YouTube is going nuts over this. Stay away from the comment section. It's filled with "#FreeFortnite" and welfare mommas claiming Apple should share the wealth with the population.
P.S. It's iPhone 6 hype all over again. People are filled to the brim with Apple envy!
Magnificent company, magnificent valuation, led by an incredible CEO. A massive achievement, so kudos to all at Apple for producing world-beating products and services, in the process creating outsized value for both consumers and shareholders.
But a hard-nosed investor has to assume that expected returns will be lower going forward. Which is ok.
With a P/E ratio of 35, APPL is not terribly attractive as a high growth stock. Nevertheless, the market doesn’t always behave rationally.
Someone asked when Apple will hit a $3 T market cap.
The bottom line: Apple basically has been doubling its EPS every two to three years since 2009 (when I first started tracking it). Yes, part of that is due to share buybacks, but what’s the alternative use of their incredible cash flow? Buy other companies? Increase dividends? The best “company” Apple can buy is itself. And as has been pointed out many times, buybacks have serious advantages over dividends for long term holders. Apple will be in the neighborhood of $1,000/share in three years or less, with a lot less stock. Do the math.
(Hint: EPS right now is $12.57. That gives us an EPS of (2x12.57=) ~$25/share. In three years Apple will probably have the equivalent (pre-split) of 4 B shares. If P equals $1,000, P/E equals (1,000/25=) 40. Is a company that's been doubling its EPS every 2-3 years worth a P/E of 40? You betcha!
And they asked for 50% off their rent in the UK during the corona crisis. Nice.
Apple didn’t become what it is today by being generous.
Sometime, when I read comments like that one you quoted, I think that some people incorrectly assume that Apple HAS $2 trillion in cash sitting around when they hear the market cap is (roughly) $2T. I think the term “market value” is not understood by these people.
Someone asked when Apple will hit a $3 T market cap.
The bottom line: Apple basically has been doubling its EPS every two to three years since 2009 (when I first started tracking it). Yes, part of that is due to share buybacks, but what’s the alternative use of their incredible cash flow? Buy other companies? Increase dividends? The best “company” Apple can buy is itself. And as has been pointed out many times, buybacks have serious advantages over dividends for long term holders. Apple will be in the neighborhood of $1,000/share in three years or less, with a lot less stock. Do the math.
(Hint: EPS right now is $12.57. That gives us an EPS of (2x12.57=) ~$25/share. In three years Apple will probably have the equivalent (pre-split) of 4 B shares. If P equals $1,000, P/E equals (1,000/25=) 40. Is a company that's been doubling its EPS every 2-3 years worth a P/E of 40? You betcha!
Apple hasn’t been doubling its EPS every two to three years. That was true in 2012. It was actually increasing EPS at a faster rate than that back then.
But its EPS for 2020 will be around double what it was for 2012, 8 years prior. The increase over the last 2 years will probably be between 5 and 15%. It’s actually had EPS declines every third year for 3 cycles now (i.e. in 2013, 2016, and 2019).
I’m not, btw, arguing against Apple’s value - just pointing out that it hasn’t been doubling its EPS every two to three years.
A long way to go before they’re in Dutch East India Co. territory (about $7 trillion valuation), but it’s a start.
Groan, here we go again, with an utterly bogus valuation comparison.
Btw, the guy that invented wheel is worth 700 billion trillion in today’s dollars, so please stop.
While it may be a bit of a stretch to accurately calculate several hundred years worth of inflation coupled with multiple currency fluctuations, the Dutch East India Company was a massive powerhouse that bent the will of kingdoms the world over.
Apple is big and powerful. But it’s nowhere near as big and powerful as the Dutch East India Company was back then. Lacking a better metric, the valuation comparison stands IMO.
The funny thing is that for most of the years between 1600 - 2020 (at least in the US, inflation was coupled with deflation, so that a dollar in 1910 was worth $1.04 1790 dollars (source: https://www.measuringworth.com/calculators/uscompare/relativevalue.php ) as a measure of CPI. Not bad for 120 years. Using that same site, the last 110 years have see the dollar in 2019 is worth 3.6 cents in 1910 dollars.
Constant incremental nflation hasn't been with us always.
It would be nice if they could double again in the next 3 years That’s my target lol
In terms of the Epic shenanigans I feel that the worst case scenario is that the courts allow Fortnite back in the app-store as long as it adheres to the agreement until any final courts decisions. So worst case Apple keep making money from Fortnite purchases... I get the feeling Epic wouldn’t put the app back though, they’d rather cut off their own nose is my guess.
Apple should use that money to fund their own game studio. It's sad Apple has the biggest gamin store in the world yet serious gamers don't take it serious.
That’s because the Mac, great as it is, is not a serious gaming machine. Mobile games suck for the most part, and although AppleTV has potential, it can’t compete with a dedicated console yet.
A long way to go before they’re in Dutch East India Co. territory (about $7 trillion valuation), but it’s a start.
Groan, here we go again, with an utterly bogus valuation comparison.
Btw, the guy that invented wheel is worth 700 billion trillion in today’s dollars, so please stop.
While it may be a bit of a stretch to accurately calculate several hundred years worth of inflation coupled with multiple currency fluctuations, the Dutch East India Company was a massive powerhouse that bent the will of kingdoms the world over.
Apple is big and powerful. But it’s nowhere near as big and powerful as the Dutch East India Company was back then. Lacking a better metric, the valuation comparison stands IMO.
But... but... the Dutch East India Company didn't have Dutch East Microsoft, Dutch East Samsung, and Dutch East Google ripping them off at every turn.
I'd love to see AI repost a thread from the 'Apple can't get any larger due to The Law of Big Numbers' days. If I recall AAPL was around $700 pre the 7:1 split? There were so many 'experts' here explaining this. It would be a riot to read again and have a walk of shame.
It would be nice if they could double again in the next 3 years That’s my target lol
In terms of the Epic shenanigans I feel that the worst case scenario is that the courts allow Fortnite back in the app-store as long as it adheres to the agreement until any final courts decisions. So worst case Apple keep making money from Fortnite purchases... I get the feeling Epic wouldn’t put the app back though, they’d rather cut off their own nose is my guess.
Apple should use that money to fund their own game studio. It's sad Apple has the biggest gamin store in the world yet serious gamers don't take it serious.
That’s because the Mac, great as it is, is not a serious gaming machine. Mobile games suck for the most part, and although AppleTV has potential, it can’t compete with a dedicated console yet.
I just posted this on a more relevant thread but you may find this interesting I have set up a side by side:
2019 Dell XPS 8930 PC which has 64 GB RAM, 8th Gen Intel Core i7-8700, with Nvidia GTX 1080 into a 4K Dell 27" monitor with Windows 10 Pro (a mid-level gaming desktop IMHO). About $4,000 worth in total excluding games.
2019 iMac 27" i9, 5K, 64 GB RAM with the Radeon Pro Vega 48 8 GB, booting into Windows 10 Pro.
Both run Red Dead Redemption II and GTAV in 4K with quality maxed out at around 60 f.p.s. and the fans seem pretty much the same noise level... when they come on, which is intermittent on both. Neither gets overly hot. Frankly, I can't tell any difference between them in use. The iMac can go up to 5K without any frame rate difference, the Dell is maxed out at Ultra-HD but visually both look amazing.
I am currently installing Microsoft Flight Simulator 2020 on the iMac 5K, hoping that with run as well as the Dell.
Conclusion...for the first time (and I tried many) a Mac user with a copy of Windows10 and installing Boot Camp has the full PC gaming experience. It is ironic that the last few ever consumer Intel Macs are the first-ever IMHO to be on par with a reasonably serious gaming PC.
I'm a bit lost on the timing and mechanics of the split. "Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020."
I imagine the added shares don't actually get issued until the 31st? If they get issued and can be traded immediately after COB August 24th wouldn't that temporarily put the market cap at roughly $8T? (I know that SURELY can't be the case) What happens with shares purchased during the entire week between?
I'm a bit lost on the timing and mechanics of the split. "Each Apple shareholder of record at the close of business on August 24, 2020 will receive three additional shares for every share held on the record date, and trading will begin on a split-adjusted basis on August 31, 2020."
I imagine the added shares don't actually get issued until the 31st? If they get issued and can be traded immediately after COB August 24th wouldn't that temporarily put the market cap at roughly $8T? (I know that SURELY can't be the case) What happens with shares purchased during the entire week between?
The additional shares will be issued on August 28th (a Friday) when after hours trading stops, at 8:00 PM EST. Starting on August 31st (a Monday) they will trade at the lower price - around 1/4th of what they stopped trading at on Friday.
If you buy shares between the record date (August 24th) and the distribution date (August 28th), the trade will (if it's done through Nasdaq, and not as some kind of private trade) have attached to a kind of note which means that the seller owes the buyer the 3 extra shares. Those shares technically would go to the original owner (as of August 24th) on the distribution date (August 28th) and then, automatically from the traders' perspectives, would be transferred to the buyer.
It would be nice if they could double again in the next 3 years That’s my target lol
In terms of the Epic shenanigans I feel that the worst case scenario is that the courts allow Fortnite back in the app-store as long as it adheres to the agreement until any final courts decisions. So worst case Apple keep making money from Fortnite purchases... I get the feeling Epic wouldn’t put the app back though, they’d rather cut off their own nose is my guess.
Apple should use that money to fund their own game studio. It's sad Apple has the biggest gamin store in the world yet serious gamers don't take it serious.
That’s because the Mac, great as it is, is not a serious gaming machine. Mobile games suck for the most part, and although AppleTV has potential, it can’t compete with a dedicated console yet.
I just posted this on a more relevant thread but you may find this interesting I have set up a side by side:
2019 Dell XPS 8930 PC which has 64 GB RAM, 8th Gen Intel Core i7-8700, with Nvidia GTX 1080 into a 4K Dell 27" monitor with Windows 10 Pro (a mid-level gaming desktop IMHO). About $4,000 worth in total excluding games.
2019 iMac 27" i9, 5K, 64 GB RAM with the Radeon Pro Vega 48 8 GB, booting into Windows 10 Pro.
Both run Red Dead Redemption II and GTAV in 4K with quality maxed out at around 60 f.p.s. and the fans seem pretty much the same noise level... when they come on, which is intermittent on both. Neither gets overly hot. Frankly, I can't tell any difference between them in use. The iMac can go up to 5K without any frame rate difference, the Dell is maxed out at Ultra-HD but visually both look amazing.
I am currently installing Microsoft Flight Simulator 2020 on the iMac 5K, hoping that with run as well as the Dell.
Conclusion...for the first time (and I tried many) a Mac user with a copy of Windows10 and installing Boot Camp has the full PC gaming experience. It is ironic that the last few ever consumer Intel Macs are the first-ever IMHO to be on par with a reasonably serious gaming PC.
Nice gear you have there! I always liked playing games on the computer, but when Frontier dropped Mac support for Elite Dangerous, I bought a PS4. I saw that article this evening about Apple possibly building a controller for ATV, and the specs on ATV6 sound nice, but I can't see it catching up to the PS5 or whatever the new Xbox is called. The kind of games you mentioned would probably start an ATV on fire! Who knows though, maybe Apple has a few tricks up it's sleeve.
Comments
P.S. It's iPhone 6 hype all over again. People are filled to the brim with Apple envy!
The bottom line: Apple basically has been doubling its EPS every two to three years since 2009 (when I first started tracking it). Yes, part of that is due to share buybacks, but what’s the alternative use of their incredible cash flow? Buy other companies? Increase dividends? The best “company” Apple can buy is itself. And as has been pointed out many times, buybacks have serious advantages over dividends for long term holders. Apple will be in the neighborhood of $1,000/share in three years or less, with a lot less stock. Do the math.
(Hint: EPS right now is $12.57. That gives us an EPS of (2x12.57=) ~$25/share. In three years Apple will probably have the equivalent (pre-split) of 4 B shares. If P equals $1,000, P/E equals (1,000/25=) 40. Is a company that's been doubling its EPS every 2-3 years worth a P/E of 40? You betcha!
But its EPS for 2020 will be around double what it was for 2012, 8 years prior. The increase over the last 2 years will probably be between 5 and 15%. It’s actually had EPS declines every third year for 3 cycles now (i.e. in 2013, 2016, and 2019).
I’m not, btw, arguing against Apple’s value - just pointing out that it hasn’t been doubling its EPS every two to three years.
Constant incremental nflation hasn't been with us always.
I have set up a side by side:
I imagine the added shares don't actually get issued until the 31st? If they get issued and can be traded immediately after COB August 24th wouldn't that temporarily put the market cap at roughly $8T? (I know that SURELY can't be the case) What happens with shares purchased during the entire week between?
If you buy shares between the record date (August 24th) and the distribution date (August 28th), the trade will (if it's done through Nasdaq, and not as some kind of private trade) have attached to a kind of note which means that the seller owes the buyer the 3 extra shares. Those shares technically would go to the original owner (as of August 24th) on the distribution date (August 28th) and then, automatically from the traders' perspectives, would be transferred to the buyer.