Apple Is Trading At 60-75% Premium To Its Sum Of Parts Valuation [View article]
I agree. This is incredibly flawed. Consider the following:
A- You did not even take into consideration the fact that AAPL had $117 billion in cash for the quarter ending in June, and has since generated additional profits and cash
B- The current forward P/E ratio for Apple is not 15. You do not even provide a source. If you retrieve the average forward P/E multiple for next year from Yahoo Finance, which is $53.37 for the year ending September 2013, and using a closing price of $638.17, you get a forward P/E ratio of 11.96
C- You compare Apple to the average P/E ratio of companies whom Apple itself has caused them to almost be out of business, and then you claim Apple should trade at comparable ratio... This is most ridiculous! I guess if Apple had taken all business away from them, and caused them to have zero p/e, you would claim Apple should also have a P/E ratio of zero because the competitors average is zero....
9 Reasons Apple Shares Will Make New Highs, Again [View article]
koril that would depend on the strike,your risk profile and target, as these will affect the risk/reward analysis. It is my perspective that when buying short dated options, one is not necessarily acting as a long term investor. A major factor will be the upcoming earnings release later in October.
9 Reasons Apple Shares Will Make New Highs, Again [View article]
Many people, when quality and great user experience is associated with such brand, they actually do not mind having the Apple logo everywhere; as a matter of a fact, many people seek such objective.
From a very long term perspective it is true that one has to watch out for "logo fatigue". However, I believe such concept applies more to things such as clothing and accessories, whereby fashion changes quickly and is almost 100% associated with looks. In the case of Apple, certainly looks help, but it is also about integration, features, and user experience....
9 Reasons Apple Shares Will Make New Highs, Again [View article]
Johndoe1 it is true that it seems Apple shares typically do not price good news fully in, given its attractive P/E multiple, its massive cash holdings, and the consistent popularity of its products. Yet, exaggerated fears are often taken into account...
9 Reasons Apple Shares Will Make New Highs, Again [View article]
Chuck Rappaport it is a function of probability, risk profile and objective. My own perspective is that current levels are quite attractive, and with my ultimate objective is for Apple shares to reach $800 or beyond, I personally would prefer not to miss a potential of over $163 to the upside for the sake of an additional $33.
9 Reasons Apple Shares Will Make New Highs, Again [View article]
goofydon, it is sometimes difficult to determine what drives consumers' brand preference.
It is also a personality matter; as Canadian Red Neck states, he is brand indifferent, while someone else may be an Apple believer.... In any case, what ultimately matters is user experience; from a design perspective, functionality perspective, integration usability, etc... On such fronts, Apple has excelled, and although it has had some hick-ups, it has always acknowledged its shortcomings, addressed them and fixed them.
9 Reasons Apple Shares Will Make New Highs, Again [View article]
Thank you for your comment Canadian Red Neck. Naturally, Apple products are not as pricey as Rolls Royce etc... However, on a relative basis, when one can spend as little as $30 on a cell phone, but chooses to spend as much as $700 instead, it certainly has to do with the functionality, but it also has to do with status...
One must remember that status is not reserved to the ultra-wealthy. For example, students who are in middle school and high school also feel they must have the iPhone; it has to do with their "peer status"...
9 Reasons Apple Shares Will Make New Highs, Again [View article]
It does make sense for Apple to invest in its suppliers in order to provide production capital. As far as buying a supplier outright, it is actually better for Apple to stick to its own business, as it may not be best suited for actually managing a manufacturing facility in China or elsewhere...
9 Reasons Apple Shares Will Make New Highs, Again [View article]
Thank you for your comment Bugsyjak. Indeed Apple products do create a multiplier effect; you start with one, and due to the positive experience, you find yourself buying other Apple products, as well as upgrading to newer models....
9 Reasons Apple Shares Will Make New Highs, Again [View article]
You make some good points richbar. However, as per article, combined with all other factors listed, I do believe that earnings will be above the average of $53/share, which will also imply forward growth above your stated 10% level.
By the way, to me the most important information provided by examining trailing 5 years growth is an indication of a company's ability to execute and deliver; it is a track record. Meanwhile, I rely predominantly on forward P/E ratio for valuation purposes.
Apple Is Trading At 60-75% Premium To Its Sum Of Parts Valuation [View article]
A- You did not even take into consideration the fact that AAPL had $117 billion in cash for the quarter ending in June, and has since generated additional profits and cash
B- The current forward P/E ratio for Apple is not 15. You do not even provide a source. If you retrieve the average forward P/E multiple for next year from Yahoo Finance, which is $53.37 for the year ending September 2013, and using a closing price of $638.17, you get a forward P/E ratio of 11.96
C- You compare Apple to the average P/E ratio of companies whom Apple itself has caused them to almost be out of business, and then you claim Apple should trade at comparable ratio... This is most ridiculous! I guess if Apple had taken all business away from them, and caused them to have zero p/e, you would claim Apple should also have a P/E ratio of zero because the competitors average is zero....
D- There is no point in me going any further....
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
From a very long term perspective it is true that one has to watch out for "logo fatigue". However, I believe such concept applies more to things such as clothing and accessories, whereby fashion changes quickly and is almost 100% associated with looks. In the case of Apple, certainly looks help, but it is also about integration, features, and user experience....
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
It is also a personality matter; as Canadian Red Neck states, he is brand indifferent, while someone else may be an Apple believer.... In any case, what ultimately matters is user experience; from a design perspective, functionality perspective, integration usability, etc... On such fronts, Apple has excelled, and although it has had some hick-ups, it has always acknowledged its shortcomings, addressed them and fixed them.
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
One must remember that status is not reserved to the ultra-wealthy. For example, students who are in middle school and high school also feel they must have the iPhone; it has to do with their "peer status"...
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
9 Reasons Apple Shares Will Make New Highs, Again [View article]
By the way, to me the most important information provided by examining trailing 5 years growth is an indication of a company's ability to execute and deliver; it is a track record. Meanwhile, I rely predominantly on forward P/E ratio for valuation purposes.