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Though analysts have come to its defense this morning, Apple (AAPL -1.9%) can't catch a break -...
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Thursday, November 8, 2012, 10:58 AM ETThough analysts have come to its defense this morning, Apple (AAPL -1.9%) can't catch a break - shares now trade at 8.2x FY13E EPS (exc. cash). The decline comes as signs emerge Apple is taking new steps to vertically integrate: Digitimes reports Apple is now directly placing orders with material suppliers, who traditionally interact with manufacturers, and Horace Dediu theorizes Apple may have invested ~$2B in Sharp's display production. He also notes Apple's off-balance-sheet manufacturing/component purchase commitments have risen to $21.1B.
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This news story has 93 comments:
The situation in a nutshell: All the product that the buying public wants will be made and sold to it eventually, but WS wants it to happen when it wants it and punishes AAPL for not having many millions of iP5's on hand whenever someone wants to buy one instantly. In the long run, it is all MEANINGLESS, as all buyers will eventually get what they want and Apple will book all the revenue. This moronic WS emphasis ONLY on the short term is abjectly ridiculous, unrealistic and bonehead stupid by any rational and logical measure other than its own very shortsighted greed.
sorry, you need to qualify this statement: http://bit.ly/S0SI8H
the big time managers know all of this...they know that their is a short term easy to tell "bad" story, they know this stock has been clockwork in years past...it explodes up and drifts down/flat...it has higher and higher highs...
they know it will happen again...the PEG is .5 for crying out loud...
so they all sell...slowly ...every day...never a break...
and then when the weak hands are out....they turn it around...
buy at 300-400, sell at 550-700..... the only question is where they stop...it could easily be 500 by next week..
if you own 100 shares, hold them...buy 10 more... and if it goes to 500 or lower...buy 10 more... that's how you make money..its safer and easier to do it this way than to hold it at 700 and hope it goes to 800...
i own shares at 350, 390, 540 and 650.... i'm holding them...and if it hits 500 i'm buying more...
if you are"trading" the stock...you are screwed because there is no way to know or predict when the big guns make the calls that they are buying again...
Bingo!!! But APPLE people don't bleed either..They think they are different...It's time is up...Jobs death saw to that. Problems already arising out of the new product..
Jobs would have never let that happen!!
I know that I have nothing to do with it. I have held my shares for years and will look to add to my position.
I think if you follow the big boys, you will find the answer to your question.
I am an investor in Apple and have held it for years. I do not think that I am different and when I cut my hand, I did bleed, quite a bit actually.
You really think Apple's time is up? Perhaps you could tell that to the people who stand in line for their products. Tens of millions of products sold are telling a different story.
Who is making money on this?
Well, anyone smart enough and ruthless enough to lay at least $1 MIL USD down on the table, being fully prepared to kiss it goodbye without even blinking, that is "who " is making money.
That is TRUE investing, do not follow the lessons of wannabe "fantasy day traders" who treat the market as their personal online poker room, who cry "ad nauseam" about falling share price (APPL fans), because they didn't know when to get out.
It's not the iPhone 5 carrying REIT dividend guys, who can't afford the SUV or mortgage they barely make every month, hoping those crappy dividends they keep bragging about will allow them to order a pizza for the kids once a week, and golf on a municipal course with burnt up fairways and flooded greens.
You buy stock for control of a company, and hopefully, that control drives value and thereby increases share price. If it doesn't, then you run it into the ground on a short, ....again....., knowing when to get out.
Timing and chutzpah, that's the key.
So it's going to sell more iPhone 5's than the combined total of all iPhone's it has sold in the past? With competition strengthening?
That is absurd.
But Apple is "overowned" and stirs up a lot of emotion.
remember the so so girl that snubbed you and suddenly became very desirable...
That said, apple's stock has risen from the 300's to the 700's simply as a result of hedge funds. It is an easy stock to manipulate. They have since had their fun and have truned negative on the stock. You do realize that the powerful traders do pay handsomely to flood the media with negative articles. While the ipad 4, iphone 5 and the new mini are best in breed products, aapl will continue its slide $528 and then 458 are levels to look for. The mentality is that aapl does not have any new "omg" products in the pipeline. Right or wrong, the only thing that can get it moving up again is hedge funds getting back in and manipulating it to the upside.
Quite frankly, I believe that aapl has incredible poducts to drive it forward. The iphone 5 is an incredible device to use. Stable and flawless, built like a Patek Philipe. My Galaxy III really felt like a hunk of cheap plastic and it was frustrating to use between freezes and slow performance compared to the 5. The ipad 3 is by far the best tablet. Its speed, retina display and its smooth perfect operation make it a joy to use. The iPad 4 will be even better. Its use in business and education are just getting started and I highly doubt any of these arenas will select any other device, perhaps the Surface Pro, but that remains to be seen. The iPad mini is also an incredible product- beautifully built, so thin light and fast. Apple has a 14 day return policy. Pick one up, take it to your local Best Buy, Staple's etc. and compare it side by side to the Google Nexus 7 and the Fire HD. In my opinion, the Mini is light years ahead. For people looking for very high end products and not simple cheap products, Apple has no competiton. The only high end product on the horizon that could challenge it, is the Surface Pro. However, if Microsoft releases Office for the iPad, that will be a boon to Apple.
Apple has the best products on the market that people are lining up for. Their earnings will reflect this and perhaps the traders will move the stock back up. That mental level is $600. Short term the stock is extremely oversold and any good news will be met with buying.
In what ways? The Nexus 7 has better specs and a higher resolution screen. I know Apple guys like to say, "It's just better", but more and more this is proving to be false. Just because you like something more, doesn't make it "better".
Yes, Apple makes great products. But it's their marketing that is telling you that the competition sucks, that it's all cheap plastic, "freeze-up" junk. And it's patently false.
I've learned to dismiss the arguments of people who claim to have tried the competition, and describe it as horrible. No honest person could grab a top-of-the-line product of an Apple competitor and call it junk; that's delusional.
If Apple's customers get tired of waiting and buy something else the likely won't come back to Apple. Why should they reward them for poor performance? They won't.
He should be holding monthly sales updates.
The stock is now to big to benefit from sales secrecy.
Let it become a steady climber instead of this roller coaster.
Is he perhaps being payed by the hedge funds ?
Can you elaborate a little on what needs Samsung is satisfying.
I'm going to assume: they provide a touch-screen cell phone that can text, surf the internet, email, play videos and music and download applications. It's fast, feels good to hold, is durable and doesn't tie you into the Apple ecosystem.
This sell-off is not something we haven't seen over and over again. It's simply under new titles ("Fiscal cliff", "demand-supply", "management shakeup"..etc.) Many analysts benefit from this sell-off. It's how they make money. It's a very carefully controlled fear, and they will not allow themselves to destroy the number one stock without real signs of failures of Apple. It hurts them more than it hurts you. So relax a little. They will play the investors, but only long enough for them to accomplish their agenda and praise AAPL like never before.
This is a safety net pattern created to protect the knowledgable investor's gains in case of real fallouts on Apple's part. For example: if Apple started to fumble for valid reasons, such as decreased profits or growth (something that isn't likely to happen in the near future), so called "experts" would have a clear excuse that this is an established pattern and Apple isn't "falling", thus giving them enough time to pull their gains in. I repeat: there is no reason to freak out just yet.
Owning shares in this, with its cash accumulation characteristics, at this price, .... is a STEAL.
They are certainly not shorting the stock because, at this level, the financial risk is too high and the reputation risk of losing money while being short Apple would be enormous.
So they can only sell shares they already own. They wouldn't do that simply to force the stock lower because they lose money on the remaining shares they hold. More likely, they are simply trying to protect themselves against the down move and trying to get out faster than the others creates the stampede we are seeing.
If you believe in the company hold your nerve and keep cool. Use LEAP call options to establish a long term position without worrying too much about the short term drop.
Cramer coming on CNBC today and announcing that Isaacson (SJ biographer) told him that there is nothing in the Apple product pipeline, cant have helped....Cramer saying to sell...
Rough times for the stock, of this company with the largest share of the profits in both smartphones and tablets....I guess profit doesn't matter to wall street....hmmmm
Although Cramer has more inside information then I'll ever hope to have, his opinion means absolutely NOTHING to me at this point in time. To think that Steve Jobs was the only smart guy in the room at the biggest company on earth, is ludicrous. So we are to believe that in the last 15 months since Jobs died, basically everyone at Apple has been sitting at work playing cribbage all day and doing nothing regarding future products? Come on. Steve Jobs may have been a marketing genius, but Tim Cook and the rest aren't complete morons.
This whole "Apple is crumbling" thing is starting to get a little ridiculous and frankly, the more often Jim Cramer appears on television, the less informed he appears and the more ridiculous he begins to sound.
http://bit.ly/JQCrnQ
Again, I hope this supports my point that there is nothing to freak about just yet. In fact, Cramer saying "sell" is positive news for the future. He is shorting.
Is Cramer ever right?
Cramer saying sell can only be good news for this stock. ;-\
In addition, no one argues that Apple's stock is expensive, based on today or next twelve months earnings. Throw out all the multiple analysis: 8x, 10x, 12x, it doesn't matter.
The question with a company like Apple (a consumer discretionary company) is what will sales and earnings be 5 or 10 years from now. Is this a stable business? Will they be making $50 EPS (or more) in 2016?
To that point you have two headwinds facing the company:
1) A number of its suppliers are in very weak positions. Operating profits have been inflated at Apple because their suppliers have charged less than it costs for them to run their businesses and are now on the edge of insolvency (Sharp). Now Apple has to step up and directly invest in their businesses (or the capital equipment to run them).
In reality, these investments should be amortized backwards into historical operating results to get a real economic picture of profitability. This is a common game played with suppliers where they undercharge for the good they supply, inflating profits at the buyer, the buyer then makes a loan or equity investment, writes it off in one quarter down the road as a "one-time" item and their business looks more profitable than it is. If you go up and down the supply chain at Apple, it is probably billions per year that they underpaid compared to where they needed to be, in order to keep those businesses viable. The quick fix is to replace the depreciation line with capex + invesments, for 2012 this would boost the PE by nearly 2 points.
2) Apple's products are near parity with competitors. It is senseless to continue arguing this point by looking at technical details, plastic versus aluminum, this map provider versus that, etc. All you end up with is a big list of pros and cons and every individual picks 2 or 3 they think are personally important and declare a winner. Instead, just look at the sales: flagship Samsung phones = iPhones (within 10-20%). Are the 50 million+ people that have bought flagship Samsung phones over the past year all complete idiots? I don't think so. You buy the phone with a total feature set that works best for you, within your personal time constraints and interest level to research such a purchase. This means you have a company that went from owning a market, to sharing a market and this makes the future different from the past which also means taking a multiple on past earnings is an incomplete guide, at best.
Finally, Apple is both an investment and a trading vehicle -- if you are think about what Apple's share price will be 30 days or 90 days for now, throw out everything written above, it doesn't matter in the least. Stock could pop 10% or go down 10% more with nothing changing about its fundamentals, it is purely at this point about perceptions.
To your second point. Smart phones and tablets are not "consumer discretionary." They are an integral part of peoples lives and most people would do without many things before giving up their smart phones and tablets. The are clearly consumer staples.
To your third point about parity. Perhaps you could make this argument if you were simply talking about hardware. But that would ignore the ecosytem, which is HUGELY relevant. AAPL is closing in on 1 million apps and has the most mature ecosystem in the industry. In mobile computing its all about the apps. Apps on an andriod tablet display like a blown-up smart phone. Absolutely no comparison. There is also no comparison with the interoperability of devices within the the AAPL ecosystem. And, of course, AAPL has the best customer service in the industry and a store infrastructure that acts constantly running T.V. commercial for the brand as well as a support system for all in the AAPL ecosystem. Hardly parity.
Again, you are just selecting a few key features you either perceive as important or are actually important to you. Now we are supposed to get into a debate about ecosystems and I will give my opinion and you will reiterate yours. It doesn't matter. Just look at the numbers, the two leading companies are selling roughly equal numbers of flagship phones, implying they are probably equally "the best". The real point about about my first comment was not explained well, but what I mean is focusing on which handset is the best isn't going to help you make money on this stock. It is useless mental exercise and a distraction from what matters (although I am not saying don't analyze the products at all, but making modest distinctions that apparently are not influencing sales isn't helpful).
There is never a good opportunity to invest in manufacturing for a company like Apple. They don't want to manufacture because the economics are poor. They are doing it because they have to. If they could keep the status quo they would. The result is that returns on capital will suffer. I would also argue that even today they are substantially underinvesting in the smartphone market. They are slowing product launches to maximize returns on capital and not investing enough in production capacity from the beginning. Samsung will have a Galaxy S 4 in 3-4 months, they are just moving at a faster pace. Apple had a head start but it is shrinking. Three years ago, Samsung was a joke in terms of smart phones, a laughing stock really. Where will things be three years from now?
Apple has been working to try and get other suppliers such as LG, Sharp, and Japan Display (http://reut.rs/ZkW0ca) to take up the slack as they eliminate Samsung from their supplier list, and also to work with the new in-cell technology Apple developed.
Apple is a huge customer for any supplier, but is never able to buy anything below cost from suppliers unless they have already paid for it by other means, such as paying up front for facilities and expansion. They are capable of making deals with companies that their competitors can't, but it seems to have been profitable for suppliers as well, notably Qualcomm, Broadcomm, Samsung.
Fie- begone.
I was very late and bought in at 680. Not freaking out, but not exactly thrilled, either.
Just relax... buy on any sign of bullish reversal
I will wait until, it is time to load up again. One blow out quarter should do the trick. Asses like Gundlach etc., have all the money in the world, to drive the stock as far down as they see fit, so they can load up at the bottom. I hope they all get their nuts squeezed soon. Amen!
When stock is held by anyone . . . . not one penny is lost . . . . until the stock is sold.
Panic selling is an investors worst enemy.
The bulls are doing a small round of capitulating. That will stop the selloff for a short moment, but it will pick up again very soon.
of Osama's win. Bad times are coming.
Gold, guns and ammo
Soon you will have competition as well. Its America!! I remember the same being said about Cisco 10 years ago,,,,History does repeat.
Sold mine when the euphoria hit the stock a short time ago, plus expected a nice size market correction as well....Sales will eventually slow down with more people out of work...It might take some time but it will.
The Election BS is over, now back to reality folks..
Biochemist giving stock advice?? Sounds like a winner to me!!
Typical stock oversold !! Go lick your wounds..You wont see $700 for a long time if ever...It is called business decisions..
Looks like changing of the guard is a sign of problems ahead..You don't change if things are moving smoothly...
But go waste your money on it..
http://bit.ly/YU11cp
http://bit.ly/SDsOtC
If sales of Samsung consistently grow while sales of Apple consistently fall, that would be a sign of trouble. But the fact that the newer phone outsells the older phone is less a sign of the apocalypse and more a sign of a healthy and growing market for smart phones.
A growing smart phone market is exactly what will make Samsung and Apple successful in these endeavors.