jagad5's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/739098/comments http://seekingalpha.com/article/1310401/comments?source=feed#comment-17073791 17073791
Apple's stock price seems to have been completely separated from the past performance of the underlying company. My seasonal forecast for Apple suggests that the next earnings report will show:
REV = $48.0B
NET = $11.5B
EPS = $12.00

Of the six regression models used, the best accounts for nearly 97% of the variation in the reported revenue data. The model that comes closest to the prediction of professional analysts is the one that fits the data the worst (only 90%.) So if history repeats itself, we can expect the analyst's expectations to be exceeded.

As far as net earnings are concerned, the company has a consistent record of making nearly 25 cents on every dollar of revenue (18+% to 28+% and 23+% average over the last 16 quarters) so I expect about the same profit margin this quarter, too.

Ben Graham published his value formula about 50 years ago and if I back-solve for the growth predicted by the stock price, I get 0%. Well, the analysts expect $42B versus $39B, which is nearly 8%. While this is a lot less than the 47% revenue growth and 57% earnings growth over the last 12 quarters, 8% is a lot bigger than 0%. If I plug 10% into Ben's formula (with 3.8% yield on AAA bonds) I get a fair price estimate of nearly $1500. Do I believe it will get that high? No. But it doesn't have to get there to make Apple a very rewarding investment.

The current PE indicates a stock price out of touch with it's corporate performance, or that we're in for a calamitous change in the company's performance. Since our local Apple store is standing room only I doubt that a calamity is upon us, unless the North Koreans are stupid enough to actually start pulling triggers.]]> Mon, 01 Apr 2013 12:19:27 -0400
Apple's stock price seems to have been completely separated from the past performance of the underlying company. My seasonal forecast for Apple suggests that the next earnings report will show:
REV = $48.0B
NET = $11.5B
EPS = $12.00

Of the six regression models used, the best accounts for nearly 97% of the variation in the reported revenue data. The model that comes closest to the prediction of professional analysts is the one that fits the data the worst (only 90%.) So if history repeats itself, we can expect the analyst's expectations to be exceeded.

As far as net earnings are concerned, the company has a consistent record of making nearly 25 cents on every dollar of revenue (18+% to 28+% and 23+% average over the last 16 quarters) so I expect about the same profit margin this quarter, too.

Ben Graham published his value formula about 50 years ago and if I back-solve for the growth predicted by the stock price, I get 0%. Well, the analysts expect $42B versus $39B, which is nearly 8%. While this is a lot less than the 47% revenue growth and 57% earnings growth over the last 12 quarters, 8% is a lot bigger than 0%. If I plug 10% into Ben's formula (with 3.8% yield on AAA bonds) I get a fair price estimate of nearly $1500. Do I believe it will get that high? No. But it doesn't have to get there to make Apple a very rewarding investment.

The current PE indicates a stock price out of touch with it's corporate performance, or that we're in for a calamitous change in the company's performance. Since our local Apple store is standing room only I doubt that a calamity is upon us, unless the North Koreans are stupid enough to actually start pulling triggers.]]> http://seekingalpha.com/article/1310401/comments?source=feed#comment-17071681 17071681 Mon, 01 Apr 2013 11:46:49 -0400 http://seekingalpha.com/currents/post/854511?source=feed#comment-15568161 15568161 Wed, 27 Feb 2013 08:28:24 -0500 http://seekingalpha.com/article/647701/comments?source=feed#comment-6248531 6248531
Eventually, the stock price and the company's performance will converge. Will the company's performance decline to match the stock price or will the stock price improve to match the company's performance?]]> Fri, 08 Jun 2012 17:27:26 -0400
Eventually, the stock price and the company's performance will converge. Will the company's performance decline to match the stock price or will the stock price improve to match the company's performance?]]>