Apple stock

[blazerboy30]

$200 per share in just cash. Their P/E is very good, plus they have actually sold more product and services now then they've had a year ago. The emotion because shareholders aren't seeing the innovation is creating the downfall on stock prices.

Personally I think it's worth more than that, especially now that they are giving dividends. Something they haven't done forever.

So you're saying you don't even have a valuation model, but you claim that aapl is "actually" worth $500 per share.

This basically proves my point.

 

[magnifier661]

So you're saying you don't even have a valuation model, but you claim that aapl is "actually" worth $500 per share.

This basically proves my point.

I showed you my reasoning why I think it's worth more on the link provided. What are you trying to prove?

You could do a simple 5x net and the company is $600 per share. Obviously there are other factors.

I don't know what agenda you have on this company? Do you want it to fail? Are you a Microsoft guy? What companies you invested in and how did you evaluate those companies?

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m.seekingalpha.com

Here is one model that has the value of the company being $485. This same site said they come out with an Apple TV; then it's over $500.

 

[Denny Crane]

You think those guys want to profit from people buying the stock? I do.

 

[magnifier661]

You think those guys want to profit from people buying the stock? I do.

Did you read the disclaimer below? They must say that they don't hold interest in the company.

 

[Denny Crane]

No plans to own the stock for the next 72 hours.

But I think a lot of people are making money off the stock without even buying a share.

 

[magnifier661]

No plans to own the stock for the next 72 hours.

But I think a lot of people are making money off the stock without even buying a share.

Possible I guess but that's against the law. Guess if you want to take a chance of going to prison for profit; it's worth the risk.

 

[Denny Crane]

Possible I guess but that's against the law. Guess if you want to take a chance of going to prison for profit; it's worth the risk.

It's not against the law. The guy says on the link you gave me that he won't own the stock for the next 72 hours.

As for others making money off the stock, brokers make a commission. Options traders make vigorish. &c.

 

[magnifier661]

Okay so now that I am on a computer, let me give you the best summary of how I value Apple being a $500 stock.

1.) Apple's P/E is 8.96

2.) Apple's EPS is $44.11

3.) I multiply the EPS by the P/E for a total of $395.22 per share. That is the poor man's evaluation of the actual value of the stock.

4.) Now I take into consideration that the company has an access of 187 billion in cash and like Denny pointed out, a book value of $135.00; which I suspect will give an increased value of $135.64 per share. The reason why I incorporate the "book value" is, if apple actually liquidated all their expenses; they would be at zero liability and their cash alone can compensate all their debt, giving them an additional $135 per share.

So adding the $135 + 395.22 = 530.22 per share price.

 

[Denny Crane]

Just wow.

1-3 shows you do algebra ok. It shows you don't get what P/E and EPS mean.

Of course P/E * EPS = current price.

And P/E has nothing to do with book value; the two are unrelated. You can't take the current stock price and just add the book value per share and get some new price.

The book value is only some theoretical minimum price the stock should be.

 

[magnifier661]

Just wow.

1-3 shows you do algebra ok. It shows you don't get what P/E and EPS mean.

Of course P/E * EPS = current price.

And P/E has nothing to do with book value; the two are unrelated. You can't take the current stock price and just add the book value per share and get some new price.

The book value is only some theoretical minimum price the stock should be.

You are missing the point Denny. They can still have the profit, just paying off their debt with the excess cash they have. The P/E and EPS stay the same, less the entire liability; with the exception of accounts payable for Cost of Goods sold.

 

[Denny Crane]

What a bunch of mumbo jumbo.

Look, the P&L is the checkbook register (deposits, checks written). The balance sheet is the bank accounts and loans.

Their profit will be affected by using cash from the balance sheet to paying off a loan on the balance sheet. They won't have to write a check for the loan payment. But they won't have the cash used to pay off the loan, either.

Profit isn't cash in the bank, though. If the company is using it to buy capital assets, the cash flow will be $0 while the assets on the balance sheet will go up.

 

[magnifier661]

Denny what I am saying is this....

http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet

Apple has over 135 billion in cash. They have no long term debt, risk or anything that a normal growth company pains. So the main "liability" is accounts payable for inventory, payroll and taxes.

Their cash alone can buy controlling interest in AT&T; which would give them a big "shoe in" for an apple tv push and added revenue for subscriptions of cellphone service.

 

[magnifier661]

What a bunch of mumbo jumbo.

Look, the P&L is the checkbook register (deposits, checks written). The balance sheet is the bank accounts and loans.

Their profit will be affected by using cash from the balance sheet to paying off a loan on the balance sheet. They won't have to write a check for the loan payment. But they won't have the cash used to pay off the loan, either.

Profit isn't cash in the bank, though. If the company is using it to buy capital assets, the cash flow will be $0 while the assets on the balance sheet will go up.

They have 135 billion in cash Denny. They have more than enough to payoff any liability. They are doing it right now anyway. That is a fucking strong as company. Show me their long term liability?

 

[Denny Crane]

Like I said, their book value is $135/share. That accounts for their $billions in cash and equivalents and whatever liabilities they have.

I have no idea why you think Price / EPS * EPS = Price is relevant to any of this. (notice the EPS cancel each other out leaving just price?)

 

[magnifier661]

Here is an article by Brett Arends; whom was hard on apple for a long while.

http://articles.marketwatch.com/201...le-stock-tim-cook-forecast-per-share-earnings

Yet today, I find myself in the unusual position of defending Apple stock from the sudden deluge of sellers.

If you haven’t been living in a cave for the past week, you’ll know Apple’s stock price recently collapsed to $445, from a peak of $700 last year. Wall Street suddenly discovered that Apple faces competition from companies such as Samsung. And Apple didn’t give a confident outlook for the year ahead.

But this is still a fantastically successful company, and the stock is dirt cheap by almost any measure.

There is a reason why he is defending the company. He thought it was just an average price when it was a $700 stock because there was no real savings to buying into the company. Now that it's this low, with sales being increased each year; this is truly the time to buy.

Let’s start with the basic numbers. Apple’s latest quarterly earnings show the company has $169 billion in cash and liquid assets, and just $69 billion in total liabilities. So the company is basically sitting on $100 billion in cash or equivalents — about $105 per share. (It has another $24 billion in commitments to buy components and pay leases on retail stores. Including those would change the numbers a bit, but not much.)

In short, Apple isn’t really a $445 stock. Net of cash, it’s a $330 stock.

That’s just seven times forecast earnings of $45 per share for the current fiscal year, which runs through Sept. 30. That’s half the rating of the rest of the stock market, which has historically traded at about 14 times forecast per-share earnings.

At current prices, Apple, net of cash, is less than six times forecast cashflow per share.

What does this mean? It's trading less than 50% of how many other companies trade. It's 6 times earnings, compared to the average of 14 times earnings that many other companies trade at.

Last quarter, net sales were up 18%. Sales in China were up 67%. Revenues from selling iPhones rose 28%, those from selling iPads, 22%.

Apple shouldn’t be viewed as a simple technology company. It should mainly be viewed as a luxury goods company — the LVMH or Tiffany of tech. People pay extra to own an Apple product. Sometimes they pay a lot more. The company’s gross margins were 39% last quarter.

There is plenty of new markets for apple, like China that was just given. There is plenty of growth with just it's same products. Basically, they are still increasing sales each and every quarter, high profit and cash revenue and now giving dividends to its shareholders.

 

[magnifier661]

Like I said, their book value is $135/share. That accounts for their $billions in cash and equivalents and whatever liabilities they have.

I have no idea why you think Price / EPS * EPS = Price is relevant to any of this. (notice the EPS cancel each other out leaving just price?)

Um, well since the book value is never really used as the main factor by any big time investment firm. Try and follow others Denny. Explain to me why Amazon is trading at $262.15, with no true P/E and a negative EPS?

http://finance.yahoo.com/q?s=AMZN

And you go by this weird "book value" scenario. Well amazon's book value is 18.09 per share! LMAO!!!!!!

 

[magnifier661]

Or google's book value?! http://ycharts.com/companies/GOOG/book_value_per_share

$228.94, compared to it's $800 price. 28.61% of the actual value.

Apple's book value is $135, and it's trading at 397. That's 34% the value of the company. If you use the google model; its very underpriced. If it used the google mold, the book value should be $113.58

If you use the google mold; apple should be at least a $480 share

 

[magnifier661]

http://blogs.barrons.com/techtrader...-buy-citi-bmo-cut-estimates/?mod=yahoobarrons

Interesting article on a $600 share price justification.

Apple (AAPL) shares are up $5.59, or 1.4%, at $396.16, amidst a mixed stream of research, with Avondale Partners and BGC FInancial raising the stock to Buy or the equivalent, but Citigroup and BMO Capital again cutting estimates for the company.

Today’s raft of notes come in advance of Apple’s fiscal Q2 earnings report tomorrow afternoon, after the bell. Analysts are modeling $42.28 billion in revenue and $9.98 per share in profit.

Avondale’s John Bright raised his rating to Market Outperform from Market Perform, and reiterating his $600 price target, writing that “We acknowledge AAPL’s decelerating earnings, but we believe the stock reflects the increasing competitive pressures and tough margin comp in FY13.”

 

[Denny Crane]

The price of the stock, beyond book value, is purely psychological. It's what the consensus of buyers are willing to pay. Period.

Google is rapidly growing, as is Amazon. Those companies demand a premium for that reason alone. You make a big mistake to compare the companies' PE ratios, or other fundamentals. Apple is a hardware manufacturer. Amazon is a retailer. Google is an advertising company. They're not in the same industry.

Your last link discounts the actual fact that AAPL has decelerating earnings and concludes with "but we believe..."

Amazon is in rapid growth mode. A company that's grown as fast as Amazon with real revenues is often valued by investors at some multiple of TTM sales. At some point, the growth will stop and they'll cut down expenses so they profit nicely. They won't need to spend as much on advertising, support, etc., if they're not growing so fast.

 

[magnifier661]

The price of the stock, beyond book value, is purely psychological. It's what the consensus of buyers are willing to pay. Period.

Google is rapidly growing, as is Amazon. Those companies demand a premium for that reason alone. You make a big mistake to compare the companies' PE ratios, or other fundamentals. Apple is a hardware manufacturer. Amazon is a retailer. Google is an advertising company. They're not in the same industry.

Your last link discounts the actual fact that AAPL has decelerating earnings and concludes with "but we believe..."

Amazon is in rapid growth mode. A company that's grown as fast as Amazon with real revenues is often valued by investors at some multiple of TTM sales. At some point, the growth will stop and they'll cut down expenses so they profit nicely. They won't need to spend as much on advertising, support, etc., if they're not growing so fast.

Well it's a good thing you got that weak argument about book value off your chest.

Apple is trading for only 6 times earnings. If it traded like the normal rate of 14; it's a $617 share.

BTW... even though their growth dropped this year, they are forecasted to increase at a better rate than Amazon, so that argument is weak too.

 

[magnifier661]

So let's use the Denny, emotional 12 month forecast in sales he used for Amazon....

http://www.marketgrader.com/MGMainWeb/mgfree/stockgrader/sg_classic.jsp?symbol=AAPL

The Company's Recent Reports Reflect Solid Top and Bottom Line Growth
Apple, had total revenue of $164.35 billion in the 12 months ended last quarter, an outstanding increase of 291.64% from the same period ended three years earlier, in which it recorded $41.96 billion in total sales. During more recent quarters the company has continued to grow its revenue at a similar rate, which suggests it might be taking market share from rivals. It booked total sales of $54.52 billion last quarter, 18.15% more than what it sold in the same quarter a year ago. It will important to monitor the company's next few quarterly results closely for signs of any slowdown in such remarkable top line growth and to determine if this sales momentum being carried through to the company's bottom line. On the profit front, year-over-year growth was very weak last quarter, a marked contrast to the excellent long term record posted by the company over a three year period when looking at full year results (defined by MarketGrader as four rolling quarters of net income). Its net income rose 0.11% to $13.08 billion in its most recent quarter from $13.06 billion (excluding extraordinary items) in the year earlier period, while full year profit for the 12 months ended on December 31, 2012 of $41.75 billion was 458.34% higher than full year net of $7.48 billion reported three years earlier. The company's margins fell during the latest quarter with an average 0.53% decline in EBITDA, operating and net margins from a year earlier, reversing an increase reported in the preceding quarter.

The company's positive earnings surprise on January 24, 2013, 2.52% above the consensus view, failed to excite investors as the stock fell 14.42% following the announcement, suggesting the report offered poor guidance for future quarters. Despite investors' adverse reaction to this report, it continued a trend of beating earnings estimates, with an average 8.14% positive surprise over the last six quarters, which puts the stock's decline following this latest announcement in perspective given such strong record.

That kicked the living shit out of amazon...

NEXT....

The Stock's Valuation is Attractive Based on the Company's Overall Financial Strength
Trading currently at 9.13 times trailing 12-month earnings per share, Apple,'s stock is priced inexpensively relative to its EPS growth rate in the last two years. Our indicator looks at the 12-month period ended in each quarter within the last two years and calculates the company's annualized growth rate, which is then used to compute the stock's "optimum" P/E. Based on this analysis, Apple,'s earnings per share have grown strongly at an annualized rate of 56.92%. which translates into an optimum P/E ratio of 49.96, 81.78% higher than where the stock trades now. This growth has resulted in strong financial performance, evidenced by the company's Profitability grade. For this to continue, it must reverse its recent margin slide soon. The stock also trades at 7.87 times forward earnings estimates for the next four quarters, lower than its trailing P/E and the S&P 500 index's forward P/E of 15.20. By placing a lower multiple on the company's future earnings than it does on the market as a whole, investors may see the company as financially strong but with relatively poor growth prospects. This may offer a valuable opportunity for patient investors willing to wait for future earnings reports.

Apple,'s current market value is 3.06 times its tangible book value, which excludes intangible assets such as goodwill; this valuation seems attractive, especially considering that only 4.59% of the company's total stockholders' equity is based on intangible assets. When the value of those assets is added back into total book value, the price to book ratio is an even lower 2.92. Based on the $59.89 in cash flow per share generated by the company in the last twelve months, at the current price of $392.05 the stock trades at 6.55 times cash flow, an attractive valuation considering the strength of its overall fundamentals. Its shares also trade at 2.24 times its trailing 12-month sales, a small 21.40% discount to the Computer Processing Hardware industry average price to sales ratio of 1.84. Finally, from a value perspective, we look at how much bigger the company's market capitalization is than its latest operating profits after subtracting taxes. Based on this measure Apple,'s $368.16 billion market cap is an acceptable valuation, representing a modest multiple of 25.10 times its latest quarterly net income plus depreciation.

The profitability alone trumps google's profit; which is considered one of the strongest companies in tech.

Now...

Company's Profitability Is Remarkable, Reflective of Excellent Operating Conditions and Strong Management
Apple, is a very profitable company with strong overall indicators in this section of our analysis. The company's different measures of return to shareholders and margins are typically above those of its peers. In the last four quarters Apple, earned a profit of $41.75 billion, equivalent to 25.40% of its sales in the period. Operating income during that same period accounted for 33.48% of sales, 314.18% higher than the average operating margin for the Computer Processing Hardware industry, which was 7.93%. Based on how much it has earned in the last four quarters, the return on Apple,'s common equity has been a remarkable 32.78% during this time, even though this is below the 36.62% return on equity achieved in the year-earlier period. This metric plays an important role in how our system measures a company's management efficiency.

The company has no debt, which gives it plenty of room to find capital if necessary in light of the recent downturn in its numbers. However, it is still very profitable and nothing currently indicates it would need to take such a step. Apple,'s $60.07 billion in twelve month trailing core earnings, or EBITDA, shows a remarkable increase of 30.14% from the twelve months ended a year earlier, in which its core operations generated $46.16 billion. EBITDA is used to measure the company's true earnings power by including interest costs, income taxes, depreciation and amortization, all non-operating charges, which are nevertheless accounted for in several EPS and net income measures of our fundamental analysis.

There is not a single company like apple in Tech right now. They aren't the low margin type company. They are selling a lifestyle. A status quo. This is something the other giants aren't even close to. They are one of the best marketing agencies I know of. Absolutely efficient.

and finally...

Outstanding Cash Flow Indicators Show the Company Is Managed Smartly and in the Best Interest of its Shareholders
Apple, reported a 33.45% growth in cash flow during the latest quarter to $23.43 billion, an impressive increase from the $17.55 billion in the same period last year. This represents a faster growth pace than when measured on a trailing twelve month basis considering cash flow rose 25.20% over this period compared to the twelve months ended a year earlier. This continued improvement should benefit the company's margins and provide a boost to the bottom line. The company clearly has very strong liquidity having no debt to finance, $39.82 billion in cash on hand as of last quarter and a business that generated $30.60 billion in earnings before interest, taxes, depreciation and amortization in the same period. This affords it significant flexibility to take on debt if it wanted to pursue new growth opportunities such as an acquisition. The company had $39.82 billion in cash on hand last quarter compared to $30.60 billion a year earlier, a 30.13% increase. It continues to have no debt.

Our Economic Value indicator measures the company's ability to generate a true economic profit by taking into account not only the costs of running the business but also the cost of capital. In Apple,'s case, since the company has no debt, we only look at the cost of equity, which is to say the opportunity cost to an investor of having his capital tied up in the company's shares instead of some other investment. Based on its 12-month trailing operating income, Apple, generated a 43.21% return on $127.35 billion of invested capital. Since it has no debt this simply includes all forms of equity. Its after tax cost of equity during the last year was 8.75%, which, when deducted from its return on investment results in an economic value added, or EVA, of 34.46%. This is a remarkable return to its shareholders, more than justifying their investment in Apple,'s shares. The company recently reiterated its 2.65 cent a share dividend payout in its December 31, 2012 earnings report, which results in a 2.03% yield at the stock's current price. Apple, initiated its dividend payments during N/A and has been paying regularly since then. The $7.46 billion Apple, paid out in dividends during the last twelve months represents 17.88% of its after-tax earnings, a relatively small amount, yet a significant increase from the 11.93% payout in the 12 months ended just a quarter earlier. Total dividends paid in the last year also represent 13.16% of the company's total cash flow. The large payout increase doesn't raise any concerns about the company's liquidity since the overall payout level is still low and its fundamentals are generally healthy.

They have enough cash to acquire many companies to better Apple's selling platform. Something other companies can't even touch. That advantage alone can trump their competition if they really want to.


BOOM GOES THE DYNAMITE!!!!!!!!

 

[Denny Crane]

What part of comparing companies from different industries did you miscomprehend?

 

[BlazerCaravan]

I do have a legit question: why is Amazon rewarded in the stock market for running essentially a utility with tons of revenues but no profits? Their P/E ratio is nuts (3,000+%).

EDIT: as i wrote this, I chuckled at how P/E is the PER of the stock market, probably misued by just about everyone who also misuses advanced stats on Basketball Reference.

 

[magnifier661]

What part of comparing companies from different industries did you miscomprehend?

Oh give me a break Denny. Since I blew your weak argument of Amazon out of the water, you toss this "Sector" argument?!

Okay compare Apple to Dell, Microsoft, HP, IBM, etc. It's not even close. Fact is, Apple is one of the most efficient and profitable tech companies on the public market. The sooner you understand this the better your arguments on value can be made.

 

[magnifier661]

I do have a legit question: why is Amazon rewarded in the stock market for running essentially a utility with tons of revenues but no profits? Their P/E ratio is nuts (3,000+%).

EDIT: as i wrote this, I chuckled at how P/E is the PER of the stock market, probably misued by just about everyone who also misuses advanced stats on Basketball Reference.

If amazon had a down quarter, their company would be in serious trouble. Basically with Apple's available cash, they could not sell a single product for a solid 3 years and still stay in business. What other company can say this?

LOL about the P/E as being the "PER" argument!

Also, check this out!

http://finance.yahoo.com/q/bs?s=amzn

Amazon's balance sheet is fucking scary. Their sales are around 8 bil; yet their liabilities for doing business is 5 bil. Two down quarters could sink their ship.

 

[magnifier661]

So much easier to debate when I have a computer. The iphone debating is a terrible "handicap"!

 

[Denny Crane]

There's your imaginary price, and there's the real thing.

If you believe in your lack of knowledge about stocks, go all in.

 

[Denny Crane]

I do have a legit question: why is Amazon rewarded in the stock market for running essentially a utility with tons of revenues but no profits? Their P/E ratio is nuts (3,000+%).

EDIT: as i wrote this, I chuckled at how P/E is the PER of the stock market, probably misued by just about everyone who also misuses advanced stats on Basketball Reference.

Amazon is a growth company. They're like a railroad building its tracks. During that period, lots of expenses. But when the lines are all built, they reap the rewards. The market is factoring in the growth. Look at their sales, which have 4x in the past 5 years.

 

[Denny Crane]

Oh give me a break Denny. Since I blew your weak argument of Amazon out of the water, you toss this "Sector" argument?!

Okay compare Apple to Dell, Microsoft, HP, IBM, etc. It's not even close. Fact is, Apple is one of the most efficient and profitable tech companies on the public market. The sooner you understand this the better your arguments on value can be made.

Laugh at the PER comparison. It makes you look like you don't have a clue.

The big difference is that PER is meant to compare any two players, any season, etc. While PE ratio is truly valid when comparing companies in the same industry.

BlazerCaravan got it right.

 

[magnifier661]

There's your imaginary price, and there's the real thing.

If you believe in your lack of knowledge about stocks, go all in.

LMAO!!!!! Yes go with the drop after you just said that the stock market is emotionally driven. I am seriously thinking about going all in. Would you like a wager on the stock price? I will bet $1,000 that Apple will get to $500 after the next quarter.