Lets bring out the inner chartists’ in us and call the bottom on AAPL
I say $498.11
why? no fucking clue
If it’s going to bounce, wouldn’t it bounce at the round number $500 and not break that support level?
I have no clue, I don’t follow this stock other than to have a general contempt for it. I do seem to recall though that not too long ago a lot of people were saying how cheap it is based on the P/E multiple. I’ve been saying for a long time that Apple is a marketing company, and this is a fad – they make commodity products and competitors are catching up. Stupid me, I did not parlay that into a short position in the stock. Apple’s star is fading and this stock could go much much lower as fanboys realize that and hedge funds dump en masse.
What’s kind of amazing about this stock is that it’s lost $150 billion of market cap in less than two months (holy over valuation, Batman!).
From a valuation standpoint I’m interested at $525. But, I need to wait to see what the hedge funds do. Apple is the largest hedge fund holding so if they panic and all exit at the same time this thing could sink fast. If/when the panic subsides, I’ll pick some up.
I say $500 if they keep up the fad.
I can see AAPL down to $400 on the premise that IPAD/IPHONE sales decline over the next two years. $300 would not be too high in 2 years + time.
This company is on the demise.
however it is still too early for me to make fun of the apple fanboys that said I’m wrong.
If they don’t at least signal something new, I put them around $480-490 in the next 12 months and lower the further out I look.
When I say something new, I don’t mean a small line extension like the ipad mini or these small upgrades to the iphone. I mean another category where they can redefine the space, like they did with phones. It doesn’t have to be tv, but that’s the usual go-to example.
I don’t have a position in AAPL because I have no idea whether or not they’ll come out with that something new.
Without “something new” it seems like their stock can go down by half. It’s pretty easy to see them going from 40% operating margin to 15% operating margin… Maybe someone has some numbers…
This would be my thought process exactly. I haven’t punched out any numbers (or ever looked at this stock in detail), but why do people feel that a company making commodity hardware products should earn a 40% operating margin? One thing the Street has done habitually since the dawn of financial time is to overvalue companies with high profit margins. It sounds like a good thing because who doesn’t like lots of profits? But it attracts competition. The technology lead AAPL enjoyed five years ago has closed today as people have caught up or even surpassed the iPhone in functionality. So basically iPhones are overpriced today based on the AAPL brand, with increasing competition – most likely, prices will fall or AAPL will lose share over time. It’s hard to see why that scenario warrants a 40% operating margin.
The only flipside argument would be that AAPL has an ecosystem of products that warrants high prices – if you make that argument, you are essentially arguing that consumers are stupid and not price sensitive at all. And while I agree that many people are in fact stupid, I think that’s a pretty poor way to think about economics and human behavior, especially in a digital world.
The moral is, high margins are dangerous (particularly high gross margins) becaue they attract competition. I would rather have a company with lower margins and super fast asset turns (the cash production could be equal or higher in that scenario). It’s harder to attack the second example. High margin, high ticket discretionary purchases are inherently attackable, especially if a company was first mover with no barrier to entry and has high market share. High share + high margins + no barrier, that has to come down over time.
Maybe there is a silver lining for AAPL that is only evident upon closer inspection, but it certainly doesn’t sound good.
It looks like its closer to 35% (55 / 157 in FY12), but that’s still far too high.
I don’t think others have caught up. Its more like Apple has saturated the market with its own products.
They had turned a hardware single payment market into a psuedo subscription based model where people continued to ‘renew’ their old apple products with the new ones. Unfortunately, that can’t go on forever
In the near-term, say 1-2 years, I’m less concerned about margin compression than I am about slowing topline growth. Apple is a growth and momentum darling. If/when their growth rate falls - as a result of an organic decline in sales - those people will flee. What makes the stock strange is it doesn’t have a high growth premium on it. Trading around 12.5x earnings is unheard of for the growth stock.
It’s saturated as well probably. Others have caught up though. Samsung products are legit. No question AAPL has far better branding, but if you’re going to buy an iPhone, you already have and may be one of the people upgrading regularly. If you haven’t yet, you’re not buying an iPhone and are probably fine with any other product that is close enough comparable at a better price. The products are good, but they crossed over the mythical / fad territory and that can’t last forever.
But is that 12.5x peak EPS? Do we feel that this is an 8% earnings annuity for more than a decade to come?
STL…you gotta remember, a trailing 12.5x assumes recurring sales…its hard to recur those revenues really…
I don’t think Apple sales will decrease (although they might grow more slowly). Consider that the overall market for smart phones and tablets is increasing. So, Apple could even grow sales while losing market share. However, once competition makes similar products to Apple for cheaper, Apple might need to decrease margins…
YoY they’ve increased sales about 44%. A year before that their growth rate was 66%. Sales are slowing, but 44% is still unbelievable. I’d start to worry if YoY sales dip below a 20% growth rate. Actually going negative anytime soon? Not going to happen.
Apple has a lot of further opportunities for expansion, especially in desktops and virtualization, and they don’t need to keep a high growth rate to do well. This industry is going to continue to change rapidly and I think their business model might change.
I’ll go long Apple if I have the confidence in their management team, which I don’t as of yet.
iPanel folks. Wait for it. Big. Big. Big.
The lower it goes the better.
I don’t know about this iPanel stuff… How much will a 50" Apple TV cost? Apple’s vision is to have a family of four own four iPads. The way forward for them is individualization, not consolidation.
buying apple here means absolutely no downside protection…at these prices, its aggressive…purely offense tactic…
Agree with Frankie Boy on this one, there is zero downside protection. They have to continue innovating and at some point they are going to screw up or miss the next big thing akin to RIMM. It amazes me the fools that follow it so much. If it were to double it would have a market cap of $1T… what is the likelihood of that happening?