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re: Aapl down $60 in 3 days....
Posted on 4/16/12 at 7:53 pm to Scoop
Posted on 4/16/12 at 7:53 pm to Scoop
Conspiracy theories aside, this is the magnitude of a "normal" apple pullback after a new high. People take profits and it crescendos down. If we break through the 50 day moving average I would be a bit more worried.
Apple is trading on 1st. Emotion, 2nd, technicals, last fundamentals.
If this stock was trading on fundamentals and fair value I think it would be at $700. Stocks have pullbacks. If Apple pulled back to 300, you'd have a stock with a forward PE of 6, a dividend yield of 3.5%, and long term growth rate north of 20%, with billions in cash. I'd reverse mortgage my parents house to buy Apple
Apple is trading on 1st. Emotion, 2nd, technicals, last fundamentals.
If this stock was trading on fundamentals and fair value I think it would be at $700. Stocks have pullbacks. If Apple pulled back to 300, you'd have a stock with a forward PE of 6, a dividend yield of 3.5%, and long term growth rate north of 20%, with billions in cash. I'd reverse mortgage my parents house to buy Apple
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Posted on 4/16/12 at 8:37 pm to baytiger
quote:
rumors of a Samsung Galaxy S3 release soon? They sent out invites to a May 3 event this morning
Sarcasm appreciated.
It is curious. It makes you wonder what makes the wheels turn to see something like this.
There will be rampant conspiracy theories when something like this happens a week before earnings. If Apple blows out earnings it will be that the price was driven down for the big boys. If Apple misses it will be accusations of insider trading.
Last week it wasn't a big deal because the big drops in Apple were kinda mixed in with the shitty week for the market. The market was solid today and to see the golden boy getting it's arse kicked in that atmosphere stuck out like a sore thumb.
Posted on 4/16/12 at 9:19 pm to ThaBigFella
Good luck with that theory. Apple will definitely tank one day, but not now. I'm LOOOOOOOONG AAPL.
Posted on 4/17/12 at 8:33 am to GrantTheFan
I expect AAPL to break below 550 (50 dma) and test 500 in a down market in may/june. good entry point for run back to 700 in dec/jan. catalyst could be any of following, new products, QE3, low PE, powerful earnings.
Posted on 4/17/12 at 9:00 am to Larry Hollins
Looks like 578.90 was the magic number.
Posted on 4/17/12 at 9:13 am to Scoop
Nah, just the hedge funds artificially inflating the price to stop their bleeding.
AAPL to 200 by the end of the month.
AAPL to 200 by the end of the month.
Posted on 4/17/12 at 10:46 am to Larry Hollins
quote:
Low PE, powerful earnings
We already have that!!! A forward PE of 12 for one of the greatest brands and growth rates! That's a steal. People get freaked out by large numbers too. $700 price targets, OMG. Divide the stock price by 10, have trouble seeing a $60 stock going to $70? Hell no. A stock gaining $100 per share sounds crazy
I'm confused what investors/the street expects out of AAPL. I think they are equally deserving of a multiple more akin to CMG (60x -maybe a bit higher) than an average 13-14 S&P multiple. If we had multiple expansion to a "tech multiple" Apple could easily be 1000 a share.
$50 EPS x 20 PE = $1000
Posted on 4/17/12 at 11:07 am to greenhead11
I think there may have been some misperception by the retail side of the trade after the blowout numbers from last quarter since it was quite possibly the biggest beat of all time, having people think they're going to double revenues quarter over quarter again (which its obviously not going to do). To be tinfoily about it, the "big boys" see the lemmings running and just play the trade. I'm not sure retail can move the stock like that but there is definitely a giant amount of hype around it, even for AAPL, as of late. Gene Munster was touting it at $1T market cap by 2014 yesterday.
Posted on 4/17/12 at 11:15 am to greenhead11
quote:
We already have that!!! A forward PE of 12 for one of the greatest brands and growth rates! That's a steal. People get freaked out by large numbers too. $700 price targets, OMG. Divide the stock price by 10, have trouble seeing a $60 stock going to $70? Hell no. A stock gaining $100 per share sounds crazy
You can divide it by a million. It won't change the fact that it's the largest corporation in the world and priced as a growth stock.
It also won't change the fact that absolutely NO ONE is even talking about the possibility of their earnings shrinking. There is no way that a company can maintain the kind of margins AAPL is churning out in the long run.
People thought that MSFT and ORCL and tons of other companies could be the leaders into the "new economy", none of them did and none of them will. Margin compression happens to everyone in the long run. the roullette wheel can hit black 100 times in a row, but it will eventually revert to the mean in the long run (law of large numbers).
Posted on 4/17/12 at 11:20 am to greenhead11
quote:
People get freaked out by large numbers too. $700 price targets, OMG.
Never stopped BRK.
quote:
Divide the stock price by 10, have trouble seeing a $60 stock going to $70? Hell no.
The stock price is not the big number. It is a 560 billion market cap that is the hard number.
quote:
I think they are equally deserving of a multiple more akin to CMG (60x -maybe a bit higher) than an average 13-14 S&P multiple
$3 trillion market cap? Cmon man.
Posted on 4/17/12 at 11:26 am to igoringa
man, this took so long for Apple to bounce back to 600.
Posted on 4/17/12 at 11:35 am to Chad504boy
Pretty sure the first guy was trolling. He won.
Posted on 4/17/12 at 11:37 am to kfizzle85
quote:
Pretty sure the first guy was trolling. He won.
We're all winners in apple threads.
Posted on 4/17/12 at 11:37 am to igoringa
The part of the CMG multiple came out wrong. I don't think they should trade at 60X earnings but they are deserving of a higher multiple rather than the "average multiple" as Apple isnt your average company. My god if they traded at 60X earnings...I'd be mooching off my parents portfolio (Appl heavy)
Posted on 4/17/12 at 11:44 am to TheHiddenFlask
You are absolutely right about the margins shrinking. While the work place violations got all the attention in China, what gets little press is the dramatic increases in minimum wage that ocuring all over south east Asia. apples margins will definitely be compressed.
How do you offset that?
I believe AAPL has pricing power that can help offset those margins not to mention more than enough cash on the balance sheet to make a strategic acquisition and ensure supply chain management and operating margins remain fairly consistent.
The extent to which they having pricing power- I don't know, but wait till the old iPhones are affordable in the EM's. Another catalyst for growth?
In terms of the share price, the lower margins and consequently lower growth in EPS could easily be offset by multiple expansion- if anyone besides me ever realizes a forward PE of 12 is absurdly cheap.
If ya can't tell I'm an Perma bull until they slip up. Superior brand, superior management, failing competition, god earnings growth, high profitability, what else can one ask for?
How do you offset that?
I believe AAPL has pricing power that can help offset those margins not to mention more than enough cash on the balance sheet to make a strategic acquisition and ensure supply chain management and operating margins remain fairly consistent.
The extent to which they having pricing power- I don't know, but wait till the old iPhones are affordable in the EM's. Another catalyst for growth?
In terms of the share price, the lower margins and consequently lower growth in EPS could easily be offset by multiple expansion- if anyone besides me ever realizes a forward PE of 12 is absurdly cheap.
If ya can't tell I'm an Perma bull until they slip up. Superior brand, superior management, failing competition, god earnings growth, high profitability, what else can one ask for?
This post was edited on 4/17/12 at 11:48 am
Posted on 4/17/12 at 11:52 am to greenhead11
quote:
until they slip up
For a company that relies on new product releases every year, the opportunity it there. Even more so in that the Ipad and Iphone are basically the same technology, just fit for purpose, IMO.
Posted on 4/17/12 at 12:41 pm to greenhead11
quote:
In terms of the share price, the lower margins and consequently lower growth in EPS could easily be offset by multiple expansion- if anyone besides me ever realizes a forward PE of 12 is absurdly cheap.
So you think a company that has shrinking margins would be rewarded with multiple expansion? I'm not arguing the cheapness of AAPLs P/E, I just doubt that happens.
Posted on 4/17/12 at 12:59 pm to TheHiddenFlask
I don't think rewarded should be the right way of approachin margins. There is some give take in there IMO that factors into what the multiple should be. I think Apple should be "rewarded" for technological innovation and superior management with a higher multiple, even if the margins slip a couple a basis points. A net income margin of 25.8 is pretty impressive. I wouldnt punish Apple for a little margin compression in light of everything else that should factor into determining its multiple. However the street might...
Posted on 4/17/12 at 1:04 pm to greenhead11
CNN 12 month Forecast:
high: 1000
Median: 700
Low: 500
Chose one of the 3. I'll say 1000.
high: 1000
Median: 700
Low: 500
Chose one of the 3. I'll say 1000.
Posted on 4/17/12 at 2:27 pm to Chad504boy
If I had to choose one of the three, I would say 700 but I really think it will be like $750 a year from now.
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