jcrash

Can You See Apple Under $60?

On Nov 21 12:35 PM SteveTheHawk wrote:

> Considering the current economic climate, I don't see Apple as being
> undervalued at all. Even with the huge drop in price, it still has
> a PE of 15. I don't see their sales momentum continuing at its current
> pace. What will drive the price up though is the restoration of faith
> in the credit and stock markets. Who knows if/when that will happen?
> I wouldn't buy it at 190 and I wouldn't buy it at 140. The Pollyanna's
> screamed that it would never see $100.00 again. Yeah....right. In
> normal times, I would jump all over Apple stock at the current price.
> These days..... I'm not exactly excited about it. Maybe I'll buy
> some.... maybe I won't.


Stevie, I dont own Apple, or a mac. I do own a bull put spread on them though.

You need to read the financials and the earnings conferences. You see, in this previous quarter, they actually made about $2.50/share. It is purely a trick of accounting that it doesn't show up that way on the statements. Take $2.5 multiple it by 4, stick any P/E you want on that. If you get a stock price less than the current market value less the cash on hand, don't buy. Otherwise, get a brain.

For you folks that think $60 will never be seen, there is easy money to be had selling the put spreads. Sell 40/60 or 45/65 if you like.

I've gone with the easy money at 30/50 myself.

Possible Outcomes of My Apple Purchase

I have an MBA in finance, dude. I know the technical definitions. I also know that if you are short the 20 puts with all your IRA capital and the stock opens at $14 you are now dead...zero capital or negative. You can lose MORE than all your money shorting puts. It is a leveraged play.

You cannot lose more than all your money in covered calls. Period.

Possible Outcomes of My Apple Purchase

For the record, what I've been doing with apple is selling bull put spreads out of the money. The implied volatility has led to some very decent gains in short amounts of time with this - while limiting my downside unlike the previous poster.

Possible Outcomes of My Apple Purchase

Heh, you can stop out wherever you want?

So, when NVDA was at 19...halted...and opened the next day at 14 or so I could stop out at 17?

I think not. Your naive in thinking the two are equivalent. They aren't. If you put yourself in the realm of infinite capital they are, otherwise they aren't even close.

It is NOT ironic that the IRA would allow you to do covered calls but not naked puts. An IRA cannot be funded at will. You could easily go negative with the scenario I mention above if you are short puts. Then what do you do? That would be a tax nightmare.

Apple: My Q3 Earnings Estimates

I'll guess $1.35

What's Next for Apple: 3D Gaming?

Bahaman, you needed to have bought Apple Jan 09 120 Calls back when I did.

Apple's iPhone Shortage Is Probably Just That

Love it. First they all said where are the phones going. Then they said, Apple is reducing production. Then the analysts were all cutting sales estimates saying no way they make 10 million in sales by 2009. Now there aren't enough phones, so once again it must be something bad.

Low Flash Memory Prices Pressure Chip Makers

Bah, when Apple reports $1.25 for the quarter, perhaps everyone will shut their pie-holes.

Intel, Google, Apple: Valuation Anomalies To Consider

I think his point was to generate responses, since his article doesn't actually say much.

Personally, I think one of those stocks is in one of those situations where you will kick yourself in a couple years for not buying it right now.

The others, not so much.

Contrarian Indicator: Analyst Buy Ratings

Bah, you take the average of ALL of those on the bottom, and place it against the performance of AAPL over the next 12 to 24 months. It will be a stark contrast.

Let's see
Choicepoint has a P/E of 53.6
BEAS is at P/E of 25 based on 2010 earnings!
E*Trade? Toxic...High risk reward obviously.
Circuit City? Please, no one goes there anymore.

Or you can have AAPL with a P/E of 25, and $25 per share cash growing sales at a phenomenal rate with margins that are still increasing due to component oversupply. I don't own much, but I'd own my little piece well before any of those others.

Research in Motion: Unlike Apple, No Slowdown in Subscriber Growth

I think you get the gist of what I would say given the comments above.

Your article is based on RUMORS and suppositions. I would wait for the real numbers before you embarass yourself further.

How Are Apple and RIM Moving Up?; Sandisk's Flash of the Future

Hey, xstat, Apple hasn't had the "best" MP3 player in a long time, but that hasn't stopped them from selling 10x more than anyone else. It isn't always about which one is best...took me a while (and a few dollars) to figure that one out.

Flash NAND Decline Provides Upside Surprise for Apple

Meh, don't hit them over the head with it. let them figure it out AFTER earnings.

I'm hoping to double down around $109 if they can sell it off to there.

The Street Underestimates the Strength of Apple's Deferred Revenues

Yeah, I have a model of their earnings and the deferred revenues are simply astounding. You'll be looking at almost a Billion per quarter within a year.

Apple: On an Innovation Treadmill

I don't own a single Apple Product, but I've done a better analysis than you have. If you look STRICTLY at iphone revenues and earnings, the rest of the company could not grow at all and the iphone will account for the growth needed. These numbers are easy to calculate given the information Apple has already provided on sales, forecasts and deferred revenue/earnings.