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Though analysts have come to its defense this morning, Apple (AAPL -1.9%) can't catch a break -...

Though 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.
Comments (93)
  • bobbobwhite
    , contributor
    Comments (1961) | Send Message
     
    My god! Apple is having literally overwhelming response to its iP5 and cannot keep up with demand and this is perceived to be a problem with the company and the stock is selling off due to it? WHAT? Apple is doing everything it can to ramp up for fantastic product demand and Wall Street sees that as a negative? Incredible!

     

    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.
    8 Nov 2012, 11:12 AM Reply Like
  • 215304
    , contributor
    Comments (595) | Send Message
     
    bobbobwhite, I couldn't have said it any better. Apple's PEG is now below .5, the company's products are flying off the shelves faster than they can be produced, the iPhone 5 will be the highest selling cell phone of all time by far, yet the stock is being sold off. This past quarter Apple was the only large cap technology stock to post significantly higher year over year revenue and earnings, yet all the focus was on the minor $.16 earnings "miss" from analysts estimates. Wall St. rewards Amazon with a P/E over 2,000, it's PEG is in outer space, even though it reports lower revenue year over year, much lower earnings (a sizable loss) year over year, and 8 quarters in a row of declining year over year earnings. I guess it makes sense if you live in Bizzaro World.
    8 Nov 2012, 11:25 AM Reply Like
  • lakofsth
    , contributor
    Comments (96) | Send Message
     
    "the iPhone 5 will be the highest selling cell phone of all time by far"

     

    sorry, you need to qualify this statement: http://bit.ly/S0SI8H
    8 Nov 2012, 12:40 PM Reply Like
  • what do I know
    , contributor
    Comments (1049) | Send Message
     
    I agree ( this is the model that Dell uses to supply to buyers when they need it ) with what you are saying but the "shorts" are charning the stock to a deaths spiral. Where will it end? Where is the beef to this wonderful performance of Apple?
    8 Nov 2012, 01:52 PM Reply Like
  • Jack Baker
    , contributor
    Comments (875) | Send Message
     
    I'll qualify it for him. AAPL will sell more that 250,000,000 iphone 5's. Count on it.
    8 Nov 2012, 02:04 PM Reply Like
  • Apple Forever
    , contributor
    Comment (1) | Send Message
     
    It appears to me that WS is manipulating the price of the stock to generate activity in the stock. Someone is making money on this! Who?
    8 Nov 2012, 02:04 PM Reply Like
  • KISS_investor
    , contributor
    Comments (326) | Send Message
     
    Here's how it works...remember that even for large cap stocks, the only price changes are based on when people sell and buy on any given day..

     

    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...
    8 Nov 2012, 02:16 PM Reply Like
  • css1971
    , contributor
    Comments (870) | Send Message
     
    You don't understand. The market is forward looking it has already priced in the iPhone 5 and is looking beyond. It doesn't like what it sees.
    8 Nov 2012, 03:15 PM Reply Like
  • lakofsth
    , contributor
    Comments (96) | Send Message
     
    @Jack Baker - so according to that page there were 37M 4S sold 2011-2012. You think there will be over 6x this many 5 sold? Why?
    8 Nov 2012, 04:55 PM Reply Like
  • ginatrader
    , contributor
    Comments (6) | Send Message
     
    I agree, sometimes I really think the high-frequency traders, or someone is driving AAPL down until we all capitulate and sell, then 2 days later, it will go up 50 bucks. In the meantime, it's hard to know what to do. If in options, it's hard to juggle!
    8 Nov 2012, 05:16 PM Reply Like
  • ginatrader
    , contributor
    Comments (6) | Send Message
     
    Good question, I feel the same.
    8 Nov 2012, 05:16 PM Reply Like
  • 215304
    , contributor
    Comments (595) | Send Message
     
    Should have said smart phone.
    8 Nov 2012, 05:41 PM Reply Like
  • Interesting Times
    , contributor
    Comments (9672) | Send Message
     
    CSS

     

    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!!
    8 Nov 2012, 06:08 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5056) | Send Message
     
    Institutions are making money on the stock. Hedge Funds and Mutual Funds who hold millions of shares are moving the bar on Apple.

     

    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.
    8 Nov 2012, 09:46 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5056) | Send Message
     
    Mr. Jobs never saw the share price anywhere near this range. There is nothing "happening." If a $70 stock dropped to the mid $50 range and had the fundamentals of Apple, would anyone say a word?

     

    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.
    8 Nov 2012, 09:54 PM Reply Like
  • Sal Marvasti
    , contributor
    Comments (1364) | Send Message
     
    Apple is being treated as a pc maker http://seekingalpha.co...
    9 Nov 2012, 03:25 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Every stock's share price is manipulated, that's how the market works, write that down.

     

    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.
    9 Nov 2012, 05:18 AM Reply Like
  • dnorm1234
    , contributor
    Comments (702) | Send Message
     
    >I'll qualify it for him. AAPL will sell more that 250,000,000 iphone 5's. Count on it.

     

    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.
    9 Nov 2012, 08:31 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    250 Mil iPhone 5's only to Chinese people, Americans, (especially the "99% 'ers") can't give out $699 for a cell phone.
    12 Nov 2012, 03:17 AM Reply Like
  • Misho ILIEV
    , contributor
    Comments (542) | Send Message
     
    A good point, deercreekvols, there's so many companies which report healthy growth and their stock doesn't move or goes down and there is no fuss about it. It's just part of the game.

     

    But Apple is "overowned" and stirs up a lot of emotion.
    17 Nov 2012, 02:46 AM Reply Like
  • JUDOKA
    , contributor
    Comments (406) | Send Message
     
    A selling mania feeds on itself.There can be many reasons.Profit taking at the 15% LTCG rate.Rebalancing.FEAR!... company is still making a lot of $$ and is paying a reasonable dividend which has the capacity to grow.My biggest hope right now is that the company is executing its buyback at these prices.I am not a Buffet fan(Warren;not Jimmy),but he has a great adage."Be fearful when others are greedy.Be greedy when others are fearful.
    8 Nov 2012, 11:31 AM Reply Like
  • nebrot
    , contributor
    Comments (21) | Send Message
     
    One can only agree with white and 304.... and human nature being what it is the iphone scarcity may well be a plus...if its difficult to get ,you want it even more...
    remember the so so girl that snubbed you and suddenly became very desirable...
    8 Nov 2012, 11:43 AM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    feels like capitulation but of course I thought that at @ 620's ....It does take conviction to buy when others are fearful......I do respect WB for that...he always seems to come up with some dry powder for those times
    8 Nov 2012, 11:46 AM Reply Like
  • Momintn
    , contributor
    Comments (3680) | Send Message
     
    Largest open interest on AAPL options expiration tomorrow is at $550 and AAPL will gravitate there by tomorrow. Next Friday, either $550, $570, or $600.
    8 Nov 2012, 11:49 AM Reply Like
  • $vix
    , contributor
    Comments (396) | Send Message
     
    This debate could go on forever, and infact, it has. With respect to apple's products, I have tried the Samsung III, the Google Nexus, The Fire HD and the Nook HD. I also own an iphone 5, an ipad 3 ( 4 is on order ), and an iPad mini. In my opinion, these products are not only far superior, but they provide for an incredibly enjoyable user experience. Its hard to put these devices down and i lokk forward to using them. I can't say the same for the others. Apple products are the finest.
    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.
    8 Nov 2012, 11:53 AM Reply Like
  • dnorm1234
    , contributor
    Comments (702) | Send Message
     
    > and compare it side by side to the Google Nexus 7 and the Fire HD. In my opinion, the Mini is light years ahead.

     

    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.
    9 Nov 2012, 08:47 AM Reply Like
  • earlalbin
    , contributor
    Comments (97) | Send Message
     
    No just because demand is here today doesn't mean it will be there tomorrow. People could get tired of waiting and buy something else. Also there is a marketing window that closes and when it closes is not up to Apple. Other manufacturers will come up with something new/better/cheaper and all of those unsold phones will be just that unsold.

     

    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.
    8 Nov 2012, 11:56 AM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    like rim bb10 haha....
    8 Nov 2012, 11:58 AM Reply Like
  • who?
    , contributor
    Comments (106) | Send Message
     
    The fault lies with Tim Cook.

     

    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 ?
    8 Nov 2012, 11:56 AM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    really conspiracy. hedge funds payolla.....please, I.m sure Tim Cooks 600 million is enough to provide a few meals and pay his rent....
    8 Nov 2012, 12:00 PM Reply Like
  • dab3z
    , contributor
    Comments (312) | Send Message
     
    Monthly sales updates? Give me a break. Google and Amazon don't even release any sales figures.
    8 Nov 2012, 12:04 PM Reply Like
  • brentn
    , contributor
    Comments (55) | Send Message
     
    The recent market action on Apple has little to do with performance and everything to do with the outcome of the election and the fiscal cliff. Most stocks with significant gain in 2012 have been sold off at a "known" 15% capital gains rate. Who knows what it will be in 2013? Does anyone have faith the President/Congress will work out an agreement without major drama and pain for the market? There is much more downside risk than upside potential right now.
    8 Nov 2012, 12:03 PM Reply Like
  • warrenrial
    , contributor
    Comments (558) | Send Message
     
    Since I switched to Samsung I find it meets all my needs and no reason I should switch back to Apple.
    8 Nov 2012, 12:06 PM Reply Like
  • milindshastri
    , contributor
    Comment (1) | Send Message
     
    I have been thinking of doing the same because even though Apple is said to be an undervalued stock w a PE ~12 , its recent ups and mostly downs have not been very useful for me as a AAPL bull options investor.

     

    Can you elaborate a little on what needs Samsung is satisfying.
    8 Nov 2012, 02:18 PM Reply Like
  • dnorm1234
    , contributor
    Comments (702) | Send Message
     
    >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.
    9 Nov 2012, 08:53 AM Reply Like
  • davemet
    , contributor
    Comments (36) | Send Message
     
    To new investors out there: it's understandable that you are not feeling very comfortable with the recent downs, but you still shouldn't turn on your "freakout" mode just yet.

     

    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.
    8 Nov 2012, 12:06 PM Reply Like
  • bondstevenbond
    , contributor
    Comments (159) | Send Message
     
    Horace's assumptions upon Apple's capex forecast imply upcoming 2012 sequential annual growth of 56%. Nice! Jeffrey Gunlach is about to get squeezed and should stick to mortgage bonds! SOLD MORE PUTS HERE ;)
    8 Nov 2012, 12:33 PM Reply Like
  • Jack Baker
    , contributor
    Comments (875) | Send Message
     
    Jeffrey Gunlach showed his abject ignorance when talking about AAPL. He knows nothing about what makes AAPL AAPL. Also, he shorted in APRIL and rode it up to 705 in the rally. Who knows where he covered. Less than 1% of AAPL stock has been sold short right here. So, old Jeffrey boy has little company in his flawed, delusional thesis.
    8 Nov 2012, 02:11 PM Reply Like
  • Ed's perspective
    , contributor
    Comments (254) | Send Message
     
    if opportunity knocked could you hear it? for anyone with more than week investment timeframe this IS the time to walk in and buy the stock. YEAH, cap gains issues for others, slowing growth because of the sheer numerical size but in the end the thing no one is putting ANY value on is the that the PLANET is experiencing a culture change and that change is going from tethered PC to a phone/tablet. The youth/college crowd has moved in and they will take this thing into EVERY nook and cranny. your Doctor will soon be carrying patient info on a tablet. Your maintenance man will have his schedule on tablet / phone. They are literally wiping out entire corporate cultures like the Inca Indians .... Rim is GONE. HP is down and going out. Much like IBM took out the control data's of the world this apple phenomena is going to go on for decades. The quality issue is REAL. Droid is still buggy and doesn't get it. Windows is probably good but no one makes that choice because of the chicken/egg thing .... you gotta have the APPS. I need to see evidence their APPS library is material enough to ATTRACT customers. Can't see that yet.

     

    Owning shares in this, with its cash accumulation characteristics, at this price, .... is a STEAL.
    8 Nov 2012, 12:38 PM Reply Like
  • Skull & Bones
    , contributor
    Comments (59) | Send Message
     
    Institutions and Hedge Funds stomping on AAPL to force it back to a level where they can justify a long term HOLD with limited downside. $702/share is NOT that level.
    8 Nov 2012, 01:03 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4040) | Send Message
     
    Yup. They hope to get it to 520 or so. It will eventually explode up and all the nay sayers will be late to the party.
    8 Nov 2012, 01:15 PM Reply Like
  • Abraxas
    , contributor
    Comments (293) | Send Message
     
    And how exactly do institutional investors and Hedge Funds force it back to that level while, at the same time, not harming themselves?

     

    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.
    8 Nov 2012, 01:32 PM Reply Like
  • Ronin.
    , contributor
    Comments (1487) | Send Message
     
    The situation with selling has worsened as people lock in gains prior to a possible capital gains tax increase in the upcoming year...

     

    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
    8 Nov 2012, 01:15 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (747) | Send Message
     
    Cramer has been basically pushing AAPL since early 2009 (if not earlier). However, as soon as there is any heat at all, Cramer is the first one out the door screaming "fire". Two weeks ago Cramer was saying "buy Apple as an investment and forget about it". Which is it?

     

    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.
    8 Nov 2012, 02:12 PM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    when cramer comes on switch over to bloomberg a lot better reporting without the bias...
    8 Nov 2012, 02:19 PM Reply Like
  • davemet
    , contributor
    Comments (36) | Send Message
     
    Classic manipulative Cramer. He admits it right here (I strongly recommend watching this)
    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.
    8 Nov 2012, 02:26 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4040) | Send Message
     
    Cramer always recommends high and sells low. He is a real threat to any investor following him.
    8 Nov 2012, 05:30 PM Reply Like
  • ManoLive
    , contributor
    Comments (437) | Send Message
     
    Wasn't Cramer screaming BUY just a while ago, like when the stock was near $700.00? I thought at the time, "Oh great! Now everybody will sell because of Cramer".

     

    Is Cramer ever right?

     

    Cramer saying sell can only be good news for this stock. ;-\
    8 Nov 2012, 06:29 PM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    http://buswk.co/TNLLfk.......... hedgies are behind the curve ....propped up with short term options needing to cover...pendulum will swing in the other direction soon.... for whom the bell tolls....
    8 Nov 2012, 01:16 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (775) | Send Message
     
    Just because a company makes "the best" product doesn't mean the company will make money (or in this case either make a lot, or a ton), or the stock is a good investment.

     

    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.
    8 Nov 2012, 01:24 PM Reply Like
  • Jack Baker
    , contributor
    Comments (875) | Send Message
     
    With regard to your first comment, AAPL makes the best quality products and also makes the lion's share of the profits in the smart phone market. So no, quality doesn't equate to profits, but it AAPL's case it has, does now and will for the foreseeable future.

     

    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.
    8 Nov 2012, 02:28 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (775) | Send Message
     
    Cell phones have existed for a long time and the companies have always displayed economic characteristics similar to consumer discretionary companies. Everyone needs a car in the US but those companies are considered discretionary. The point is, the companies have what is know as operating leverage, sales can vary widely for individual companies based on the economy and products.

     

    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).
    8 Nov 2012, 02:47 PM Reply Like
  • madmaxmedia
    , contributor
    Comments (77) | Send Message
     
    Thanks for the detailed reply. Just a comment on Sharp- I think Sharp's problems go far beyond giving losing money supplying Apple. If Dediu's hypothesis is true, I think it could actually represent a great opportunity for Apple to invest in production. If more than 1 supplier were having financial difficulties and were pointing at bad contracts with Apple, then I would be more worried about this. But I think their positions are more a reflection of the fact that they are in commodity markets, rather than specifically their dealings with Apple (although I understand Apple does not shy away from being the 'heavy' when negotiating with suppliers- that's why I think they could win if they have invested in Sharp.)
    8 Nov 2012, 05:09 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (775) | Send Message
     
    It is not just Sharp, but they represent the extreme example along with Elpida. In any industry where you have players as significant as Sharp having troubles, it means even the good firms are only squeaking by. You are right that Sharp's troubles are a direct result of larger LCDs not smaller LCDs, but it is part and parcel with the business that you will have under performing segments, therefore the outperforming segments really need to make up for those. It is small LCDs themselves that are taking dollars away from big as people spend on phones and tablets rather than TVs, at least for the moment. But, if were as easy as just hiving off all of Sharp's troubled businesses and keeping what is working, then you wouldn't hear about companies such as Intel, Apple, Google or Hon Hai investing in Sharp directly. Fact is, all the R&D and SG&A apparatus is the same and that is where most of the expense is. You need Sharp the company, not just the several production facilities that physically manufacture small LCDs.

     

    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?
    8 Nov 2012, 05:41 PM Reply Like
  • Ronin.
    , contributor
    Comments (1487) | Send Message
     
    I believe Sharp is becoming a bigger supplier for phone screens, not an old one that has been failing because of Apple. Samsung had become a increasingly larger supplier for chips and screens, and now, reversing this is a bit painful, because although they are now an enemy, they excel at component quality and delivering product in massive quantities. Earlier, Samsung took iPad display business from LG and Sharp, due to quality issues...

     

    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.
    10 Nov 2012, 03:44 PM Reply Like
  • Rummeljordan
    , contributor
    Comments (477) | Send Message
     
    Someone spilled the apple bug kool-aid.
    8 Nov 2012, 01:27 PM Reply Like
  • New Low Observer
    , contributor
    Comments (2007) | Send Message
     
    Apple "can't catch a break"? What kind of remark is that? That's like saying that the stock rose to $700/share accidently or by some stroke of luck.
    8 Nov 2012, 01:30 PM Reply Like
  • Misho ILIEV
    , contributor
    Comments (542) | Send Message
     
    I would be surprised if this plunge doesn't stop when the share price reaches USD 450 ;)
    8 Nov 2012, 01:50 PM Reply Like
  • aardvark3
    , contributor
    Comments (310) | Send Message
     
    It's very interesting to watch insider traders at work and comforting to know that in this down market, AAPL is where they have the most gains and know they can reap the most benefits on the upside.
    8 Nov 2012, 01:50 PM Reply Like
  • casselp_2000
    , contributor
    Comments (97) | Send Message
     
    To CNBC; does anyone believe what Cramer says anymore???
    Fie- begone.
    8 Nov 2012, 02:14 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4040) | Send Message
     
    Once a hedge fund liar - well, you get it?
    8 Nov 2012, 05:31 PM Reply Like
  • bazop5
    , contributor
    Comment (1) | Send Message
     
    "I repeat: there is no reason to freak out just yet."
    I was very late and bought in at 680. Not freaking out, but not exactly thrilled, either.
    8 Nov 2012, 02:15 PM Reply Like
  • anomaly1
    , contributor
    Comments (751) | Send Message
     
    the bigger they are the bigger they fall. AAPL above $600 = danger, below $550 = approaching oversold.

     

    Just relax... buy on any sign of bullish reversal
    8 Nov 2012, 02:35 PM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (302) | Send Message
     
    yah I agree but nearlyout of dry powder...
    8 Nov 2012, 02:37 PM Reply Like
  • GeorgeTS
    , contributor
    Comments (75) | Send Message
     
    Apple is selling off because it,s shareholders are taking their gain now before the tax increase. Apple is making some good desicisions for the road ahead. Relying as little as possible on the companies that would steal their ideas. Some are scared this will hurt earnings. But I don't really think it will. look at the line up of products Apple has and just in time for the holidays. And now the Samsungs and Googles. Can no longer have the inside information to copy.
    8 Nov 2012, 02:39 PM Reply Like
  • stepfaraway
    , contributor
    Comments (6) | Send Message
     
    Hang in there everyone who believes in Apple. This is a cycle and it's harsh, but eventually the downward spiral will reverse! Two months ago projections of >$1k price target, and even with a few bugs not much else has changed. Consider this a lower entry point for those that haven't or couldn't get in when near $700.00. When fiscal cliff issues get handled and we near earnings in January Apple will be climbing steadily back up and earnings will prove its worth over its previously high.
    8 Nov 2012, 02:40 PM Reply Like
  • tsabar
    , contributor
    Comments (82) | Send Message
     
    Watching a nice chunk of my gains wither away was very painful. So I finally pulled the trigger and liquidated my position. This selling is irrational, but can go on for sometime. A lot of Apple cynics and bears are feasting.
    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!
    8 Nov 2012, 02:59 PM Reply Like
  • WmInce
    , contributor
    Comments (72) | Send Message
     
    When stock is held by anyone . . . . not one penny is earned . . . . until the stock is sold.

     

    When stock is held by anyone . . . . not one penny is lost . . . . until the stock is sold.

     

    Panic selling is an investors worst enemy.
    8 Nov 2012, 06:48 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2341) | Send Message
     
    I hope people continue to spazz out so I can add to my position
    8 Nov 2012, 03:20 PM Reply Like
  • surfnspy
    , contributor
    Comments (415) | Send Message
     
    Yep
    9 Nov 2012, 02:14 AM Reply Like
  • Michael2343
    , contributor
    Comments (457) | Send Message
     
    Apple is in a long term downtrend, but will bounce here at around 540. Bulls will clamor that its the bottom, we get back up to the 550-560 range, then it will plummet again. Took major profits on shorts and looking to re enter.

     

    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.
    8 Nov 2012, 03:38 PM Reply Like
  • chopchop0
    , contributor
    Comments (3006) | Send Message
     
    Just hit 535....
    8 Nov 2012, 04:10 PM Reply Like
  • NaveenB
    , contributor
    Comments (16) | Send Message
     
    My Cash Secured Puts at 525 expire tomorrow, I wonder if I will be put the stock?
    8 Nov 2012, 04:09 PM Reply Like
  • Leont68
    , contributor
    Comments (1351) | Send Message
     
    525 minus your options premium should be a very attractive price to own apple shares. I think you cant go wrong either way
    8 Nov 2012, 05:29 PM Reply Like
  • DLRegister
    , contributor
    Comments (7) | Send Message
     
    This slide has nothing to with the cliff, it's a repudiation
    of Osama's win. Bad times are coming.

     

    Gold, guns and ammo
    8 Nov 2012, 04:14 PM Reply Like
  • Dave Dunbar
    , contributor
    Comments (50) | Send Message
     
    But if Apple needs more production capacity to meet demand, isn't there an App for THAT?
    8 Nov 2012, 04:46 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (295) | Send Message
     
    http://yhoo.it/RI7hRS
    8 Nov 2012, 05:05 PM Reply Like
  • Interesting Times
    , contributor
    Comments (9672) | Send Message
     
    Sorry Apple owners, you are not immune to a market correction, a huge death of a leader, and confusion of a products excellence going forward.

     

    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..
    8 Nov 2012, 05:06 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4040) | Send Message
     
    This post contains about as much BS as the last election.
    8 Nov 2012, 05:35 PM Reply Like
  • Interesting Times
    , contributor
    Comments (9672) | Send Message
     
    PIG

     

    Biochemist giving stock advice?? Sounds like a winner to me!!
    8 Nov 2012, 06:12 PM Reply Like
  • Heathrow
    , contributor
    Comments (22) | Send Message
     
    Good that apple is sourcing components directly from manufacturers. This means that the assembly companies cannot pass on the benefit of apple size purchasing power to apples competitors. This will push competitors costs up.
    8 Nov 2012, 05:10 PM Reply Like
  • mic101
    , contributor
    Comments (2) | Send Message
     
    At first I thought opportunity knock and has been avg down but this got really scary. it's seem MM is sinking the ship but how far? I think they played "FEAR" very well into our head.
    8 Nov 2012, 05:17 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4040) | Send Message
     
    I am adding. Irrational market behavior is excellent for making money. AAPL has not changed much in 2 month, or did it? LOL
    8 Nov 2012, 05:36 PM Reply Like
  • Interesting Times
    , contributor
    Comments (9672) | Send Message
     
    PIG

     

    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..
    8 Nov 2012, 06:16 PM Reply Like
  • tom bernardi
    , contributor
    Comments (92) | Send Message
     
    if you want to lose money listen to crammer. guy is a flake and changes constantly onhis recommendations. aapl is a long term gem- keep averaging down and settle in for long haul. and do same with microsoft
    8 Nov 2012, 07:39 PM Reply Like
  • Tack
    , contributor
    Comments (12442) | Send Message
     
    Apple's problems are not imaginary or temporary:

     

    http://bit.ly/YU11cp

     

    http://bit.ly/SDsOtC
    8 Nov 2012, 08:05 PM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    If Apple is in trouble because the brand new S3 outsold the aging 4S in one quarter, will Samsung be in trouble because the brand new iPhone 5 outsold the aging S3 in another quarter? Of course not. Both of these phones are selling well and together they rule the smartphone universe. It is no wonder these are the only companies actually making a significant profit on their devices.

     

    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.
    10 Nov 2012, 12:51 PM Reply Like
  • Continental Kid
    , contributor
    Comments (191) | Send Message
     
    you guys don't get it.....the margin compression is coming faster than you think...and the market is forward looking...Samsung...is putting out product that is comprable...(don't attack me because of your Apple luv)....at half the price.....and people are mindful of their diminishing free cash flows.....note the report that from the resturaunt industry.. that said 18 to 30 year old avg one night out a week now....lowest in 40 years.....AAPL will always compete and excell...just not at its current profit margins...
    8 Nov 2012, 08:56 PM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    Same thing happened around this time last year and Apple went to 700 pretty quiick....not a big Apple gadget guy but I bought a few shares today in anticipation of a last year run by Apple
    8 Nov 2012, 09:16 PM Reply Like
  • dehilster
    , contributor
    Comments (2) | Send Message
     
    Folks, Cramer has one thing wrong: Apple need innovation. Even without it, it will do great for at least a year without anything new. The iPhone and iPad have GREAT demand and are far from done. It's painful, but look at the big houses and what they are saying about 2013. Cramer read too much into his interview with Jobs biographer. jobs biographer is not the person to listen too for financial or marketing advice.
    8 Nov 2012, 09:38 PM Reply Like
  • divinecomedy
    , contributor
    Comments (466) | Send Message
     
    I am not a big fan of Apple's products although I own a MacBook Pro, but why is this stock down more percentage wise than Amazon again? One's making boatload of money and the other one's determined not to make a profit. If any intelligent being outside the planet's looking at our stock market, they'll scratch their head and think we are lunatics.
    8 Nov 2012, 09:51 PM Reply Like
  • aardvark3
    , contributor
    Comments (310) | Send Message
     
    Cramer is a performer- a circus clown, far removed from his former investing life. His goal now is to shock, entertain and keep the spotlight shining on him no matter what comes out of his mouth. Talk first think later. CNBC has become unwatchable.
    10 Nov 2012, 08:08 AM Reply Like
  • chopchop0
    , contributor
    Comments (3006) | Send Message
     
    I use it for contrarian plays lol
    10 Nov 2012, 10:45 AM Reply Like
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