4aapl
Moderator
Posts: 3,635
|
Post by 4aapl on May 7, 2015 12:01:44 GMT -8
Of course that assumes the market would have kept valuing the company at 5x cash... IMO valuation was always based on other things, and I don't feel that Apple's cash was valued very much, and still isn't. It's primary purpose was to be able to keep on kicking, even in a downturn (think to 2001-2004) or with a failed product. After that, it's enough to buy mid sized companies. Once past there, you have the ability to do ongoing dividends and buybacks, but at some point when you say you're not going to buy out large companies, there just isn't much value to it. To me, the best way for Apple to get that cash valued is to do buybacks, which then changes the P/E and EPS directly. But that's just my take. It probably helped in backstopping the stock a little in it's huge fall, though it sure didn't feel like it at the time. But from what I've read, growing a cash balance let SJ not have to worry about the near runout in 1997. While I was at Apple there were still several "no new hiring" times in 2001-2005, and other cuts or trimming like dramatically changing the beer bashes that happened on campus 1-2 times per month. But they had the cash to also say they wouldn't have huge layoffs, which was good for keeping talent, keeping moral, and developing new things. But at close to 200B now....well, IMO additional cash just has not been valued for a while, maybe since $80B or $100B.
|
|
|
Post by artman1033 on May 7, 2015 12:04:52 GMT -8
|
|
|
Post by rickag on May 7, 2015 12:30:20 GMT -8
Apple? Someone had to write these puts right? Could be a quick way for Apple to retire 10,038,000 shares or collect the premium - win win. Naw, I don't think Apple plays with options. I don't think Apple plays directly with options (and it may even not be permitted in many cases), but Apple *does* periodically contract with third parties using forward contracts to acquire its own shares for buyback. It is entirely possible that Apple contracted with an investment house for them to deliver 1 million shares (10,000 options covers 1 million shares, not 10 million shares) to Apple on a specific date in the future. It's also possible that this investment house is using various strategies to hedge that position. No way to know for sure. Opps, missed by a decimal point. I do wish Apple did use options, who better to place a floor on the stock. But I doubt they do.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 12:35:19 GMT -8
I'm not so sure about that. For example, would Apple be able to borrow $40+B at such good terms, in various locations around the world, if it weren't a public company with publicly available and audited financials, and a very wide following of its performance? Probably not. Capitalization is more than the IPO and follow-on equity offerings. Generally correct, but you're conveniently overlooking the reason why they're borrowing here: to repurchase shares without repatriating foreign earned income and triggering a domestic tax bill. I think there's another reason they are borrowing here ... because the terms they can get now are fantastic. Think about it, those bonds that they are selling now at 1.5%, if rates shoot up to 5.5% in a few years, they can buy those bonds back at perhaps 75 cents on the dollar! Imagine how delightful that would be, they (we) would profit coming and going - first they profit by buying back shares now (and eliminating dividend payments that subsidize the interest due on the loans), then later, using free cash flow, they buy back [some of] the bonds at 75 cents on the dollar. Truly an awesome scenario.
|
|
JDSoCal
Member
Aspiring oligarch
Posts: 4,183
|
Post by JDSoCal on May 7, 2015 12:39:08 GMT -8
There's a reason companies go public: more capital by at least an order of magnitude than exists in private equity. Cheers to the longs. That's an argument for initial capitalization -- we're way past that milestone. It's actually a fact, not an argument, that there are magnitudes more capital in the public markets than in individual private equity funds. Remember that public capital works in concert (we all contribute to a company's market cap), whereas venture capital funds are competitors. So they can't pool their resources to compete. Sure, they can work with investment banks to raise some funds, but nothing of this magnitude. This is why IPOs make guys billionaires. There is simply no way for private equity to come up with the $1T plus that an LBO of Apple would require. The only reason Dell could pull of an LBO is that they offered ~1/4 of its ATH price, and shareholders figured that was a good deal. And that LBO was likely a 40th of what an Apple LBO would likely cost, because the average Apple stockholder thinks AAPL is under-priced (I'll vote "yes" for $200/share). The largest hedge fund has about $77B under management. Even BRK-A has a market cap about a third of a trillion. And Warren sure as hell can't use all of BRK's equity to buy a single company anyway. Even the top sovereign wealth fund (Norway) has less than $900 B in it.
|
|
|
Post by dmiller on May 7, 2015 12:43:22 GMT -8
Quick initial impressions of Apple Watch after 1 day of use:
- Really really REALLY like it.
- Grows on you, the more you use it.
- Didn't take much time to reacquaint self with the feel of having something on the empty wrist again. What felt a little strange, at first, has "disappeared". (42mm stainless)
- 42mm was the right size, even though I have a small wrist. I wouldn't want it smaller.
- Sports band is excellent. Thoroughly enjoy the feel, it's soft and silky. Black sport looks dressy enough.
- The novelty of taking and making calls with it wasn't expected. I still like doing this. Can just be sitting and working and it feels natural, with arms/wrists on a desk near a keyboard.
- Re: yesterday's NY Times piece by someone who put together some colorfully worded paragraphs, talking about how after a week she still couldn't understand the difference between tapping and force-touch, and using Glances, etc... what total nonsense. If you spend an hour playing with this it's easy to understand the basics; a little longer and you've got a much better understanding of which features are accessible through certain Glances, how to configure things through the iPhone app...
- Usage patterns so far: quick glance at the time, then swipe through the first few Glances (easily configurable). First glance is AAPL stock price. Heart Rate comes several Glances later. Would be better if things improved again so that I'd move Heart Rate to immediately follow AAPL price.
- Not sure which face(s) I like best yet. They're all interesting in their own ways.
- Red dot at the top of the watch face as an indicator for unseen notifications is nice.
- Quick cover with hand to hide the face is a natural gesture.
- I tend to prefer swiping the face to the digital crown, although the latter is also fine.
- I like the idea that it won't scratch. The "ionized" glass in the Sport that's supposedly the same as in the iPhone 6 wouldn't cut it. (I find the "6" picks up many more minor and micro scratches than any iPhone I've previously owned, and it's only been in my pocket). Current Gorilla scratch-ability is a disappointment. Sapphire (even with lower light transmission) is better.
- Touching the watch to show the time is a better way of controlling visibility vs. flicking the wrist, although the latter works reasonably well. When showing to someone else, you can always touch and bring it back if it disappears too quickly.
- The charger doesn't clamp on as firmly as you'd think, from watching the videos; it's a fairly loose-feeling connection.
|
|
JDSoCal
Member
Aspiring oligarch
Posts: 4,183
|
Post by JDSoCal on May 7, 2015 12:54:51 GMT -8
Oh, the almighty market that is now price-efficient and knew all about the $50B? I was hoping for $30B -- it surprised me that it was $50B. Too bad Apple didn't give us a better earnings report -- Mr. Market wouldn't have been disappointed in it, selling AAPL off since then. Ok, there's no way to win. Everything is rigged. Sell everything and stash all your cash under the mattress. I really don't understand the daily incessant whining. Take advantage of the inefficiency of the market. Yes, Apple is significantly undervalued and has been for years. Yet I've still made a ton of money from it, along with many others on this board. If you can't figure out how by now then maybe it's not for you. Is it really something to get so upset over on a daily basis? I admit I've been frustrated the last couple of days but I can't imaging feeling like that constantly. Follow Apple instead of an AAPL - it'll lower your blood pressure. Sorry, but making money in the past, yet complaining about under-performance today, is not dissonant, so I really wish people would stop making that argument that long-term AAPL holders are ingrates or something. As we well know, past performance is no guarantee of future performance, and is certainly not a reason to justify holding a stock. I don't invest my money for nostalgic purposes or to show gratitude for past results. If anything, the FUD bears use past performance as an argument that AAPL has gone to far too fast, overbought, OMG market cap, blah blah blah. I am thankful to Steve Jobs and the Baby Jesus for my portfolio's growth these last 20 years. But I'd still like to make some money before I cash out of the casino, and yet, I do not have a 50-year time horizon like some on this board apparently do. The simple fact is, in today's markets, there is currently no correlation between a company's fundamentals and the P/E it trades at. That should be very disconcerting to investors who pride themselves in due diligence, and in knowing a company better than those paid to do so know it. And there is no guarantee that the market will not remain irrational beyond our investment time window. Hell, the whole damn world economy could tank and cut our shares in half. Or did you forget AAPL trading at a split-adjusted $12 a mere 6 years ago? If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 13:17:02 GMT -8
If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV. And where would you put that money? Curious.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on May 7, 2015 13:23:22 GMT -8
Generally correct, but you're conveniently overlooking the reason why they're borrowing here: to repurchase shares without repatriating foreign earned income and triggering a domestic tax bill. I think there's another reason they are borrowing here ... because the terms they can get now are fantastic. Think about it, those bonds that they are selling now at 1.5%, if rates shoot up to 5.5% in a few years, they can buy those bonds back at perhaps 75 cents on the dollar! Imagine how delightful that would be, they (we) would profit coming and going - first they profit by buying back shares now (and eliminating dividend payments that subsidize the interest due on the loans), then later, using free cash flow, they buy back [some of] the bonds at 75 cents on the dollar. Truly an awesome scenario. I'm a BIG fan of Apple borrowing here, no question. And maybe, just maybe, instead of the P/E compressing, the higher EPS produces a higher PPS.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 13:31:07 GMT -8
4 different uses of the stock widget on DASHBOARD: Just like the stock app in iOS, though I don't know if clicking on the stock would open up a quote page on Yahoo. I used this constantly to check pricing and news on AAPL and others (oil industry) this ski season. Hmmm, 5 days later, and AAPL is back right where it closed last Thursday. It was $125.3, I think. Interesting. That's got to squish volatility a bit. And I bet some big players managed to find a way to make some nice money off of it. I'm still trying to wrap my head around someone making money off of that May 22 130 position of ~60k Calls and Puts for a synthetic stock. Just like the May 1st one that was at 125. There's something there, though it might just be a way to get a general move while knocking out some of the premium, along with a willingness to buy a large chunk at these levels. Hmmmm, it would take $780 million to buy those shares. Interesting. Interesting. If we assume that the same person purchased both positions, and let's say it cost 0.75 for the call and 5.50 for the put for a total of 6.25. That means that this person will begin making money below 123.75 or above 136.25. Since there are no "events" between now and expiry, that doesn't seem to me to be a very good bet (despite the recent volatility, and considering that the stock has already declined about 7% from its high). Now let's think about the person who SOLD this position to the former person, assuming it was one person who sold both options. Now that trade will profit between 123.75 and 136.25, with maximum profit at 130. Considering that the stock meandered around 130 for awhile recently, that's a better bet, but only slightly better. Is it possible that each of these positions are separate somehow and are part of a combo vertical and calendar spread? Maybe a May-22/Jun-19 130/135 spread?
|
|
coma
Member
Posts: 522
|
Post by coma on May 7, 2015 13:36:01 GMT -8
If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV. And where would you put that money? Curious. Personally, I have been divesting into real estate since 2006 and currently have a total of 7 properties . . .
|
|
JDSoCal
Member
Aspiring oligarch
Posts: 4,183
|
Post by JDSoCal on May 7, 2015 13:40:32 GMT -8
If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV. And where would you put that money? Curious. Dream home, gold, & cash. Oh yeah, hookers & crack.
|
|
|
Post by mace on May 7, 2015 13:44:08 GMT -8
Personally, I have been divesting into real estate since 2006 and currently have a total of 7 properties . . . Stop competing with me. Being buying in RR area, so stay clear. Bought three already.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 13:53:24 GMT -8
And where would you put that money? Curious. Personally, I have been divesting into real estate since 2006 and currently have a total of 7 properties . . . I have an uncle that did that. He has something like 20 properties so far. The problem with it is that it's essentially a second job, but he's already retired so it keeps him busy. I once heard someone describe owning rental property as "a lightly taxed second job"
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 13:54:30 GMT -8
And where would you put that money? Curious. Dream home, gold, & cash. Oh yeah, hookers & crack. None of those generate income
|
|
|
Post by artman1033 on May 7, 2015 14:34:41 GMT -8
And where would you put that money? Curious. Dream home, gold, & cash. Oh yeah, hookers & crack. how about a roomful of BOOZE?
|
|
|
Post by rickag on May 7, 2015 14:42:24 GMT -8
And where would you put that money? Curious. Dream home, gold, & cash. Oh yeah, hookers & crack. Me personally, tax free municipal bonds for enough to live on and grow somewhat, the rest in a very diversified portfolio of dividend stocks. If I could, 100% tax free bonds just so I could flip off the IRS. My wife would frown on hookers and crack
|
|
|
Post by jmolloy on May 7, 2015 14:45:40 GMT -8
Me personally, tax free municipal bonds for enough to live on and grow somewhat, the rest in a very diversified portfolio of dividend stocks. If I could, 100% tax free bonds just so I could flip off the IRS. My wife would frown on hookers and crack Living up to your avatar... Going to put any of it into advanced chess classes? Just curious.
|
|
chinacat
Moderator
AAPL Long since 2006
Posts: 4,429
|
Post by chinacat on May 7, 2015 14:53:02 GMT -8
Fabulous Wife got me Becoming Steve Jobs for a birthday present, and I found it amazing and wonderful that this entry about the Apple 1 is still not only relevant, but, as Tim keeps repeating, at the core of their newest product:
Woz didn't appreciate it, but he had created the first personal computer. Steve however, understood the magnitude of the achievement, and the power of the term personal computer in the context of an industry that had been anything but personal. So that was exactly the term he used whenever people asked him what it was that Woz had dreamed up.
|
|
|
Post by nwjade on May 7, 2015 14:55:54 GMT -8
oops double post
|
|
|
Post by nwjade on May 7, 2015 15:06:17 GMT -8
Here's a fun look back rant that some of you probably were around to remember. TOMMO_UK Posted: Fri Jun 08, 2007 12:57 pm — Oh I love it.. one analyst says its a $10B business by 2009. Then another says NO its a $15B business by 2009! Knock yourselves out boys, all I know is that it means AAPL's going to be a $350 stock by 2009. Buy this bloated pig right now In the meantime, AAPL is pulling back again at 122.90. Seems as though people can't quite bring themselves to get their tiny bird brains around what the iPhone truly means - a doubling of revenues very, very soon. AAPL: insanely cheap at $123, because insanely high earnings upgrades are just around the corner. I know aapl won't grow 7X over the next 8 years but we aren't done growing either.
|
|
|
Post by Red Shirted Ensign on May 7, 2015 15:30:57 GMT -8
Dream home, gold, & cash. Oh yeah, hookers & crack. None of those generate income But they will consume it...quickly!
|
|
4aapl
Moderator
Posts: 3,635
|
Post by 4aapl on May 7, 2015 16:48:28 GMT -8
and yet, I do not have a 50-year time horizon like some on this board apparently do. The simple fact is, in today's markets, there is currently no correlation between a company's fundamentals and the P/E it trades at. That should be very disconcerting to investors who pride themselves in due diligence, and in knowing a company better than those paid to do so know it. And there is no guarantee that the market will not remain irrational beyond our investment time window. Hell, the whole damn world economy could tank and cut our shares in half. Or did you forget AAPL trading at a split-adjusted $12 a mere 6 years ago? If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV. "The market can stay irrational longer than you can stay solvent" I've been hit by that, in fact sadly it's happened several times. 85-90% losses. It's not pretty, and I hope to never be there again, and thus am not anywhere as risky as I've been in the past. Sure, it would be nice to add a few significant figures on, but frankly it's not worth the risk it would take. I'd rather stay solvent, and have the option of a 2nd career if I really wanted to go big or go home. But AAPL and irrationality. That's been nearly a constant thing over the past 20 years. Really only in retrospect at the peaks was it around where I'd consider standard metrics to be pricing it right, or even overpricing it just a little. Amzn has been overpriced IMO forever. Google is closer, but still normally has an extra 10 points on it's P/E, which adds up a bit. No "one trick pony" or "decreasing margins" comes up there, at least no where near at the level Apple has consistently seen. And then there was the whole "what if SJ was hit by a bus" thing, factoring in a passing a decade before he did and long before any symptoms, with the idol status (he did push the company, was able to focus on what mattered, and gave great keynotes) making people feel the company couldn't exist without him. But IMO somewhere here in the mix is the Mac vs PC thing. There's really only 2 choices, and it's been a huge polarization point for decades. Apple has had the underdog status, but there's not a huge group of undecideds that are rooting for them, only those that have already seen the light. That makes it a bit different. Things have changed with the iPhone, getting a large marketshare and introducing them a bit. But IMO the polarized against Apple are a hard group to sway, and because of that there are always going to be people against it, including analysts and investors. It might not hold them back completely, but it might make them lower their expectations and outlook a bit. Either way, AAPL seems to be nearly always undervalued compared to it's peers, and I don't see that as being any different now. On the positive side, as more and more compression has occurred, there's less left to squeeze. And so increased earnings will have a more direct correlation with stock movement. Of course that assumes a floor somewhere, like a P/E of 10 that XOM used to stay below. But apparently that's a moving target too. Good luck. But I don't see any reason to think that "this time is different". (and yes, if AAPL hit $200 tomorrow, I'd be happy to take it, mainly because I wouldn't expect it to last due to some of the above points)
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on May 7, 2015 17:01:03 GMT -8
Over the past 5 years, AAPL's P/E has fluctuated between 10 (July '13) and 23 (June '10). The average of that is 16.5, which is what AAPL had in Oct. '14. If we can see that P/E when Apple reports the September quarter, price per share approaches $150, unless Apple buys Amazon, in which case we'll see $2,000 per share, or something above that.
|
|
|
Post by Nevyn on May 7, 2015 17:17:26 GMT -8
And where would you put that money? Curious. Dream home, gold, & cash. Oh yeah, hookers & crack. If you have money it's hookers and blow.
|
|
|
Post by mace on May 7, 2015 17:29:43 GMT -8
The truly rich has trophy wives.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 18:57:48 GMT -8
and yet, I do not have a 50-year time horizon like some on this board apparently do. The simple fact is, in today's markets, there is currently no correlation between a company's fundamentals and the P/E it trades at. That should be very disconcerting to investors who pride themselves in due diligence, and in knowing a company better than those paid to do so know it. And there is no guarantee that the market will not remain irrational beyond our investment time window. Hell, the whole damn world economy could tank and cut our shares in half. Or did you forget AAPL trading at a split-adjusted $12 a mere 6 years ago? If AAPL went to $200, I'd RUN to the cashier window and be out of the market forever. YMMV. "The market can stay irrational longer than you can stay solvent" One of the reasons I like options, and especially spreads, is because they "self liquidate"; In other words, they have termination dates at which point you have to unwind the position, no choice in the matter. Owning regular common shares doesn't have that feature. I especially like what I've been dabbling in lately, the selling of puts, those almost always truly self-liquidate - sell them and wait for them to expire, that's it. What I've been trying to do with Apple is to buy whenever there is a significant dip, and to buy a lot whenever there is a deep and bloody dip. I buy shares, LEAPs, and spreads of various durations. So far it's worked pretty well other than near the end of 2012 when we all got slaughtered. But despite getting slaughtered, I used that opportunity to rebuild the portfolio at those very low valuations and that is paying off rather nicely now. It's true that Apple appears to be undervalued compared to its peers most of the time, but that can be used to our benefit - when it is ridiculously undervalued you load up, and then when it gets to a reasonable valuation you can lighten up. Rinse and repeat. The other advantages of being undervalued are: 1) When the market has a "large" negative event, it will tend to go down less than its overvalued peers go down. 2) When irrational exuberance becomes widespread, it has further to go up (longer sloped runway) than its peers. 3) If you're still in the accumulation stage, you are buying at better valuations. You have a level of safety. 4) When the company buys back shares, it is economically a better deal. Heck, much of the interest on the debt is covered by the reduced dividend distributed.
|
|
mark
fire starter
Posts: 1,552
|
Post by mark on May 7, 2015 19:13:05 GMT -8
Amzn has been overpriced IMO forever. Google is closer, but still normally has an extra 10 points on it's P/E, which adds up a bit. No "one trick pony" or "decreasing margins" comes up there, at least no where near at the level Apple has consistently seen. Ha! Google may even be more of a one trick pony than Apple is. I wonder if the percentage of revenue from Advertising at Google is higher than the percentage of revenue from iPhone is at Apple? And Amazon? Even if their revenue grows tenfold (to about $1T, twice as big as Walmart) AND their profitability grows tenfold, they still won't be reasonably valued
|
|
|
Post by BillH on May 7, 2015 22:00:01 GMT -8
Here's a fun look back rant that some of you probably were around to remember. TOMMO_UK Posted: Fri Jun 08, 2007 12:57 pm — Oh I love it.. one analyst says its a $10B business by 2009. Then another says NO its a $15B business by 2009! Knock yourselves out boys, all I know is that it means AAPL's going to be a $350 stock by 2009. Buy this bloated pig right now In the meantime, AAPL is pulling back again at 122.90. Seems as though people can't quite bring themselves to get their tiny bird brains around what the iPhone truly means - a doubling of revenues very, very soon. AAPL: insanely cheap at $123, because insanely high earnings upgrades are just around the corner. I know aapl won't grow 7X over the next 8 years but we aren't done growing either. He left for the silver biz. Wonder how that worked out comparatively. Sometimes when JD goes nuclear I get flashbacks.
|
|
|
Post by BillH on May 7, 2015 22:02:38 GMT -8
The truly rich has trophy wives. Some trophy. Hey Nineteen No we got nothing in common No we can't talk at all Please take me along When you slide on down
|
|