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Apple Inc. Message Board

  • alphashort alphashort Jul 9, 2013 10:08 AM Flag

    Coiled Spring: The More Market P/E Expands Without AAPL the More Ferocious The Inevitable Snapback Will Be

    Apple is only selling at a deep discount to its peers and the market for a couple of reasons.

    1.) They have had a few tough quarters on a comp basis, largely because they have blowout revs and margins (unsustainable margins) in the previous quarters. We will be through those quarters after the upcoming earnings in a week or so. The next three quarters will be set-up for blowouts again. Particularly if the product refreshes are received well and there is a potential new product category like a watch. Once the market realizes that AAPL can still grow earnings at a 20% clip the market will quickly move Apple into the 12-16 p/e range again. This means that AAPL could easily be trading at $800.00 by the end of 2014 just based on current earnings and p/e expansion to 16. However, by this time next year AAPL's earning could easily be 20% higher on an annual basis than they are today, which means that AAPL would be trading at $880.00 at a 16 p/e. Google is at a 26 p/e and they only grow earnings in the 20-30% range. MSFT and DELL trade at a premium to AAPL and they are dead companies as far as growth is concerned.

    2.) Idiot sell-side analysts that don't understand the AAPL phenomenon and have the entire market hoodwinked with their idiocy. The "truth" is that AAPL continues to pick-up market share in the states to its highest level ever recorded in June at over 50% market share. AAPL is killing it in Asia (especially India). The lion's share of all global profits in smart phones (72%) and tablets (91%) are made by AAPL. Customers are much more satisfied with AAPL products over android products. AAPL satisfaction, loyalty and retention rates are sky high at 85%. More that have of all Samsung customers say they are strongly considering another phone at renewal. Very few consumers intend to buy a BBRY, HTC, NOK/MSFT phone. The vast majority of mobile search and mobile e-commerce are done on AAPL devices.

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