|
Post by appledoc on Apr 20, 2013 14:07:47 GMT -8
Tuffet said it more elegantly than I could.
|
|
|
Post by rezonate on Apr 20, 2013 14:22:22 GMT -8
I wouldn't go with $350 for the iWatch. The Nike+ FuelBand is $149. Pebble is taking preorders for the e-ink screen for $150. Garmin sells "Quantified Self" watches between $139 and $349. Lark has a basic model for $99 and LarkLife for $149 to track exercise and sleep. Apple might decide to "aggressively enter the space" with a $199 model that's essentially an updated iPod Nano v6/7 with bluetooth, integrated battery and a couple additional apps. I'd say $249 tops to account for the Apple premium. R&D costs would be recouped in about two quarters. Target a May 7th announcement for a May 24th launch (US Memorial Day weekend).
|
|
|
Post by applemuncher on Apr 20, 2013 14:23:01 GMT -8
I thought my post was clear, but yes, I'm talking about the rate of earnings growth. I agree with you about the extra week and big GM numbers for FYQ212. But the bottom line is that the days of Apple showing EPS growth of 20%-40% are gone. I disagree. If earnings (expressed as EPS) are the result of Revenue multiplied by GM% (deducting other less significant items), then once beyond the compare to aberrant GM% periods (FQ1/12, FQ2/12, FQ3/12) we will begin to see EPS growth of 20% once again, and that's BEFORE Apple ups the ante with new product categories. There's a reason WS repeatedly describes AAPL as a 2nd half story. That reason has little to do with new products. EPS = Net income / Total number of capital stock shares This is the reason why a stock buy back would increase EPS. However, I am now very happy that Apple did not buy back a significant number of shares at higher prices. Did they see the drop coming?
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Apr 20, 2013 14:28:59 GMT -8
There's been zero (recent) chatter about iWatch from any of the sites you'd expect (Gruber, Dalrymple, iMore, NYT, WSJ...) Now you might say it fits Apple's tone-deaf narrative perfectly ("forget dividends, buybacks, share splits, better PR, new iOS, big iPhones, new iPads, new Mac Pro, WE NEED US A WATCH!"), but "bad timing" aside, there haven't been any supposed part leaks.
Maybe a little early to be thinking iWatch pricing. Except to guess that it'll cost more than the nano. That seems pretty much a given.
|
|
|
Post by artman1033 on Apr 20, 2013 14:51:02 GMT -8
I could say "I don't see an iWatch coming."
BUT I only have so much room on my signature for mistakes I post.
|
|
|
Post by archibaldtuttle on Apr 20, 2013 15:05:57 GMT -8
I don't really understand the comparison, but I wish I was sponge... he certainly seems to have more money left in his account than I do.
|
|
|
Post by sponge on Apr 20, 2013 15:29:20 GMT -8
Hey come Monday when Etrade forces me to sell more I will only have about 13.5% left from Sept. But it is only money and it will recover. Please see my signature.
|
|
|
Post by tuffett on Apr 20, 2013 16:41:49 GMT -8
Total fail, tuffett, right? Considering that iWatch is a pipe dream and only in the rumor phase. I would also add: "No wireless. Less space than a nomad. Lame." And why would anyone drive a Tesla when they can drive a Prius. And why would anyone buy a Fiat 500 when they can get a Hyundai with more space, standard power and close-enough fuel economy. I'm fully aware of Apple's ability to price things at a premium. But if the iWatch is going to be primarily an accessory to iPhone/iPad, a $350 price point makes very little sense. For the record, I was not one of the people who thought the iPad Mini needed to be $199 or $249. I was perfectly happy with the $329 price point, which many thought was too high.
|
|
|
Post by appledoc on Apr 20, 2013 17:10:34 GMT -8
This is the reason why a stock buy back would increase EPS. However, I am now very happy that Apple did not buy back a significant number of shares at higher prices. Did they see the drop coming? Eh. If Apple was buying back shares as part of a significantly more aggressive program than what they have now, I don't think we'd be where we are. Even if Apple just made the threat of having a more aggressive program in place, we wouldn't be where they are. The cash issue is the biggest drag on share price right now IMO. WS doesn't give a damn that they'll have $150B in the bank by the end of the year if it's just sitting under a mattress.
|
|
|
Post by applemuncher on Apr 20, 2013 17:17:50 GMT -8
Cash use is an issue, but I think flat to negative EPS growth is a bigger factor. That said, it would be nice if the BoD authorized $50-$100B for buy back over the next two years.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 20, 2013 17:22:58 GMT -8
Eh. If Apple was buying back shares as part of a significantly more aggressive program than what they have now, I don't think we'd be where we are. Even if Apple just made the threat of having a more aggressive program in place, we wouldn't be where they are. The cash issue is the biggest drag on share price right now IMO. WS doesn't give a damn that they'll have $150B in the bank by the end of the year if it's just sitting under a mattress. Cash is nice, and certainly helps justify valuation, but investors buy the future You cannot justify Amazon's price/multiple on its cash holdings, nor can you do so with Google, or Yahoo, or any other publicly traded companies. The value of AMZN (Facebook?) is totally about the future potential for revenue and earnings, as is the valuation of companies/startups that don't have earnings today, but are expected to have them in the future.
|
|
|
Post by rickag on Apr 20, 2013 18:04:17 GMT -8
Cash use is an issue, but I think flat to negative EPS growth is a bigger factor. That said, it would be nice if the BoD authorized $50-$100B for buy back over the next two years. I know it won't happen, but rather than a stated dollar amount for a buy back I would prefer they state a number of shares to be bought back over a longer time frame. When they announced the limited buy back to eliminate share creep I believe Apple had 947 million shares outstanding. I wonder what the effect would be if they announced a plan to reduce the outstanding shares to 500 - 700 million over a 10 or 15 year time frame.
|
|
|
Post by macoz on Apr 20, 2013 20:09:57 GMT -8
Cash use is an issue, but I think flat to negative EPS growth is a bigger factor. That said, it would be nice if the BoD authorized $50-$100B for buy back over the next two years. I know it won't happen, but rather than a stated dollar amount for a buy back I would prefer they state a number of shares to be bought back over a longer time frame. When they announced the limited buy back to eliminate share creep I believe Apple had 947 million shares outstanding. I wonder what the effect would be if they announced a plan to reduce the outstanding shares to 500 - 700 million over a 10 or 15 year time frame. The actual number of share outstanding at end of 1QFY13 (29 Dec 2012) is 939 million shares. The weighted-average diluted shares is 947 million. The difference between the two figures is to account for outstanding share options and perhaps RSUs. Not sure about the RSUs though.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 20, 2013 20:56:47 GMT -8
The actual number of share outstanding at end of 1QFY13 (29 Dec 2012) is 939 million shares. The weighted-average diluted shares is 947 million. The difference between the two figures is to account for outstanding share options and perhaps RSUs. Not sure about the RSUs though. EPS is calculated using fully diluted shares. I like the idea that Apple set a public share count goal vs a dollar amount. Unfortunately, that would be akin to announcing that Apple wanted to buy XYZ Company in September. Just think what would happen to the shares of XYZ Company after that announcement. Yes, that would benefit AAPL shareholders, but think of the monies Apple would have to part with to accomplish its goal vs what the Company would have to spend by keeping its mouth shut. The extra expense might easily offset the perceived value gains in AAPL. That's purely a theoretical argument, but not one I think Apple would want to test.
|
|
|
Post by bloodylongaapl on Apr 21, 2013 2:48:52 GMT -8
Justifying EPS contraction by blaming it on unsustainable quarters of GM of the past is insane. Guess what? The ride to 705 was based in part on those massive GMs that Apple was churning out. Given what you're saying, 705 must have been fundamentally wrong because of unreasonable future EPS growth expectations secondary to unreasonable GM expectations. The quarters should have been treated as abberrtions and not cause for the rocket ship to takeoff. I agree. But 705 being "wrong" does not make <400 "right". Nor even <500 imho.
|
|
|
Post by mstrmac on Apr 21, 2013 2:55:00 GMT -8
|
|
|
Post by appledoc on Apr 21, 2013 4:41:33 GMT -8
Eh. If Apple was buying back shares as part of a significantly more aggressive program than what they have now, I don't think we'd be where we are. Even if Apple just made the threat of having a more aggressive program in place, we wouldn't be where they are. The cash issue is the biggest drag on share price right now IMO. WS doesn't give a damn that they'll have $150B in the bank by the end of the year if it's just sitting under a mattress. Cash is nice, and certainly helps justify valuation, but investors buy the future You cannot justify Amazon's price/multiple on its cash holdings, nor can you do so with Google, or Yahoo, or any other publicly traded companies. The value of AMZN (Facebook?) is totally about the future potential for revenue and earnings, as is the valuation of companies/startups that don't have earnings today, but are expected to have them in the future. IMO, cash and other tangible assets provide a floor in share price. I don't know the breakdown, but I would wager that Apple's cash, physical assets, patents and brand name alone are worth close to the $366B market cap WS has assigned us. That would put absolutely zero value on the future, which would be absurd even in the most bearish of views. That cash pile is no longer contributing to a floor, since it's basically just sitting there. The buyback program's reach is just slightly better than trivial. The dividend is only now appealing because of how far we've fallen. Something needs to be done with that cash to support the share price, and it needs to be done soon. And yes, I fully agree that concerns over future earnings are weighing is down too. But there is ZERO doubt in my mind that had a cash plan been announced back in December, we never would have come close to breaching $400.
|
|
|
Post by Red Shirted Ensign on Apr 21, 2013 5:54:42 GMT -8
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 6:16:18 GMT -8
One is guessing 48B in sales. There's a better chance I'll wake up in bed next to Shu Qi on Wednesday morning then THAT happening.
|
|
mark
fire starter
Posts: 1,544
|
Post by mark on Apr 21, 2013 6:17:27 GMT -8
Justifying EPS contraction by blaming it on unsustainable quarters of GM of the past is insane. Guess what? The ride to 705 was based in part on those massive GMs that Apple was churning out. Given what you're saying, 705 must have been fundamentally wrong because of unreasonable future EPS growth expectations secondary to unreasonable GM expectations. The quarters should have been treated as abberrtions and not cause for the rocket ship to takeoff. I agree. But 705 being "wrong" does not make <400 "right". Nor even <500 imho. Of course, if the market didn't overshoot periodically, it would be more difficult to earn outsized gains ;D
|
|
mark
fire starter
Posts: 1,544
|
Post by mark on Apr 21, 2013 6:20:12 GMT -8
Cash is nice, and certainly helps justify valuation, but investors buy the future You cannot justify Amazon's price/multiple on its cash holdings, nor can you do so with Google, or Yahoo, or any other publicly traded companies. The value of AMZN (Facebook?) is totally about the future potential for revenue and earnings, as is the valuation of companies/startups that don't have earnings today, but are expected to have them in the future. IMO, cash and other tangible assets provide a floor in share price. I don't know the breakdown, but I would wager that Apple's cash, physical assets, patents and brand name alone are worth close to the $366B market cap WS has assigned us. That would put absolutely zero value on the future, which would be absurd even in the most bearish of views. That cash pile is no longer contributing to a floor, since it's basically just sitting there. The buyback program's reach is just slightly better than trivial. The dividend is only now appealing because of how far we've fallen. Something needs to be done with that cash to support the share price, and it needs to be done soon. And yes, I fully agree that concerns over future earnings are weighing is down too. But there is ZERO doubt in my mind that had a cash plan been announced back in December, we never would have come close to breaching $400. Typically, the companies valued based on cash and tangible assets alone are companies that are going out of business. Going concerns are valued more for their future streams of income, and if they have lots of cash, how they plan on using that cash to increase income. Right now, a buyback is the best use of that cash that I can see. Perhaps in a few weeks we get an announcement of $40-50B buyback?
|
|
|
Post by Red Shirted Ensign on Apr 21, 2013 6:30:47 GMT -8
One is guessing 48B in sales. There's a better chance I'll wake up in bed next to Shu Qi on Wednesday morning then THAT happening. Yes, she asked me to let you know she won't be there. Wants a tour of the Enterprise instead. I'll make it so... I'm glad some of our permabulls are consistent across different forums..... And, I am glad EVERYONE has come down to a reasonable range of revs and EPS. PED did a nice job of explaining the no sandbagging world we now live in. Here's to a modest beat and stronger than expected guidance.....
|
|
|
Post by artman1033 on Apr 21, 2013 6:49:15 GMT -8
this just in:
THE $15 MILLION IPHONE
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 6:55:02 GMT -8
One is guessing 48B in sales. There's a better chance I'll wake up in bed next to Shu Qi on Wednesday morning then THAT happening. Yes, she asked me to let you know she won't be there. Wants a tour of the Enterprise instead. I'll make it so... There's a better chance you'll wake up Wednesday with a full head of hair. ;D RE: PED's table. I'm smack in the middle at $43.05B in sales and $10.81 EPS.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 6:58:12 GMT -8
this just in: THE $15 MILLION IPHONEIt's rather telling they chose an iPhone and not a Galaxy phone...
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 7:06:31 GMT -8
Undated pic of Red trying to time the market with buying more AAPL: Is it safe yet?
|
|
|
Post by Red Shirted Ensign on Apr 21, 2013 7:09:16 GMT -8
Undated pic of Red trying to time the market with buying more AAPL: Is it safe yet? You have to "pick" your spots....
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 7:13:05 GMT -8
I would expect the iWatch to get bigger, and the holiday quarter with no shortages in any products combined with 41% margin will give us at least 15% eps growth YOY. iWatch, what iWatch? I missed Apple's announcement. When does it start shipping? Just to bring you up to date on the latest iWatch news:
|
|
|
Post by osx10 on Apr 21, 2013 7:25:51 GMT -8
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Apr 21, 2013 7:40:15 GMT -8
I agree. But 705 being "wrong" does not make <400 "right". Nor even <500 imho. Of course, if the market didn't overshoot periodically, it would be more difficult to earn outsized gains ;D Its the market's REACTION to Apple's FQ2/2013 results that concerns me, not the results themselves. Should Apple perform to the average delta between guidance vs results of the past 3 quarters my estimates are going to be spot on. Clearly (look at PED's latest chart), the market is reacting to a perception that Apple isn't doing well, when the fact is that the only thing that has changed is the manner of management's guidance. No credit is being given to revenue growth or unit share growth. All attention is laser focused on Apple's performance relative to expectations and a false YoY GM% compare. This is in large part the fault of idiots, such as those on CNBC, that place their reporting focus on such misinterpreted items.
|
|