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Humble Eagles

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  • Apple: iPhone 6 Plus A Star, ASP To Rise [View article]
    Mr. Market is giving away Apple shares compared to the index values. Just taking a look at the forward PEs for this morning's snapshot--NSDQ 100, S&P 500 and Russ 2000 are all in the 17-18 range for forward estimates. Giving Apple half credit for their cash~$10, plus 17.5(PE) X 7.84(this year's est.) and we get a value of ~$147. That is if they hit estimates. If they beat, it should be higher. Indexing is so prevalent now and Apple is significantly underpriced compared to the indexes. Plug in the DJ Utilities valuation and we really take off on price! If we credit Apple's cash, Mr. Market is saying that the average utility's earnings should have a valuation over 50% higher than Apple's, and that the average Russell 2000 stock's earnings should be valued a little under 50% higher than Apple's earnings.
    Jan 26, 2015. 12:15 PM | 8 Likes Like |Link to Comment
  • Apple Earnings Preview: Up, Up And Away [View article]
    Bill, you always do a great and objective job. I think you are a little low on your iPhone ASPs, a little high on your iPad ASPs, a little low on your iPad sales. Otherwise, nearly perfect. I think the ASPs and other changes put them over 70Bn and $2.70. If Ming-Chi Kuo is right, as he often is, and my ASPs are right...look out Moon. GLTA.
    Jan 26, 2015. 08:53 AM | 5 Likes Like |Link to Comment
  • Apple Earnings Preview: Up, Up And Away [View article]
    Good for you. Nice to see some Semper Fi here on SA! A couple of interesting points: Bill is calling for a fairly low (IMHO) ASP. I think it will be about 700. But, I could be wrong because of currencies. The soaring dollar will definitely hurt ASPs, and I didn't think it would get nearly as high as it has. It is really going to hammer European sales for guidance. I figure around 66MM iPhones at an ASP of 700 will get them very close to 70Bn in revs! If some of the bullish analysts are right, and they sell 70MM iPhones, my ASP of 700 will provide the mother of all blowouts tomorrow. Watch ASPs in addition to units sold. Bottom line, though, is Apple is selling--today--at a very steep discount to the major averages, and that gives ZERO credit for their cash. The herd is indexing now, so Apple is either irrationally cheap, or the indexes are irrationally expensive. Apple would be selling for about $150 this morning with a typical index fund valuation. GLTA.
    Jan 26, 2015. 08:47 AM | 11 Likes Like |Link to Comment
  • Restaurant stocks shrug off plight of McDonald's [View news story]
    I was saying that about CMG $300 ago!
    Jan 24, 2015. 10:23 AM | Likes Like |Link to Comment
  • Apple Fiscal Q1: Eye-Popping Results To Come [View article]
    Jeff, my model has ~65 - 66MM phones as the 70Bn crossover point. That assumes 700 as an ASP. Currency headwinds could knock it a little below 700. 68-69 would get them to about 72Bn. That is almost 5Bn above the top end of guidance, and completely jumps the 60Bn handle for revs! It just seems to me that they would have guided up if they were going to blow it out by that much. That makes me more cautious, maybe 64.5MM phones and 69+Bn in revs. I would love it if you were right, though. Regardless, Apple's growth alone this quarter is almost as big as 100% of Intel's revenues. What is most amazing is that Apple is selling at a very deep discount to all of the major averages. If you sell an index fund and buy Apple you are lowering your PE multiple by several points. Should be interesting and GLTA.
    Jan 24, 2015. 10:17 AM | Likes Like |Link to Comment
  • Restaurant stocks shrug off plight of McDonald's [View news story]
    Love HABT, but it still looks pricey. 30 is getting better. SHAK sounds great, but we will see on price. My favorite is GTIM. Smaller, but the valuation is fantastic, assuming they execute. Would love to own all three. Apple is still cheap after the big selloff. I am hoping for 700 on the ASPs, but currency might take it a little below that. Should be interesting!
    Jan 23, 2015. 03:16 PM | Likes Like |Link to Comment
  • Restaurant stocks shrug off plight of McDonald's [View news story]
    Note to MCD: people don't want 18 ingredients in their french fries, they want potatoes. MCD needs a WFM makeover and they will take off again. Not sure if they can do that. In the meantime, I expect the smaller chains providing more natural food to soar. GLTA.
    Jan 23, 2015. 11:59 AM | 2 Likes Like |Link to Comment
  • Apple Fiscal Q1: Eye-Popping Results To Come [View article]
    Apple can surprise up and down! In 2012, it was like a rocket after earnings, and that is the huge risk of being out going into earnings. A blowout could cause a huge jump in the AH market. There is something very different this year: I am reading rumors that they are going to intro new products soon, in addition the Watch. They really haven't had any new products outside of the Fall timeframe in years. ATV is due for a big upgrade, as are new Macs, and possibly new iPads. A blowout followed by more new products may get us to 150 sooner than later. Apple would be 150-160 this morning if it simply had the same PE as the major market averages, so it could jump 30% on multiple alone and still not be overvalued compared to index funds and major averages. Apple is very, very cheap. Of course, bad news can always tank it. GLTA.
    Jan 23, 2015. 11:53 AM | 2 Likes Like |Link to Comment
  • Buy American Airlines Before Earnings [View article]
    I agree with your logic! AAL prints money as oil drops--~375MM gallons a month. They are an oil well in reverse. They were expected to earn about $6 a share at 100 oil! Mr. Market is in denial on oil prices (and so are many SA commenters). AAL is less than 5X my estimate for this year, XOM is almost 20X, as are most of the major averages. Inventory today is the highest in 80 years! I just hope we aren't looking at 20 something dollar oil, as that will be too disruptive imo. AAL is designed to be profitable even with $130 oil! This earnings conference should be strong, but next should be the mother of all blowouts. GLTA.
    Jan 22, 2015. 11:45 AM | Likes Like |Link to Comment
  • My Best Idea For 2015 - American Airlines [View article]
    Big oil companies priced as if oil were 85/brl, and so are the airlines! Mr. Market is denial imo.
    Jan 22, 2015. 11:19 AM | 2 Likes Like |Link to Comment
  • High-flying days for the airline sector [View news story]
    One point to remember--oil was dropping for all of last quarter. This quarter is actually the one that will produce stunning profits if oil stays close to current levels. Last quarter will still be strong, though. Also, my comment about a dollar a gallon is a dollar a gallon cheaper, not a price of a dollar a gallon. A dollar a gallon less is close to where we are now.
    Jan 22, 2015. 10:20 AM | 1 Like Like |Link to Comment
  • Verizon reports strong wireless adds, but service growth declines [View news story]
    This is huge for Apple: absolutely stunning growth in smartphone activations.
    Jan 22, 2015. 10:14 AM | 3 Likes Like |Link to Comment
  • High-flying days for the airline sector [View news story]
    One of the great contrary indicators is ETFs. I couldn't even find a decent airline ETF last year when I wanted to just own the sector! Mr. Market *hates* airlines. They had their worst decade ever after 9/11 took out ~25% of revs and then they were knocked out by the left cross from the financial crisis. They are back with much better cost and capacity control, and now they are printing money as oil drops. AAL used ~376MM gallons a month last qtr! At a dollar a gallon, they will be printing money at about 4.5 Bn/year. And, they were expecting ~$6-7/sh with $100 oil! 4.5 Bn is almost $6 a share! AAL should top $10 this year and maybe $11-$12, depending on oil. Interestingly, the market and big oil companies are still selling for close to 20 X this year's earnings. AAL would be selling for 4+ if they make $12. GLTA.
    Jan 22, 2015. 10:11 AM | 4 Likes Like |Link to Comment
  • Apple Fiscal Q1: Eye-Popping Results To Come [View article]
    JM
    Jan 22, 2015. 10:03 AM | Likes Like |Link to Comment
  • My Best Idea For 2015 - American Airlines [View article]
    Sometimes it helps to keep it simple: XOM is selling for almost 20X this year's estimates. That valuation is pretty close to most major market averages, too. AAL is selling for 5-6 X estimates. I think the estimates are too low, and AAL is likely going in the 4-5 range. The problem on the lookback isn't valuation today--it is how irrational the price got a few weeks back. AAL got down to less than 3X current estimates in October! People were justifying it simply because it is an airline. Following the herd works sometimes, but independent thinking usually wins. AAL especially, and all of the airlines have a lot of runway ahead. Assuming they don't ingest a black swan on liftoff, I think they will dramatically outperform again this year. GLTA.
    Jan 22, 2015. 09:54 AM | 2 Likes Like |Link to Comment
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