Apple By The Numbers - No Smoke, No Hype [View article]
rcwahlert
Here's the two sides of that issue as I see it:
Pros: While a split doesn't "add value" per se, it would open up the shares to a number of new retail investors who might otherwise avoid the offering since the stock appears "expensive." Furthermore, a lower share price would increase trading and therefore improve the number of investors and traders engaged in the stock. That could potentially lift the share price.
Cons: Buying an "odd lot" (less than a hundred shares) no longer has additional cost or stigma associated to it; investors can currently buy as few a number of shares they want or can afford. A split creates no value for existing shareholders: the time and trouble to administer it isn't worth the time. The stock is plenty liquid now. Since nearly two thirds of the stock is owned by institutional investors already, splitting the shares won't move the needle. A split could also open the door to more small investors seeing a chance to trim their AAPL position in "round lots."
On the whole, I think the Cons outweight the Pros. I do not believe the current $700 per share price has compressed the multiple. Splitting the stock could lead to more investors and traders dealing the shares, but I think a case could be made that sellers as well as buyers could be influenced by it.
Apple By The Numbers - No Smoke, No Hype [View article]
kwm3
Interesting comments.
Apple's P/E multiple trends showed an increase in 2009, flat in 2010, down in 2011, and a clear upward bias in 2012. (The January P/E was about 12X; it moved up to a high of 17X in March, then dropped a bit before ramping back up on the latest upswing to as high as 16.5X last week.)
Volume and buyers are rational arguments. However, I suggest the initiation of a cash dividend opened up a new legion of institutional investors: those who are required to invest in dividend payers.
Eventually "buyer fatigue" could be at issue. AAPL shares have appeared to avoid this phenomenon thus far. One rationale could be that many many Apple shareholders are "traders" versus "investors." They flit in and out of the stock and try to game short-term movement. This tends to add liquidity.
I eyeballed the three year volume chart: one might conclude that volume has declined (a little) versus three years ago. One could also argue that overall market volume has done the same.
Apple By The Numbers - No Smoke, No Hype [View article]
georgesoram
We have all kicked ourselves about a stock we did or didn't own at some point. Sometimes I consider myself a village idiot. Then I read Peter Lynch's "One Up On Wall Street" and feel a little better. One doesn't have to catch every line drive: Lynch says just getting six of ten right is "star" status. Let's hang in there!
Apple By The Numbers - No Smoke, No Hype [View article]
Thanks Judoka
I like to listen to some of the talking heads on TV, too. However, at the end of the day, I do my own investment analysis. Then I have no one to congratulate or blame but myself.
BTW, I like Cramer. Do I believe everything he says? Of course not! But I do find some of his commentary insightful; and much of his "schtick" entertaining.
Apple By The Numbers - No Smoke, No Hype [View article]
User 427801
Your beginning statement is largely correct. Companies, particularly the size of Apple, cannot grow exponentially forever. The "law of large numbers" kicks in.
This may be the reason the multiple has remained so low over the past few years: analysts and investors just could not get their head around how an enterprise so big can grow so fast.
Eventually, they will all be correct. Apple's growth will level out.
Apple By The Numbers - No Smoke, No Hype [View article]
Hi solucky
My investment thesis is that the next five years will see a significant reduction in EPS growth: I suggested 20 percent per year going forward. The previous 5-year actuals have shown a 65 percent per year increase. Apple made $4.04 per share in FY 2007.
I would not expect AAPL to maintain either their top or bottom-line growth rates. The company is getting too large. However, that still leaves ample room for considerable growth in EPS plus a now-instated dividend: a bit of an equity-income model, with the clear emphasis remaining upon growth.
Apple By The Numbers - No Smoke, No Hype [View article]
Applocrat
Your thoughts are spot-on. As an investor, parsing each news release and attempting to extrapolate them into future macro financial and business results is time-consuming and not likely to add much value to the investment thesis. In this particular case, you have pointed out that apparently the map issue has a relatively painless fix.
Apple has a particularly charged emotional component (or aura) around the the company and while this benefits sales via creation of a good-natured cult following, it should be eyed cautiously by the investor. AAPL stock is still just a "piece of paper."
Owning the security, as with any security, if typically best situated for those having performed routine "cold eyes reviews."
That said, I suggest that Apple is arguably the best manufacturing and supply chain enterprise on the planet.
Apple By The Numbers - No Smoke, No Hype [View article]
quincy99
Perhaps today's early selloff was an opportunity for the investor?
I have elected to OWN Apple stock as an investment for years, not TRADE it. Indeed, short-term blips up and down based upon the latest sound bites have not influenced my overall view of the long-term thesis.
Please note I stand corrected on the iPhone5 sales: I reported 8 million initially sold based upon a news release. This was incorrect. It has "only" been 5 million units. Now I read this was due to only stock supplies for 5 million units. The differential three million units sold out of the gate does not change the underlying investment thesis: it's a data point for short-term traders. It may also delay the catalytic effect of the new release.
Good plug for a best-of-breed bank. While the numbers are strong, one of the strengths of Wells Fargo is their simple business model. One in three mortgages are serviced by the company.
Energy Transfer Partners: An Opportunity To Earn 4.9% In 4 Months Or An Entry Of $40.50 [View article]
A $48 per unit price is reasonable based upon yield. DCF (Distributable Cash Flow) determines the yield. The pending deal and associated secondary unit offerings appears to be a driver for holding down the unit price for now. (See Sch comment below).
Apple By The Numbers - No Smoke, No Hype [View article]
Here's the two sides of that issue as I see it:
Pros: While a split doesn't "add value" per se, it would open up the shares to a number of new retail investors who might otherwise avoid the offering since the stock appears "expensive." Furthermore, a lower share price would increase trading and therefore improve the number of investors and traders engaged in the stock. That could potentially lift the share price.
Cons: Buying an "odd lot" (less than a hundred shares) no longer has additional cost or stigma associated to it; investors can currently buy as few a number of shares they want or can afford. A split creates no value for existing shareholders: the time and trouble to administer it isn't worth the time. The stock is plenty liquid now. Since nearly two thirds of the stock is owned by institutional investors already, splitting the shares won't move the needle. A split could also open the door to more small investors seeing a chance to trim their AAPL position in "round lots."
On the whole, I think the Cons outweight the Pros. I do not believe the current $700 per share price has compressed the multiple. Splitting the stock could lead to more investors and traders dealing the shares, but I think a case could be made that sellers as well as buyers could be influenced by it.
Apple By The Numbers - No Smoke, No Hype [View article]
Interesting comments.
Apple's P/E multiple trends showed an increase in 2009, flat in 2010, down in 2011, and a clear upward bias in 2012. (The January P/E was about 12X; it moved up to a high of 17X in March, then dropped a bit before ramping back up on the latest upswing to as high as 16.5X last week.)
Volume and buyers are rational arguments. However, I suggest the initiation of a cash dividend opened up a new legion of institutional investors: those who are required to invest in dividend payers.
Eventually "buyer fatigue" could be at issue. AAPL shares have appeared to avoid this phenomenon thus far. One rationale could be that many many Apple shareholders are "traders" versus "investors." They flit in and out of the stock and try to game short-term movement. This tends to add liquidity.
I eyeballed the three year volume chart: one might conclude that volume has declined (a little) versus three years ago. One could also argue that overall market volume has done the same.
Apple By The Numbers - No Smoke, No Hype [View article]
We have all kicked ourselves about a stock we did or didn't own at some point. Sometimes I consider myself a village idiot. Then I read Peter Lynch's "One Up On Wall Street" and feel a little better.
One doesn't have to catch every line drive: Lynch says just getting six of ten right is "star" status. Let's hang in there!
Apple By The Numbers - No Smoke, No Hype [View article]
I like to listen to some of the talking heads on TV, too. However, at the end of the day, I do my own investment analysis. Then I have no one to congratulate or blame but myself.
BTW, I like Cramer. Do I believe everything he says? Of course not! But I do find some of his commentary insightful; and much of his "schtick" entertaining.
Apple By The Numbers - No Smoke, No Hype [View article]
Your beginning statement is largely correct. Companies, particularly the size of Apple, cannot grow exponentially forever. The "law of large numbers" kicks in.
This may be the reason the multiple has remained so low over the past few years: analysts and investors just could not get their head around how an enterprise so big can grow so fast.
Eventually, they will all be correct. Apple's growth will level out.
When that happens is another question.
Apple By The Numbers - No Smoke, No Hype [View article]
Apple By The Numbers - No Smoke, No Hype [View article]
My investment thesis is that the next five years will see a significant reduction in EPS growth: I suggested 20 percent per year going forward. The previous 5-year actuals have shown a 65 percent per year increase. Apple made $4.04 per share in FY 2007.
I would not expect AAPL to maintain either their top or bottom-line growth rates. The company is getting too large. However, that still leaves ample room for considerable growth in EPS plus a now-instated dividend: a bit of an equity-income model, with the clear emphasis remaining upon growth.
Apple By The Numbers - No Smoke, No Hype [View article]
Your thoughts are spot-on. As an investor, parsing each news release and attempting to extrapolate them into future macro financial and business results is time-consuming and not likely to add much value to the investment thesis. In this particular case, you have pointed out that apparently the map issue has a relatively painless fix.
Apple has a particularly charged emotional component (or aura) around the the company and while this benefits sales via creation of a good-natured cult following, it should be eyed cautiously by the investor. AAPL stock is still just a "piece of paper."
Owning the security, as with any security, if typically best situated for those having performed routine "cold eyes reviews."
That said, I suggest that Apple is arguably the best manufacturing and supply chain enterprise on the planet.
Apple By The Numbers - No Smoke, No Hype [View article]
Perhaps today's early selloff was an opportunity for the investor?
I have elected to OWN Apple stock as an investment for years, not TRADE it. Indeed, short-term blips up and down based upon the latest sound bites have not influenced my overall view of the long-term thesis.
Please note I stand corrected on the iPhone5 sales: I reported 8 million initially sold based upon a news release. This was incorrect. It has "only" been 5 million units. Now I read this was due to only stock supplies for 5 million units. The differential three million units sold out of the gate does not change the underlying investment thesis: it's a data point for short-term traders. It may also delay the catalytic effect of the new release.
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I believe you responded to another commentator or question above. My query had to do with PECO's reduced YoY revenues!