Apple

[Grieve]

Holy blowout quarter, batman!

http://finance.yahoo.com/news/Apple-2Q-n...et=&ccode=

If this isn't the best run company in the world, notwithstanding the odd misplaced iPhone prototype, I don't know what is. $300 for sure this year now...

[Vanraw]

pffft.

Still a ponzy scheme

Seriously, They are doing well, and they should be getting another bump with he CDMA version for Verizon coming soon. The biggest mistake they have made is using ATT.

[Grieve]

And more to come...

Apple CEO Steve Jobs took the opportunity to tease new products in the company's earnings release. "We've launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year,"

[Diggles]

Holy blowout quarter, batman!

http://finance.yahoo.com/news/Apple-2Q-n...et=&ccode=

If this isn't the best run company in the world, notwithstanding the odd misplaced iPhone prototype, I don't know what is. $300 for sure this year now...

Give them 5-10 years and they'll be in the same spot they were when IBM crushed them. Google can make products as good that are open platform and half the price.

[Grieve]

Give them 5-10 years and they'll be in the same spot they were when IBM crushed them. Google can make products as good that are open platform and half the price.

"Can" make products as good is not the same as "actually" making products as good.

The genius of Apple is iTunes and the app store. I've bought a lot of apps for my iPhone. If I buy the next-gen iPhone, I get to continue using all those apps. If I switch to Android, I have to start again from scratch. That's another good reason why the "it's just a big iPod touch" argument about the iPad is missing the point. It's a big iPod touch, so it can run all your existing apps...

[Diggles]

iTunes is a good media player program, thats about it. I stopped buying songs from them since they are overpriced and protected, cant be used in many applications, well actually in ANY application but being put on an iPod. Sorry, many liberty loving people will not buy into closed systems.

Your argument that you've already picked your path isnt a very strong one. Apple just had to cave after denying a political comic app was denied. This is the kind if stupid bullshit that will kill off a closed system, when they are arbitrarily denying ideas. And the fact they dont allow porn apps will also kill them. Remember Porn was single handled responsible for VHS and internets success.

[Jakensama]

Meh, Apple Store will make money marketing to the great unwashed non techie masses, this is their main argument. The average person doesn't give a flying rats ass about DRM or closed systems because they don't care to go through the alternatives.

I would get an android over the iphone if I liked gay touchscreen devices because being open source I can do most of the cool stuff I want to without paying for it. But for your average schmuck Apples marketing of the istore/itunes is probably going to remain a big cash cow.

[Grieve]

This is a great chart. Why AAPL is cheap even while flirting with $300.

http://tech.fortune.cnn.com/2010/09/27/i...ahoo_quote

[Breand]

The big problem I have with Apple is that they havent paid out a dividend since 1995. So all of the value you put into owning the stock is based on how much higher it will go and never on the prospect of dividends or a stock buyback. In that respect I always look for stocks that have upside, and dividend returns...

[Vanraw]

So this graph maintains that Apple will double earnings per share in 5 years?

Perhaps it will, but I'm just not buying it. I'm probably wrong but just not buying it. What product will they have that will represent a doubling of their existing market?

But I was wrong about google too when I felt the same way back when it was $300.

[Grieve]

The big problem I have with Apple is that they havent paid out a dividend since 1995. So all of the value you put into owning the stock is based on how much higher it will go and never on the prospect of dividends or a stock buyback. In that respect I always look for stocks that have upside, and dividend returns...

Would you rather own, say, MSFT, with a 2.60% yeild, but absolutely flat stock performance over the last 5 years, or APPL, with zero yield, but with a stock that has risen 450% over the last 5 years? That's easy math for me.

[Grieve]

So this graph maintains that Apple will double earnings per share in 5 years?

Perhaps it will, but I'm just not buying it. I'm probably wrong but just not buying it. What product will they have that will represent a doubling of their existing market?

Apple has doubled EPS in the last year, let alone 5 years. EPS is up 600% over the last 5 years.

http://ycharts.com/companies/AAPL/eps#fo...eal&zoom=5

I think they could double EPS purely on the products they have now. The iPad wasn't even a factor in their last EPS, nor was the new AppleTV, or the new iPods. All these products are expanding into new markets all the time. A Verizon iPhone alone would result in a massive rise in the number of iPhones sold in the US. Demand is exceeding supply everywhere - just look at the China iPhone 4 numbers over the weekend, or the iPad in Japan.

I think this will be a $1000 stock in a few years.

[Vanraw]

You might be right, but its one Ill miss. I do agree that the VZ sale and the introduction of using CDMA will be a boom as well as China.

[Breand]

The big problem I have with Apple is that they havent paid out a dividend since 1995. So all of the value you put into owning the stock is based on how much higher it will go and never on the prospect of dividends or a stock buyback. In that respect I always look for stocks that have upside, and dividend returns...

Would you rather own, say, MSFT, with a 2.60% yeild, but absolutely flat stock performance over the last 5 years, or APPL, with zero yield, but with a stock that has risen 450% over the last 5 years? That's easy math for me.

Well, I wouldnt invest in MSFT either. I did own Apple at $85 the day before the iPhone announcement and sold at $120 That was actually my first solo stock purchase in my life.

[Grieve]

But I was wrong about google too when I felt the same way back when it was $300.

Which is where Apple is now. The first analyst to give a target of $500 has arrived:

http://finance.yahoo.com/news/Apple-Stoc...l?x=0&.v=1

Question is, will Apple pass Google in price per share (they are already well past them in market cap)? I suspect that is Steve Job's aim, which is why there has been no stock split recently (there have been several in the past). Who will hit $1000 per share first?

[Grieve]

Nice chart - Apple has 4% of the world cellphone market, and 50% of the profits. 4% tells me a long way to grow...

http://tech.fortune.cnn.com/2010/10/30/i...-of-profit

[Snowreap]

I can't help but think that the proper response in this case is to suggest higher taxes on Apple. there is no reason why, in our modern progressive world, such a large proportion of the profits should accrue to such a small proportion of the manufacturers.

it's un-american, I tell you.

-ken

[Vanraw]

FYI, I just got a droid 2 from work. First time Im off Blackberry in years. We are using a enterprise applicaion called Good Enterprise, that lets us do most of what the RIM BES does wityh out corprate mail.

Im very impressed witht he device so far. Definitly not a toy.... I could see devices like these removing the need for most people's PC's.

[Jakensama]

   

[Breand]

I drank the Kool Aid yesterday and finally bought some Apple. Read a pretty convincing article from a guy I trust about how undervalued it is. Saying it should be 500 by the year's end.

I still don't have the heart to buy a call option...almost pulled the trigger on a 425 call for October but couldnt go through with it! Just felt like at $338, long term it's virtually impossible for me to lose money on that but with a call there is.

[Grieve]

You couldn't have had much better timing, right before those barnstorming earnings. Plus they calmed investor nerves on the call about things like the Japan supply chain and strong iPhone sales despite android. Might dip tomorrow, but should hi new highs soon.

Right now trailing EPS is $20.98. Based on their guidance for the quarter (which they always ridiculously lowball), it will be $22.48 after next earnings. At a 20x multiple (also ridiculously low for a company growing this fast), that gives a stock price of $450. And that's before you even back out the $70 per share in cash...

[Grieve]

http://blogs.barrons.com/techtraderdaily...hoobarrons

[Breand]

now if they just lowered their prices on the computer side, they'd probably take over the PC market, too.

[Vllad]

Nice chart - Apple has 4% of the world cellphone market, and 50% of the profits. 4% tells me a long way to grow...

You actually have this backwards. It is actually the other way around. It is the other companies that have a long way to go not Apple. They won't gain much more then they are now because they already run very thin. Their market share is never going to be huge from a sales perspective unless they change internally.

I have been hesitant to discuss them in the past but the one thing I will say about Apple is they run as cheaply as possible. Their is no more fat to be trimmed so unless they gain market share they aren't going anywhere.

The other companies however run extremely fat. If their competitors ever smarten up and thin down companies like Apple will start to lose that market share in profitability. In other words Apples success is greatly attributed to the other companies failures. Not the other way around.

Don't get me wrong, Apple consciencely made these decisions which is very smart but their are only so many gains to be made on that end.

Vllad

[Grieve]

Vllad, I've heard many times that Apple are cheap, miserly even. Isn't that an attribute you want in a company you are investing in? They say rich people are the meanest - there is a reason they became rich, after all. Same applies to companies.

Now I understand what you are saying. For an established company with market saturation, increasing margins might be the only way to grow profits. But it doesn't make any sense to apply that to a company experiencing massive growth.

You are skeptical they can grow when they are already lean and mean. Um...they had 52% sales growth last year. In the quarter just reported they had 83% revenue growth and 95% profit growth. They guided to 46% rev growth next quarter, and they ALWAYS lowball. They just had 250% sales growth in China. They sold every iPad 2 they could make, and still have a backlog of several weeks. iPads, iPhones and macs are taking off in the corporate market in a huge way. So it's a little strange to me hearing you talk about problems with growth.

Nokia currently have a third of the world cellphone market, and are imploding. They just sold their soul to the devil (Microsoft). Research in Motion are also in dire straights. The Playbook just came out and was panned. Apple has plenty of opportunity to take share, and even without increasing share...these are rapidly growing markets.

Apple WILL hit $500, and it WILL hit $1000. Take it to the bank.