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Who knows whether Apple (AAPL) is over- or underpriced - different investors can come to...
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Saturday, April 21, 2012, 8:10 AM ETWho knows whether Apple (AAPL) is over- or underpriced - different investors can come to different valuations - but after the week it's had (down 6% in three days, and 10% off its high), maybe you should look at paring that position (and considering how much Apple moves major indexes, you may own a lot more than you think).
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From yahoo...
Trailing P/E (ttm, intraday): 16.31
Forward P/E (fye Sep 24, 2013) 11.26
PEG Ratio (5 yr expected) 0.69
If you are making the case for overvalued as an example try PCLN. AAPL has a moat and pricing power too where PCLN will soon be replaced by multiple competitors including hotels, airlines, etc. that constantly continue to improve their websites.. Can you see anyone anytime soon replacing apple products? Seems like nobody has successfully entered tablet space vs. Apple. It is incredible phones are essentially becoming personal assistants, GPS, etc. and Apple makes the best and most dominant.
I could be wrong but I am buying more AAPL as I think news has been particularly negative but the VALUE of AAPL has not changed much. For example e-books suit vs. AAPL is negligible on AAPL's bottom line. I mean really isn't e-books like 1/2000000000 of AAPL's bottom line?
Why the risk?
I took profits and will wait this one out-----extending when you have a great return....may turn into a way to give some back....
That would be silly.
Good trading
Will Apple report another great quarter on Tuesday? Maybe? But to me, deciding what to do based on Tuesday's number is incredibly shortsighted. Buying Apple stock is an investment - not a trade. Because this story shows absolutely no long term price degradation.
Long AAPL and probably will buy more under $550
And apple stays down for a few weeks, everyone panics, then it proceeds to new highs.
Every year.
Jeez.
Long apple.
Looking at the FACTS:
AAPL went up from 420 to 644 because
1. People expected another blowout 2Q12 --- not necessarily as good as 1Q 12, but similar earnings growth over 2Q11
2. People expected a blowout 2012 Annual growth over 2011
Then, AAPL dropped from 644 to 558
1. NOT because of fundamentals.
AAPL dropped from 644 to 563 because
1. VZ (holy smokes, if everybody else dropped the same amount, and China didn't .....)
2. Ensuing Panic selling
Now lets look at the facts:
1. AAPL has NEVER come in under guidance.
2. AAPL has ONLY issed the most optimistic comments about their prospects.
3. AAPL announced a dividend and a stock buy back.
4. Subsequent to the VZ earnings, analysts have been predicting 2Q earnings to come in significantly below earnings.
Now. If AAPL was to come in BELOW guidance, don't u think they have to warn ahead of time, or risk being sued?
Irrelevant? Mid 400s? Ur scientific acumen is truly amazing. If u really believe that to be true, you should buy AAPL Puts, and just hang on to them until AAPL drops to that price.
Or are u even in the market?
I don't own it but do not see it as overpriced and am considering to buy in here. The only issue I had with them was their lousy cash allocation strategy.
It is strange - if they split 10 for 1 then suddenly I bet everyone who thinks it is expensive would believe it was cheap again
The price is an optical illusion it is a classic expample of mass System 1 thinking. (if you don't know what I mean read Thinking fast and slow by Kahnemann)
E
Ignoring the chart and focus on the fundamentals, one would realize AAPL isn't overpriced. People who use charts to trade AAPL miss the basic math since they are to lazy to use Kahneman's "System 2" thinking.
AAPL's ecosystem and international opportunities are under appreciated. Applying a low 12x P/E to conservative $50 calendar 2013 EPS and adding excess after-tax EOY'12 cash of about $45 gives you a year end $645, which is 13% above the current $573.
Potentially, you could see 37% upside to $786 (13x $57 C2013 EPS + excess a/t cash), but I use the more conservative $645 price target to determine buy points.
Hopefully "system 1" thinking will persist before earnings to give "system 2" thinkers another opportunity to buy AAPL.
"Turning a stock chart upside down tells me the exact same thing - nothing"
- Warren Buffett
+20% growth per year X 4 quarters per year on a $570 Stock gives you a forward PE of UNDER 10 best in large cap tech plus we got back a nice dividend. Pullbacks of 10-15% are healthy rest periods we bought some at $572 last week and will not sell irrational fear
only failure of fundamental analysis.On average the Braeburn Group Index participants anticipate the following revenue, expense and eps results:Revenue 43,543,517,467 76.53% YOY GrowthGross Margin 19,450,959,577 44.67% of Revenue
OpEx -3,309,360,667 7.60% of Revenue
OI&E 150,466,667Pre-Tax Income 16,292,065,577 37.42% of Revenue
Tax Expense -4,040,929,363 24.80% Tax Rate
Net Income 12,251,136,214 28.14% of Revenue
Unless these figures change materially big pullbacks are always buys for us.
Last had one last September bought it and did well.We have noticed big trading pools
trying to shake the weak hands out projected before blockbuster earnings to get a great entry.EPS 12.99 102.97% YOY Growth projected.This is not a broken stock APD
Does anyone see a pattern here? It's always the easiest thing for people to say "the sky is falling" because they only have to be right once to then say "see... I told you so". Apple is the "big dog" in tech and because of that you always have people trying to take shots at what is CURRNTLY the single greatest manufacturer of ANYTHING in the United States - if not the entire world. Just focus on P/E, future growth and forthcoming product releases and you'll know what to do.
Just my .02
And this obsession with the price as a wrong number makes no sense. People panicked when Berkshire Hathaway broke $1000 a share, gave every reason in the book as to why it would revert to the mean. It is now $120,000 a share. There is no "right" number. Just go on the fundamentals.
So I'm a net 30% to the plus side and the p/e has compressed.
Now why would I sell?
That being said, I think that AAPL will beat Wall Street consensus of 10.00 EPS. By how much is the magic question- everyone is pretty much anticipating a slam dunk earnings report.
Is there room for upside potential on Tues? Definitely. But I do think its possible that the selloff could continue if Apple reports earnings of lets say 10.15/share. I mean that is fantastic YOY growth but I really dont think it will be enough to satisfy.
Personally, I think it will be a nonissue and EPS of at least 11.50+ will be reported, but the only people who know for sure what AAPL's going to report are Cook and Oppenheimer. All we can do is guess.
Long Apple and buying more Monday. And then Weds. And when it hits a PE of 2, I'll really load up.
Please let me know your favorite quality companies that are a much better deal than AAPL.
I look forward to your response.
Anyone know what requirement that should be met to sell put in a given stock? What strike price to use? What expiration date? How to calculate risk of assignment? Thanks
They promised 70-300% return. They frolic with my investment, and I lost 5 grands within a few month in options trading.
If u thing that Apple sill has room to the Upside, growth , products to anounced and still innovate something, .. Buy!...
CLEAR AS WATER!
P/Es in double digits are bubble territory... Just saying. Have fun with what's coming.
What a ridiculous statement! Personally I think there sure is a world of difference between a stock (any stock) that has a 10 P/E and one that has a 99 P/E. I'd be hard pressed to find anyone who thought that a conservative company like MMM is currently operating in a bubble even with it's "bubble" P/E ratio.
Just saying.