has skipped 2015, the most successful year of Apple, or any other public traded company ever, in the stock valuation, so any positive news must make the stock go up not only for the hard figures of 2016, but for the fears that drag down the value of the stock right now. So is reasonable that if Apple has a good year, the stock growth could be even better given that it must reflect the fantastic 2015 that investors had ignored
So Gene Munster is out there saying the stock will go up 50% with iPhone 7. Why? What's going to be so special about the 7 that will get people who didn't upgrade to the 6S (or 6) to upgrade? A new case design? Seriously? I think it's nonsense.
Well, you don't have to see the current value as the "correct valuation" scenario. Now the stock is way undervalued, in essence has skipped 2015, the most successful year of Apple, or any other public traded company ever, in the stock valuation, so any positive news must make the stock go up not only for the hard figures of 2016, but for the fears that drag down the value of the stock right now. So is reasonable that if Apple has a good year, the stock growth could be even better given that it must reflect the fantastic 2015 that investors had ignored
Again I'm specifically referring to the Wall Street meme that things are bad now but everything will be great when iPhone 7 hits. They don't give any reasons why other than this nonsense that "s" year phones are someone just incremental updates as if the only thing that can't be considered "incremental" is a new case design. That's BS. What's also BS is that only 3 months into the 6S cycle this is an inevitable slowdown as people are waiting for the 7 to drop. Really? A new iPhone comes out and after roughly 3 months people stop buying it because they're waiting for the next one which is 9 months away? Nonsense.
I wish I could buy more right now. I just don't have the money to do so.
I feel good for those who can, though. And don't get me wrong, I'm not complaining at all. When I first bought AAPL it was $13/share. So I can hardly complain. I just wish I had saved more shecklels. Because now would be a great time to really invest.
And not just for Apple. I noticed that the stocks that were pushed down hardest, rose the most on Thursday and Friday.
Also, consider that after earnings are reported, the quiet period ends and companies can start buying back shares. That's pretty scary if you are short on any particular company.
Expect this theme to reoccur: Short-sellers pound on stocks during the quiet period, then close the short position as earnings season starts.
...., consider that after earnings are reported, the quiet period ends and companies can start buying back shares. That's pretty scary if you are short on any particular company.
This is just a myth, and something some lawyers worry about excessively . The only time a company should be worried is if there is some mega-material information that is non-public (e.g., a secret merger negotiation happening around an earnings announcement). Otherwise, the restrictions on buybacks are no more that those of making sure you don't sell on the first trade of the day, the last half hour of the trading day, etc.
As long as the timing and size are clearly outlined by the board, and the transactions are done through a third party, the so-called pre-earnings quiet period is a non-issue.
The rest of your post is a bunch of conspiracy theories, I am afraid.
So Gene Munster is out there saying the stock will go up 50% with iPhone 7. Why? What's going to be so special about the 7 that will get people who didn't upgrade to the 6S (or 6) to upgrade? A new case design? Seriously? I think it's nonsense.
There is nothing special with the Iphone 7, the stock is just oversold and will come back to a more normal value, though 50% is maybe pushing it.
Saying it's the 7 is just finding justification for the rise, but it would rise because it's too god damn low to make sense regardless of anything else.
Gas is near it's bottom and will rise slowly; that should at least stabilize the rise of the US dollar against other currencies.
The huge upswing in the US dollar is what most worries me about Apple; people may delay their purchase because of that alone. As long as they don't buy other phones instead, Apple will be OK long term despite that, though they may have a stall or slower growth for the next 1-2 year.
To protect their markets, their oversee margins will have to be slightly lower in 2016; don't think they can pass the whole US dollar raise in the price.
Besides the fact that many stocks are getting short squeezed right now, this is a period of fear and uncertainty for the global economy. Until that fear settles down, APPL is going to swing low. The happy news is that those with cash and guts can buy at 100 and probably sell much higher within a year. The unhappy news is that APPL is the poster child for shorts, fear mongering, and negative clickbait. Personally I'm just gonna wait until we get out of fear phase and get back into greed phase. Apple has so much cash, talent, and so many fans, this low is not gonna last forever. Just gotta be patient.
So Gene Munster is out there saying the stock will go up 50% with iPhone 7. Why? What's going to be so special about the 7 that will get people who didn't upgrade to the 6S (or 6) to upgrade? A new case design? Seriously? I think it's nonsense.
There is nothing special with the Iphone 7, the stock is just oversold and will come back to a more normal value, though 50% is maybe pushing it.
Saying it's the 7 is just finding justification for the rise, but it would rise because it's too god damn low to make sense regardless of anything else.
Gas is near it's bottom and will rise slowly; that should at least stabilize the rise of the US dollar against other currencies.
The huge upswing in the US dollar is what most worries me about Apple; people may delay their purchase because of that alone. As long as they don't buy other phones instead, Apple will be OK long term despite that, though they may have a stall or slower growth for the next 1-2 year.
To protect their markets, their oversee margins will have to be slightly lower in 2016; don't think they can pass the whole US dollar raise in the price.
How hard is it for Munster or others to just say Apple is oversold? Quit with all the other nonsense, whether it's 'wait for iPhone 7' or 'Apple as a service' theories. The fact is the minute there is one lick of uncertainty with iPhone sales the market panics and a sell off ensues. It's kind of like Disney now. One analyst got everyone freaking out about ESPN and Disney stock is down 15% over the past three months because of it.
…this is a period of fear and uncertainty for the global economy. Until that fear settles down…
What makes anyone think it’s going to settle down?
Any undervaluation in Apple is a direct result of that, and any decline in sales is the reality of the global economy finally catching up with people in a way so meaningful that even their Apple purchases can’t escape it. Remember that Apple posted nothing but record quarters through all of 2008-9, even.
So Gene Munster is out there saying the stock will go up 50% with iPhone 7. Why? What's going to be so special about the 7 that will get people who didn't upgrade to the 6S (or 6) to upgrade? A new case design? Seriously? I think it's nonsense.
Rule #1 for AAPL investors: Buy on rumor, sell on news.
Actually, in reality AAPL investors are selling on the rumor, buying on the news. This is pretty much what caused the stock to drop to sub $100 levels and stay there for weeks.
This is an old and well-known Wall Street adage, and is generally thought to apply to all stocks.
The the axiom is "buy low, sell high."
"Buy on the rumor, sell on the news" doesn't always work anymore thanks to automated trading.
"Buy low, sell high" is just a vacuous statement. Of the obvious.
I have no no idea whether the "rumor/news" adage is true or not, whether there is empirical support for it or not, or whether and how it's linked to automated trading. I was simply pointing out that it was not an adage unique to AAPL as a stock (as the OP had indicated).
I feel like I've had an epiphany and finally understand why AAPL share price is so undervalued and so easy to manipulate.
The biggest problem with AAPL stock price and it's low PE multiple is not Tim Cook's failure to defend the company. It's not because Apple is perceived as a hardware company and not a software company. Unfortunately, it's because of Apples (necessary) policy of secrecy.
The other companies that we point to with higher PE ratios have defined and well understood products or services and pipelines that make it easier for investors and analysts to estimate/calculate future growth.
The root of the problem stems from the fact that Apples product is not hardware or software - it's innovation and because Apple is so secretive about its future features and products, investors are constantly worried that the well of innovation has dried up or will dry up. When investors don't know what's coming next (if anything!), it's easy for analysts to create and spread FUD (fear, uncertainty and doubt) that scares investors from giving Apple the PE it deserves. Stock prices are all about the future, not the present. When investors don't have a clear vision of the future, share prices suffer. The only solution I see would be for Apple to become less secretive and share more information about their pipeline with the investment community. Unfortunately, this goes against the way Apple operates. Cooks public statements about "doubling down" on secrecy (even though they're a few years old now) reinforce that their secretive nature is not likely to change. Further; we all know that a degree of secrecy is necessary in order to maintain a competitive advantage and prevent competitors from stealing Apple innovations and rushing them to market in a half-baked state. Sadly, this creates a catch-22 for Apple and the AAPL stock price.
The bottom line is that AAPL and Cook need to find a way to show investors that Apples innovation pipeline is healthy and full without giving away the competitive edge that they receive by being secretive about future products and features. If they can do this, the sky is the limit for the AAPL share price and PE levels will quickly rise to where some of us know they should have been all along!
I feel like I've had an epiphany and finally understand why AAPL share price is so undervalued and so easy to manipulate.
The biggest problem with AAPL stock price and it's low PE multiple is not Tim Cook's failure to defend the company. It's not because Apple is perceived as a hardware company and not a software company. Unfortunately, it's because of Apples (necessary) policy of secrecy.
The other companies that we point to with higher PE ratios have defined and well understood products or services and pipelines that make it easier for investors and analysts to estimate/calculate future growth.
The root of the problem stems from the fact that Apples product is not hardware or software - it's innovation and because Apple is so secretive about its future features and products, investors are constantly worried that the well of innovation has dried up or will dry up. When investors don't know what's coming next (if anything!), it's easy for analysts to create and spread FUD (fear, uncertainty and doubt) that scares investors from giving Apple the PE it deserves. Stock prices are all about the future, not the present. When investors don't have a clear vision of the future, share prices suffer. The only solution I see would be for Apple to become less secretive and share more information about their pipeline with the investment community. Unfortunately, this goes against the way Apple operates. Cooks public statements about "doubling down" on secrecy (even though they're a few years old now) reinforce that their secretive nature is not likely to change. Further; we all know that a degree of secrecy is necessary in order to maintain a competitive advantage and prevent competitors from stealing Apple innovations and rushing them to market in a half-baked state. Sadly, this creates a catch-22 for Apple and the AAPL stock price.
The bottom line is that AAPL and Cook need to find a way to show investors that Apples innovation pipeline is healthy and full without giving away the competitive edge that they receive by being secretive about future products and features. If they can do this, the sky is the limit for the AAPL share price and PE levels will quickly rise to where some of us know they should have been all along!
I agree that software companies (Google, Facebook) generally get a higher PE than hardware companies (Dell, HP).
Yet, Nadella's taken Microsoft towards hardware and the company's PE has risen (35x current, 17x forward). It can't just be the cloud (which is still small) since Apple also has the cloud.
I feel like I've had an epiphany and finally understand.........
I agree with your comments but there is more at play me thinks.
Apple is a hardware company, it is a software company, it is (was) an innovation company, it is a customer experience company, it is a "sticky customer / cult company, it is a huge money making company with an insane balance sheet, etc.
My belief is that there have been too many issues with execution in various areas for too long. Add to that Cook's dismal CEO presence and you get what we are experiencing.
I have held AAPL shares for more than two decades - some impressive returns until the last 3+ years. I have lost understanding of what moves the needle on AAPL - a growing flag for me to exit AAPL when it gets to a more reasonable HISTORICAL valuation $120 +/-.
Comments
Here's the real shame. We're actually about $14/share below the 2012 peak. At that time, when the stock hit $705, Apple's market cap was about $660 billion. After all the subsequent buybacks, and the split, a $660 billion market cap would equate to a stock price of about $116 today. Higher if Apple bought back more shares in tne last quarter, which it most certainly did. This is the reason Sog is so insistant and furious about Cook not defending the stock; at these levels, even if earnings are a blowout, the stock is unlikely to pop sufficiently to get us back to a company value it had in Sept of 2012, when the iPhone 5 was released.
All the advancements, all the new products and services, all the increase in revenue and earnings, the increase in cash, all this hasn't even returned the company's overall value to where it was over three years ago. Meanwhile, KO, whose revenues and profits have stagnated, even dropped over the last three years, whose management hasn't found the next product to replace the totally commoditized sugar water they sell, that stock gets a 25x multiple, while Apple leads the world in innovation and sits at 10x. Incredibly frustrating. If I were younger, I'd rail against this madness, as Sog does. But I know anything I say won't change a thing, so I take my lumps and try to trade around the dips, not always successfully.
About the three years, sorry but AAPL surpassed the 100$ threshold in a sustainable basis after the launch of the iPhone 6 in 2014, previously it only was a short lived event in 2012 when published the first week-end sales figures of the iPhone 5. When it touched little more over 700$ just before they started the fall, to big fall relative to balance sheet, but correctly representing a real decrease in profits in the next fiscal year.
I feel good for those who can, though. And don't get me wrong, I'm not complaining at all. When I first bought AAPL it was $13/share. So I can hardly complain. I just wish I had saved more shecklels. Because now would be a great time to really invest.
And not just for Apple. I noticed that the stocks that were pushed down hardest, rose the most on Thursday and Friday.
Also, consider that after earnings are reported, the quiet period ends and companies can start buying back shares. That's pretty scary if you are short on any particular company.
Expect this theme to reoccur: Short-sellers pound on stocks during the quiet period, then close the short position as earnings season starts.
As long as the timing and size are clearly outlined by the board, and the transactions are done through a third party, the so-called pre-earnings quiet period is a non-issue.
The rest of your post is a bunch of conspiracy theories, I am afraid.
Saying it's the 7 is just finding justification for the rise, but it would rise because it's too god damn low to make sense regardless of anything else.
Gas is near it's bottom and will rise slowly; that should at least stabilize the rise of the US dollar against other currencies.
The huge upswing in the US dollar is what most worries me about Apple; people may delay their purchase because of that alone.
As long as they don't buy other phones instead, Apple will be OK long term despite that, though they may have a stall or slower growth for the next 1-2 year.
To protect their markets, their oversee margins will have to be slightly lower in 2016; don't think they can pass the whole US dollar raise in the price.
I don't think I'll be taking any stock advice from you!
Any undervaluation in Apple is a direct result of that, and any decline in sales is the reality of the global economy finally catching up with people in a way so meaningful that even their Apple purchases can’t escape it. Remember that Apple posted nothing but record quarters through all of 2008-9, even.
The the axiom is "buy low, sell high."
"Buy on the rumor, sell on the news" doesn't always work anymore thanks to automated trading.
I have no no idea whether the "rumor/news" adage is true or not, whether there is empirical support for it or not, or whether and how it's linked to automated trading. I was simply pointing out that it was not an adage unique to AAPL as a stock (as the OP had indicated).
The biggest problem with AAPL stock price and it's low PE multiple is not Tim Cook's failure to defend the company. It's not because Apple is perceived as a hardware company and not a software company. Unfortunately, it's because of Apples (necessary) policy of secrecy.
The other companies that we point to with higher PE ratios have defined and well understood products or services and pipelines that make it easier for investors and analysts to estimate/calculate future growth.
The root of the problem stems from the fact that Apples product is not hardware or software - it's innovation and because Apple is so secretive about its future features and products, investors are constantly worried that the well
of innovation has dried up or will dry up. When investors don't know what's coming next (if anything!), it's easy for analysts to create and spread FUD (fear, uncertainty and doubt) that scares investors from giving Apple the PE it deserves. Stock prices are all about the future, not the present. When investors don't have a clear vision of the future, share prices suffer. The only solution I see would be for Apple to become less secretive and share more information about their pipeline with the investment community. Unfortunately, this goes against the way Apple operates. Cooks public statements about "doubling down" on secrecy (even though they're a few years old now) reinforce that their secretive nature is not likely to change. Further; we all know that a degree of secrecy is necessary in order to maintain a competitive advantage and prevent competitors from stealing Apple innovations and rushing them to market in a half-baked state. Sadly, this creates a catch-22 for Apple and the AAPL stock price.
The bottom line is that AAPL and Cook need to find a way to show investors that Apples innovation pipeline is healthy and full without giving away the competitive edge that they receive by being secretive about future products and features. If they can do this, the sky is the limit for the AAPL share price and PE levels will quickly rise to where some of us know they should have been all along!
Yet, Nadella's taken Microsoft towards hardware and the company's PE has risen (35x current, 17x forward). It can't just be the cloud (which is still small) since Apple also has the cloud.
Apple is a hardware company, it is a software company, it is (was) an innovation company, it is a customer experience company, it is a "sticky customer / cult company, it is a huge money making company with an insane balance sheet, etc.
My belief is that there have been too many issues with execution in various areas for too long. Add to that Cook's dismal CEO presence and you get what we are experiencing.
I have held AAPL shares for more than two decades - some impressive returns until the last 3+ years. I have lost understanding of what moves the needle on AAPL - a growing flag for me to exit AAPL when it gets to a more reasonable HISTORICAL valuation $120 +/-.