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Apple Inc. Message Board

  • arawfrejunk arawfrejunk Jan 26, 2013 1:40 AM Flag

    why aapl is trading like a value stock

    why aapl is trading like a value stock(8 PE)?
    Why market is writing-off their growth prospects and global market share in smart phones?
    Are they suppose to trade at higher multiple than msft due to their growth prospects and leader position in tablet space?
    why market is writing-off their next revolutionary product (smartTV) iTV which is suppose to release this year?
    SmartTv(itv) will be a sure winner like iphone. And margins will climb up above 40% again by year end.
    Stock price will reach all-time high again by year end.

    Sentiment: Strong Buy

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    • AAPL's $500 price was based on 50% to 100% growth.
      As a value stock, AAPL must raise the dividend or repurchase stock.
      The later implies repurchasing stock at a lower price.
      At some point the general market will correct.
      Why buy AAPL at $400 when FB is trading at $19 ?
      FB is the first stock people ask me about when looking for a growth stock.

      Sentiment: Strong Sell

    • Give us the PE of MSFT and I'll be happy.

      Sentiment: Strong Buy

    • when iphone came to the market in2006 it was break through innovation.

    • anyone who wants to bu a iphone 5 already bought one...and no need to keep replacing you cell phone every 3 years.. d o yo u see people replacing their home phone...home phone has changed and no new innovation in smart phones.

    • no growth and law of large numbers.....the GDP of the US is only 16 trillion.and maturing market for cell phones....or smart phones maturing. and only price declines.

    • Gross margins of 40 percent are too high for a hardware company. They are unsustainable and have to come down to the teens or lower. People payed more because they perceived them as better. I think we are past that now and that is why the stock is falling. So if margins go to 20% from the peak of 40% then what happens to earnings? They go in half. So the 13 per share they earned this quarter will go to less then 7. So if they earn 28 a share for the year and you put a 10 multiple on it then you get a 280 stock. That is what the sellers are frightened about. Personally, I wouldn't pay more than 300 for apple stock. Anything from 300 to 700 is just hype.

      • 3 Replies to bjaythebear
      • Yes, their margins are declining but it's not headed to the teens or lower. And, Apple is not simply a hardware company - it's hybrid hardware and software. iTunes generated $3.5B revenue last quarter, so its no slouch. And money spent in iTunes is going to help Apple retain customers who will time and time again buy their products at a premium.

        However, their products are becoming commoditized so new users might seek other brands that are going to offer similar products at lower prices. It's getting harder for Apple to generate spectacular earnings despite good sales numbers; it's growth is on the decline - that's why the (panic) selling, justified or not.

      • I do not buy the argument of margins going down to 20%.
        Here is my reasoning.
        90% iPhone customers are high-end (pay at least $200 for upgrade in US). And ever 2 years these high-end customers keep upgrading to new iPhone because apple keep innovation going.
        Once you bought iphone; you never go back to any other phone. Apple eco-system will lock you. And ever 2 years these high-end customers keep upgrading to new iPhone.
        smartphone market is not like pc market. high-end customers keep upgrading their handsets. With cloud storage and new technologies, these upgrades are hassle free too.

        Sentiment: Strong Buy

      • Margins slip but should be counteracted with increased sales volume...fear of declining margins hasn't pushed price down, it is the fear that there is no innovation and that they will hold on to their rapidly swelling cash pile until end of life on earth. Margins could in fact increase if they bring manufacturing in house and take into account complexity of manufacturing/assembly when designing product so can automate.

    • How do you do math? 8 times 44 = 352 right?

      • 2 Replies to tkell31
      • If they get the deal with China Mobile, watch out shorts.

      • I heard the same nonsense on NFLX #$%$ Ask the shorts how fast it can pop to normal value. Take your profits soon; ICHAN or some other activist will soon get invloved. Not to mention the market is going to be going into a P/E expansion. P/E of 9 is not a growth P/E. Long term this is one hell of a cheap stock. Current plan is to drive retail out of this stock. Plain and Simple. And your missing the point...ITUNES is a cash does that income fit into your broken model. Now lets talk technicals 50, 100, & 200 are what? At least medium term AAPL is on sale. Personally I like to see AAPL come out with a $10 dividend....shorts would scramble on that news.

    • it has declining margins with uncertain growth
      the company had poor guidance
      they are hardware company
      their p/e should be like DELL

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