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Apple Reports Fourth Quarter Results

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Re: Apple Reports Fourth Quarter Results

#51

Post by tinkerrr »

stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

I am long apple too, but -

1. The P/E is low because of the future growth potential. Investors don't think it can grow at this pace in the future. It's not like a Coca Cola which grew earnings consistently in the double digit percentages over decades.

2. ApplePay has a lot of potential, but not in terms of moving the needle in earnings anyway. A billion dollars here and there isn't enough for Apple to significantly improve earnings. The company is just too big.

3. Same as 2.

The market will price the stock according to the risk it perceives. If you think you know the business better than the market, only then trust your own analysis and declare the market to be wrong and your analysis to be right. That's what value investing is all about anyway.

Re: Apple Reports Fourth Quarter Results

#52

Post by sz4kerto »

stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

> Apple's P/E is way to low for a company that literally sells the best and highest rated products on the marke

Nobody really cares of this. The price and P/E doesn't have to do anything with 'how good the products are' (well, not too much at least). What (essentially) matters is risk -- upside and downside risk. Apple looks quite safe at the moment with little upside risk (it's not probable that they'll suddenly double their revenue, but they make a lot of money) and not too much downside risk (very-very little probability of failure, but if something like the iPhone loses its profitability then there isn't really anything else to rely on).

Microsoft has exactly the same PE, but it's different. The upside characteristics are the same (not too probable that it's going to grow a lot), but the downside risk is different: Microsoft has many 'legs', it's very unlikely that a large part of their profit just disappears because of losing in one particular market segment, but it's quite likely that they will lose one or two profitable segments

Re: Apple Reports Fourth Quarter Results

#53

Post by kolbe »

stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

I don't know who in the world would want to own AAPL at 20x earnings. They're one big breakthrough by Samsung or Google (or whomever) from having their revenues cut by 90%.

Re: Apple Reports Fourth Quarter Results

#54

Post by imaginenore »

stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

> Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market

That assumes that Apple can grow much bigger. Can it? I don't know, there are not that many high end markets out there.

Their growth is slowing down and even reversing it seems:

Annual: http://i.imgur.com/lHgSuIg.png

Quarterly: http://i.imgur.com/FJd5P1h.png

Re: Apple Reports Fourth Quarter Results

#55

Post by ChuckMcM »

arrrg wrote: post #5
ChuckMcM wrote: post #2

Nicely done. The market seems enamoured with larger phones. And it is good validation for Tim Cook given their sales rate.

iPads aren’t doing so well, worse than analysts expected (but we have known this now for quite some time so it isn’t exactly a surprise). Everything else is pretty much above analyst expectations, weirdly enough, even the iPod (who still buys that?). To be honest, as a consumer I would be ok with this, if not for the software ecosystem. (I like the iPad and it’s useful to me personally. What do I care whether it sets…

Generally I agree with that. I was underwhelmed by the iPad Air 2 intro (and name for that matter :-). One of the things that stands out for me is that people with "large" phones tend to talk on them with a headset. Once you make that jump then the size of the phone becomes somewhat irrelevant.

I keep hoping they will add phone capabilities to the iPad mini, and create a larger version of the iPad air. The notion earlier of checking out the Surface Pro 3 intrigued me, it is a nice piece of hardware but the reading experience is not as nice as the iPad. We'll see.

Bottom line I agree that from this report it seems like iPad is under performing the rest of the portfolio. Tim if you're reading please make a 12 - 13" iPad, I'll buy one of those today if you make it. :-)

Re: Apple Reports Fourth Quarter Results

#56

Post by MCRed »

stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

I've always found the idea of diversification as a rule, or for its own sake to be troubling.

Say you have 100k. You could put it all in Apple, or put 99k in Apple and then buy puts to protect against a sudden decline in Apple with the remaining 1k. (might cost more, not sure.)

Or you could split it up into 6 companies. Are any of the other 5 going to be as high quality as apple?

I think diversification comes from the belief that you can't pick stocks so you might as well pick several and hope they work out on average.

I think that this is not so much the case when you spend a bit of time investigating. I've not found it to be the case, at least. (What I can't do is pick timing, but I can pick stocks, pretty reliably for 20 years or so.)

Right now Apple is at $100ish, and a Jan 2016 $90 put would cost $8ish.

This means that the most you could lose in that time period is %18 of your money... and that's assuming the company completely craters.... if it just drops to $90 because they multiply the dividend by a lot, you don't really care.

If, however, a nuke hits cupertino, you're covered.

I like that a lot better than guessing what Tesla will be at in the future. (I think Tesla is a good company, for instance, but the risk is orders of magnitude higher.)

Re: Apple Reports Fourth Quarter Results

#57

Post by afterburner »

wiredfool wrote: post #7
IBM wrote: post #4

Apple at $400 will likely be the best value investment of my career.

Apple at $12 (pre split, ca 1996) is the whale that got away of my investment career.

You're missing hundreds of these kinds of opportunities every year... don't be too sad.

Re: Apple Reports Fourth Quarter Results

#58

Post by MCRed »

sz4kerto wrote: post #52
stephen-mw wrote: post #38

I'm long in apple for several reasons: 1. Apple's P/E is way to low for a company that literally sells the best and highest rated products on the market. Historically you pay a P/E _premium_ for these types of stocks, not a discount. The company is downright cheap. 2. ApplePay has a ton of potential. Just in the other news thread others were complaining that moving to chip & pin cards is basically just changing the f…

> Apple's P/E is way to low for a company that literally sells the best and highest rated products on the marke Nobody really cares of this. The price and P/E doesn't have to do anything with 'how good the products are' (well, not too much at least). What (essentially) matters is risk -- upside and downside risk. Apple looks quite safe at the moment with little upside risk (it's not probable that they'll suddenly dou…

The P/E is a quick proxy for the bond return. Lower the PE relative to reliable, conservative growth, the better the return.

High quality products mean it's unlikely they will release something that shoots them in the foot.

Microsoft, on the other hand, is constantly shooting itself in the foot financially -- from their danger based phones to the slate to the xbox (a lot of market share but also a lot of losses.)

Thus MSFT and AAPL having similar PEs shows that apple's PE is lower than it should be.

People have never believed in Apple, or never "got" it. This is why they thought it would fail without Jobs, they don't understand it.

this is why they discount it.

When they discount it, as measured by PE, this gives the investor opportunity.

Re: Apple Reports Fourth Quarter Results

#59

Post by niels_olson »

MCRed wrote: post #49

The interesting conundrum here, as I see it, is that the iPad is losing its purpose. Before, it was between phones- which were small-- and laptops-- which were big. But the Air is becoming a lot more mainstream, laptops overall are becoming knife thin, and phones are getting bigger. I think the iPad was meant to replace the PC for most use cases-- e.g. the email, web surfing etc. and I think it's been somewhat succes…

If you project the future of computing by looking at serious hackers, perhaps project the future of reading by looking at the habits of serious readers.

I think the magazine form factor is here to stay. I definitely prefer reading journal articles in PDF or paper over html, and in PDF form, I prefer my iPad to my phone or my daughter's iPad mini. I was just at a friend's house yesterday. He had a similar problem with his smaller droid tablet, and he was showing me his 12" droid that he recently bought to solve this exact same problem of reading journal articles.

Re: Apple Reports Fourth Quarter Results

#60

Post by [deleted] »

liquidise wrote: post #45
mkr-hn wrote: post #41

Earlier quoted context omitted.

I only know a few people who use a Mac. Most people I know use Windows (and Android). As always, anecdotes are not the same as data.

Under the age of 32? 100% of windows users i know of in that demographic do so exclusively for PC gaming. Anecdotes will always be less useful, but this strikes me as a repeatable trend among college campuses and young professionals... to say nothing of a generation of children growing up with iPads.

[deleted]
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