chinacat
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Post by chinacat on Feb 20, 2015 16:21:52 GMT -8
Well, I was hoping for $130 this week, and I suspect I was not alone. But a fifth straight green week and another All Time Closing High is pretty good, especially when the resident chartists still seem pretty bullish. If nothing else, Car Talk helped to reinforce for the world at large what all AFBers know deep in their hearts - Apple has both the talent and resources to take on just about any challenge. WATCH talk is definitely heating up, and I for one am eager to see what Tim and Angela have cooked up for what should be a very new and different kind of retail presentation. The timing looks perfect, coming as it will just in time to pick up the momentum from what should be another excellent quarter. Oh yeah, and Spring is just around the corner...isn't it? PLEASE!?!?!?!? I definitely need a hot toddy. What will you have?
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Post by macwire on Feb 20, 2015 16:46:53 GMT -8
drinking japanese hibiki whiskey
delicious
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Post by Red Shirted Ensign on Feb 20, 2015 16:59:37 GMT -8
What a great week. I can feel the vibrations beneath my feet. The AAPL cat is getting ready to roar.
Just thinking ahead about what our posts might look like only 90 days from now...new products out, new distribution systems, new dividend and buyback program in place. Mercel will have finally gotten a date for the Prom.
Exciting time!
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Post by macwire on Feb 20, 2015 18:58:26 GMT -8
What a great week. I can feel the vibrations beneath my feet. The AAPL cat is getting ready to roar. Just thinking ahead about what our posts might look like only 90 days from now...new products out, new distribution systems, new dividend and buyback program in place. Mercel will have finally gotten a date for the Prom. Exciting time! You totally forgot the stock selling off 4 percent when they announce a 20,000 dollar gold watch
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Post by archibaldtuttle on Feb 20, 2015 19:39:32 GMT -8
All the entrail indicators suggest we're due for a couple week period of consolidation or profit-taking. But I think the car rumors prevented that from happening this week... any dips were bought and then some.
Will some FUD catch on next week, inciting a profit-taking week or two? Or will we push to even more extreme levels of green...?
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JDSoCal
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Post by JDSoCal on Feb 20, 2015 20:23:23 GMT -8
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Post by chasmac on Feb 20, 2015 20:47:27 GMT -8
Wonder if you're going to be able to try on a watch at the store? Security issues will be interesting.
Love the car chatter, nice post by Since84. Imagine an electric, driverless car that lets you watch TV, read, surf the Net or work out with a sleek exercise pod that generates power and credits for your ride, all tied into your health system.
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bud777
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Post by bud777 on Feb 20, 2015 22:07:43 GMT -8
I think discussion of the watch or the possibility of a car is like commenting on the size of successive waves at the shore and missing that the tide is coming in. Last quarter Apple sold as many phones in China as they did in the US. China Mobile is adding 4G subscribers at the rate of 20 million a month. Anyone buying a 4G phone is looking for either functionality or status. If they want functionality, they choose IOS over Android. If they want status, they choose Apple over Xiaomi or Samsung. If they choose on price alone, 35% of them switch to Apple. April could be a quarter that makes us forget about last quarter, the best in history.
I think that even a lemming can see this coming. I would not be surprised to see this rally continue another 10-15 points. If it did, Apple would STILL have a lower P/E than the average S&P 500 company.
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Mav
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Post by Mav on Feb 20, 2015 23:38:18 GMT -8
I don't think it was that close bud, considering Greater China sales. Though if Tim Cook says Greater China will one day be Apple's biggest rev geo I ain't gonna dismiss it by any means.
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Since84
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Post by Since84 on Feb 21, 2015 4:41:47 GMT -8
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Post by phoebear611 on Feb 21, 2015 5:53:44 GMT -8
Mace - macwire - and several other TF folks ... can you look at the charts and tell us what you are seeing at this juncture?
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Post by macwire on Feb 21, 2015 7:12:07 GMT -8
Mace - macwire - and several other TF folks ... can you look at the charts and tell us what you are seeing at this juncture? funny you should ask, just was pouring over my stuff.... passed my 1.6 fib extension, means the next target 2.6fib extension is way up toward 145, time frame stretches into the summer imo we are sitting on the weekly chart with RSI approaching overbought but also achieved a recent bullish MACD cross. 5 straight weeks of gains. we have had two straight weeks closing out of the top of the weekly BB. That is not all that unusual - when aapl trends strong it rides that upper bollinger for a few weeks. on the daily chart RSI is already overbought overbought oversold never a reason to sell in and of itself but if you look at the prior instances of daily RSI approaching 80 the stocks begins to trade really whacky (last approach, we had that fat finger day that led to a few weeks of nothingness. my WAG is we push higher into the week with the market a few more sessions before we likely close with a kind of doji candle...which would lead to a few weeks of consolidation. My personal trading plan is to use last weeks low as my stop on positions and trimming positions. I still have a few days to mull it over but i did wake up first thing and start pouring over charts, lol so its top of mind. weekly: daily: trade em good. been a great few weeks. will be drinking some highland park tonight,
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Post by artman1033 on Feb 21, 2015 7:16:58 GMT -8
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Post by Red Shirted Ensign on Feb 21, 2015 11:39:46 GMT -8
From the February 21st edition of Barron's:
"Apple âs success with bigger iPhone screens has helped expand its stock valuation. The shares have climbed to $129 from a split-adjusted $76 since we recommended them nearly a year ago (âFor Apple, Bigger Is Surely Better,â March 24, 2014). They now go for 14.8 times projected earnings for the next four quarters, up from 12 times.
Apple CEO Tim Cook has lots of reasons to smile, including the iPhone 6âs smashing success and the potential of a coming line of smartwatches. Photo: Noah Berger/Bloomberg News
The last time Apple (ticker: AAPL) hit a major peak, at about $100 in September 2012, its shares had a slightly lower price-to-earnings ratio than now, and a more diversified business mix, with iPhones making up barely half of sales, versus closer to two-thirds now. The shares went on to tumble 40% in less than a year. Might Apple now be topping out again?
Unlikely. Look for the stock price to rise to $160 over the next year for a 25% return including dividends. Expect a big dividend hike when the company updates its capital-return program, likely in April. The current yield looks undersized at 1.5%.
Put product speculation aside for the moment, and consider a few things about the stock valuation. First, Apple sits on cash and investments worth $30 a share, up from $18 a share back in September 2012. Net of this cash, the shares are cheaper than they appear.
Second, Appleâs earnings are unusually clean. Management doesnât point investors toward a spiffed-up measure of earnings that excludes things like the cost of issuing stock to employees, as many big tech firms do. The $8.53 a share that Wall Street predicts Apple will earn in its current fiscal year, through September, is calculated under generally accepted accounting principles, or GAAP. Contrast that with, say, Facebook, which is expected to report adjusted earnings of $1.96 a share this year, but GAAP earnings of only 96 cents. Or Google, projected to earn an adjusted $28.71 a share, but $23.11 under GAAP. Apples to apples, you know who shines.
Third, Appleâs free-cash generationâwhat matters in the long run for paying dividends, buying back shares, and investing in new gadgets and servicesâeasily exceeds its earnings. Only part of the difference is explained by stock compensation reducing earnings but not free cash. Apple whips through merchandise so quickly that it enjoys whatâs called a negative cash-conversion cycle, meaning it collects money from customers faster than it pays suppliers. Thatâs rare. Wall Street expects Appleâs free cash flow to total $10.17 a share this fiscal year, or 19% more than its earnings.
Put it all together and Apple trades at an enterprise valueâa measure that adjusts the stock market value for debt and cash holdingsâof 10.1 times projected free cash flow for calendar 2015. That puts it on par with Hewlett-Packard (HPQ), and makes it 11% cheaper than Microsoft (MSFT). Companies like General Mills (GIS) and Procter & Gamble (PG), which investors flock to precisely for the ability to turn out steady cash, carry enterprise values closer to 25 times free cash flow.
That raises the question of whether Apple can continue to grow after the runaway success of the iPhone 6. It already enjoys about a 20% market share in smartphone unitsâand more than a 90% share in smartphone profits, in part because its average selling prices are more than double the industry average. That would seem to set Apple up for impossible comparisons starting around this Christmas, when it will lap the first full quarter of iPhone 6 sales. And yet, earnings estimates for more distant quarters have been rising. For example, Wall Street now predicts that Apple will earn $2.28 a share in the quarter a year from now, ending in March 2016. Five months ago, the estimate for that quarter was under $2.
ONE REASON THAT DISTANT estimates are pushing higher may be gathering confidence that the iPhone has more upside. Only 15% or so of the user base has upgraded to the 6 so far. If history repeats, Apple will launch a 6s model in the fall with a similar design and improved specs and software. Confidence may also be rising in the forthcoming Apple Watch, which bulls say could add 10% to fiscal-2016 revenue (âThe Apple Watch Could Bring In $23 Billion Next Year,â Tech Trader, Feb. 16). If the watch is a hit, Apple Pay could be, too. Piper Jaffray Apple analyst Gene Munster thinks that Apple will launch a new Apple TV set-top box this fall with gaming and home-automation capabilities and perhaps bundled content to compete with cable. That could pave the way for a television. And Apple is reportedly gearing up to produce a car by 2020.
None of these alone will send the stock soaring. For example, an Apple car might sound exciting, but even adding Fordâs market value to Appleâs would lift shares just 9%âand Apple is surely not going to become Ford anytime soon. But together, the products and rumors suggest that the Appleverse is still expanding, as Apple finds new pain-in-the-neck activities it can make sleeker and easier with a combination of hardware and software.
As the numbers stand now, Wall Street forecasts a 32% earnings-per-share jump this fiscal year on the strength of the iPhone 6, followed by 7% and 6% increases in the two following years. A rise to $160 in a year would put the shares at 17 times forward earnings estimates, where the Standard & Poorâs 500 index trades today. Considering Appleâs understated earnings, its cash hoard, its avenues for growth, and its history of beating expectations, itâs time for the stock to carry at least a market valuation, if not a premium."
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Mav
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Post by Mav on Feb 21, 2015 12:51:38 GMT -8
That's...a pretty good take. But I'm biased.
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JDSoCal
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Post by JDSoCal on Feb 21, 2015 13:23:16 GMT -8
Whoa, way, way off topic! There is simply no cause or place for reasoned fundamental analysis when discussing publicly-traded corporations. This is 2015, man, get with the times!
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JDSoCal
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Post by JDSoCal on Feb 21, 2015 17:20:51 GMT -8
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Mav
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Post by Mav on Feb 21, 2015 18:14:25 GMT -8
TL;DU (too long; didn't use). The coupons. Because the receipt was - never mind. (image source BuzzFeed, don't think they'll mind THAT much)
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Mav
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Post by Mav on Feb 21, 2015 18:32:39 GMT -8
Cybart's not bad (maybe I'm just jealous he gets more hits than my mega-niche, unpracticed blog ever will), but my guess is he's not gonna be right on this. As of now, Apple's "bought back" about 11-12% of itself from that "peak" of 6.6B diluted shares or whatever. That took seven quarters of furious repurchase activity, at a overall cost basis <$100 per share, to do. Almost $71B spent aside from that one "small" $2B buy in FQ1 2013. To reduce the share count almost another 10% would take another $70B in share repurchases TODAY, net of share-based compensation expense (probably over $3.5B per year for FY 2015). If Apple hits $150 by this year, and it might, we're looking at a market cap approaching $900B. And then, $70B won't do it anymore. Meanwhile Apple has to spend probably $12B+ this year just to pay dividends. While Apple is a cash generation monster, it seems decently conservative in protecting Apple US from being overburdened with debt. You can't assume Apple to repurchase 50 frickin' billion dollars a year just because it bought the dip in 2014. It "only" has $20B in spare cash at Apple US (the same source from which it must pay all dividends and bond interest). Apple's domestic cash during the Capital Return Era(tm) has never been higher than $43B. And it's "only" growing in the Americas at around 20% YOY (rev basis) in its PEAK quarter, FQ1 2015 (9% YOY in 2013; 4% YOY in 2014 - South America growth probably helped here). Apple needing the US cash to, well, run the business aside? There will be a point where S&P AND bond investors won't give Apple the same great borrowing rates as it currently enjoys. Gross cash is quite irrelevant if Apple borrows $25B for three years. You'll get >$200B in "gross cash" but >$110B in debt.
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Post by mace on Feb 21, 2015 18:54:55 GMT -8
Mace - macwire - and several other TF folks ... can you look at the charts and tell us what you are seeing at this juncture? Not sure about short-term, could hit as high as $138 before correction, or could begin to correct next week. news mess up everything. AAPL hitting $150-$170 before end of the year becomes a possibility... so my strategy is to long as many calls(LEAPS 2017 $120+) as possible, pull backs are all BTFD.
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Post by phoebear611 on Feb 22, 2015 6:12:46 GMT -8
I'm looking at the 2016 leaps but I also play short term calls - meaning 3 months or so out. So the "pullback" (downside number) keeps creeping up - is getting higher. Where do you fellas see potential downside if/when that comes at some point? Let's assume today's numbers.
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Post by incorrigible on Feb 22, 2015 7:18:00 GMT -8
I believe Mace said recently that correction would be to $115. Don't want to put numbers in another members mouth though. (That sounded ... wrong )
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Post by nagrani on Feb 22, 2015 8:23:29 GMT -8
Apple always sells off on major events. Look for some sideways nonsense till April and then buy during sell-off after apple keynote. One exception is that if there is hyper demand and prices are 7-10k for gold - folks will start upping estimates since the watch could create a big pop on revenue
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Post by grannysmith on Feb 22, 2015 10:36:57 GMT -8
I'm thinking ahead to the Apple watch launch and how it may play out. This post is a bit of slow Sunday idle speculation.
For years I've watched the local Apple stores here in NYC to get a feel for product demand. The lines for the iPhone 6 lasted for months and were dominated by ethnic Chinese buying iPhones for, presumably, resale in China. Will something similar happen for the gold watch?
The profit potential must have been considerable for long lines of people to buy iPhones at a two per person, per day limit, to smuggle back to China. Assuming Apple is targeting the gold watch at the Chinese one percent of the one percent, are we going to see lines around the block of speculators hoping to resale at a premium? I believe a lot of the sales to the iPhone speculators were cash. Would anyone risk standing in line on a New York street with twenty grand in their pocket? The gold edition is going to have to be sold by appointment only or it will be days of pandemonium and a media circus. I bet, at first, Apple releases the gold watch only in the Chinese Apple stores to help manage the black market, and perhaps stoke status and demand.
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chinacat
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Post by chinacat on Feb 22, 2015 12:25:58 GMT -8
For those of you who are pro- Car, M.G. Ziegler is sure that you are correct. What is interesting about his take, is that it is based as much on an economic argument as a technical one.
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Mav
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Post by Mav on Feb 22, 2015 12:51:38 GMT -8
The economic argument isn't that convincing. Apple's primary motivation with new products is not to make money. That's what Samsung gets you.
Also, you wouldn't have the kind of sustainability you've seen over all these years, because if UX and being the closest thing to a "beloved company" is secondary...well...look what happened to Samsung.
Is Apple driven to grow? Not exactly the same question, and doesn't NECESSARILY mean an endless drive to make more money. A desire to make a bigger difference in people's lives by addressing perceived shortcomings of the "big enough" target industry? Part hubris, part confidence, part, I dunno, "beneficent intent", with a solid profitability plan in place? Hmm.
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Deleted
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Post by Deleted on Feb 22, 2015 14:26:03 GMT -8
I think Apple sees the transportation industry as another analog industry that moves slow. There's plenty of innovation and opportunity for Apple in this industry. Here's a quick and dirty list:
1. Self-diagnose auto systems with alerts re: maintenance and scheduling. 2. Interact hands-free with voice commands, leveraging Siri to tap Car Play's potential (without the excruciating negotiations slowing current adoption). 3. Chimes customized notifications, reminders w/on-screen display (dash or windshield); Ability to text back via voice 4. Revamped ergonomics, removing all mechanical buttons in favor of touch screen and voice activation. 5. Alternative fuel options include, Hybrid, EV, Hydrogen if the latter's infrastructure can be built 6. Tesla is paving the way for direct-sell business model, albeit with fits and starts (some states are still black for Tesla) 7. Personalized "Siri" for higher level of engagement. 8. General auto improvements using new materials; lighter-weight; new auto designs; new cabin comforts; all around performance; better range; reliability. 9. Unrivaled safety benefits 10. Holy grail: Self-driving cars (10-15 years). Mercedes is 3-4 years ahead of everyone else --almost competent now but electronic nanny chides if your hands stay off the wheel too long.
All car manufacturers outsource components to suppliers and Apple would do the same. Really, it's not so different with how Apple currently operates.
Jony Ive is a car guy, along with many others at Apple (e.g. Eddy Cue is on the board at Ferrari).
Name another industry that is as ripe for disruption. I can't think of one, except for the internet providers.
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JDSoCal
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Post by JDSoCal on Feb 22, 2015 14:48:36 GMT -8
The economic argument isn't that convincing. Apple's primary motivation with new products is not to make money. That's what Samsung gets you. Hmm. You're starting to sound like Tim Cook, Mav. Yeah yeah, Apple wants to make amazing products to enrich lives, yada yada yada. But if they don't have huge margins and sell like hotcakes, they'll go the way of the Dodo bird and the Mac Cube. Gotta enrich millions of lives with 40% margins. False dichotomy is false. I want Apple to enrich my life and my brokerage account with phat blingy revs & EPS. And I'm not seeing it with a car. If course, I'm not seeing Tim's briefings on a car's numbers either. And as for Mercel's wishlist of cool things Siri is going to take over in a 4000lbs hunk of rolling steel and flammable batteries, I wonder, will the public be as forgiving of software glitches that lead to OMG RUNAWAY FIREY DEATH CAR SLAMS INTO SHORTBUS FULL OF SPECIAL NEEDS CHILDREN that they are of wifi connectivity bugs in iOS X.0's? Let's get Maps right before we do Jetsons, huh?
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Post by BillH on Feb 22, 2015 15:50:14 GMT -8
And as for Mercel's wishlist of cool things Siri is going to take over in a 4000lbs hunk of rolling steel and flammable batteries, I wonder, will the public be as forgiving of software glitches that lead to OMG RUNAWAY FIREY DEATH CAR SLAMS INTO SHORTBUS FULL OF SPECIAL NEEDS CHILDREN that they are of wifi connectivity bugs in iOS X.0's? Let's get Maps right before we do Jetsons, huh? I'm not particularly concerned about the ramifications of a self driven car causing an accident. I'm VERY concerned about what happens when they are found to be considerably safer. It's not hard to see the day coming when humans will no longer be allowed to drive. Still ordering the new Miata go-kart though.
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JDSoCal
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Post by JDSoCal on Feb 22, 2015 16:35:40 GMT -8
Blodget thinks the Car is a bad idea, so I'm going to need to take another look at my position on it.
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