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Apple Inc. Message Board

  • bag_and_hold_investing bag_and_hold_investing Jan 10, 2014 10:39 PM Flag

    The Fundamental Reality of AAPL and The Market

    Has anyone stopped to consider that perhaps it isn't that AAPL is so undervalued, but that the entire stock market is grossly overvalued? The market has been behaving erratically to the upside fo the last six months. Along the way, AAPL has struggled to find its footing, but it has. If the market were to correct badly (20-30%), AAPL would take a hit, no doubt, but with the dividend, buybacks, and steady growth it should be able to find support somewhere in the $450 range, certainly over $400. What do you think would happen to TSLA, FB, GOOG, AMZN, NFLX, etc?

    All will be decided in a couple of weeks. It seems unimaginable that AAPL will miss earnings, based on all of the evidence available. Sales of iPads, iPhones, and even Macs are excellent. iTunes and the app store are reporting record growth. CM deal is a win. The lines at the AAPL store in Beijing yesterday show the kind of demand for AAPL that is present in China. Add to this the buyback, and AAPL should at least make its EPS numbers. People keep forgetting AAPL annually makes $3 billion more than Exxon in profit ($37 billion vs. $34 billion) and more than 3X what GOOG does ($37 billion vs. $11 billion). There is nothing right now to say that trend has changed dramatically.

    Yes, it's frustrating and nerve wracking to watch AAPL get hammered like this before earnings. But I encourage you to check out GOOG's stock price movement before its Q4 announcement last year. It was equally erratic, shaving off 5% before earnings. Right now, AAPL is only giving back a small portion of all it has gained in more than 6 months of trading. RSI signals extremely oversold. The mood hasn't been this bad since the spring lows. It might lose a bit more but we're dealing with moves of less than 1-2%. There might not be a better time to buy before earnings than right now.

    Again, it seems unfathomable that AAPL misses badly, considering all the variables cited above. We'll all find out on 1/27.

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    • Nice post..... AAPL has corrected about 8% since its Dec high, its been a pretty orderly trade straight down..... Very ugly intraday trading in the stock, where a long trader has little chance to buy the stock and sell it at any point during the day higher....

      Nice comparison to GOOG last year.... Why do people love GOOG so much? Has nothing to do with anything GOOG is doing, they love it because the stock has went up and money chases performance.....

      A few of the most frustrating things regarding aapl stock right now, 1) you can't trade it intraday long and this keeps money away 2) the stock underperforms down markets days and up market days, this too keeps money away. Really disappointing how it trades during the down mkt days....

      I expect a beat and raise during earnings.... Trading shorts will find something, margins, not enough said regarding new product, but they will get no traction if AAPL beats and raises.....

      And if they beat and raise, the board will easily beat the Icahn proposal on the proxy, a big reason I think they are going to beat and raise...

      • 1 Reply to liveup40
      • I do agree with you that there has to be positive intraday action to lure the momentum chasers. They used to adore AAPL on the way up. On the way up, it was that AAPL was a never-ending innovative powerhouse, and now it's that AAPL is doomed to obsolescence. It's all about an investing thesis built to profit from. Once they are constructed and can be profited from, Wall Street, the analysts, and the hedge fund crowd refuse to change it until they are proven absolutely wrong. It usually starts with one or two activist investors, and a rock solid technical picture of a bottom. AAPL has both of these now. The gods of technical analysis could not have designed a clearer double bottom than the one AAPL experienced in the spring.

        As for GOOG? Well, they have it easy. Wall Street is currently in love with online and mobile advertising, and GOOG has that market cornered. What I don't understand is why no one just copies what they do. How hard can it be to put a company logo over a search box on a white screen? Same for youtube. Why doesn't someone create an alternative sight to upload videos? I would love to see AAPL encroach on GOOG's territory as GOOG has done to it. Maps was a miserable first step in that direction. Glad to see iTunes Radio is off to a better start.

        Anyway, all will be decided in just about 2 weeks. If AAPL hits and hits big, the MB will have been reclaimed for the sane of mind. If AAPL misses or if the stock sells off, this will the MB will become a one-stop shop for lunatics and their anti-Semitic rants from here to eternity.

    • I predict very close or at 15/share due to the above factors... Apple had an incredibly strong 5S and iPad Air/Mini launch. The 5C wasn't great, but the 5S more than offset it. Add to that the 50 million retired shares (5% dec in float) and apple easily has it's best EPS in history. Guidance will be great due to CM rolling in just in time for Q2. This is a fantastic setup. Only headwind is the margin number, but I'm guessing it is flat and maybe higher due to the S model release. Margins may go down a little later in the year with iPhone 6, iPad Pro release (maybe watch/TV?), but overall margins look stable and growth is finally back. The move from 570 to 530 looks like a technical one like you said above.. Great buying point here...

    • Agree with you, on January 27 many investors will do so

    • It doesn't matter if Apple will miss or not...but the whole point now is:
      if earnings are OFF by only "a fraction" of the "earnings surprise" everyone is expecting by now ...This stock will take a hit!
      To me, there are 2 possibilities that explain this predicament:
      1) Already someone knows something, and has been bailing out since days ago.
      2) The market has realized that the management is a clueless bunch of i...
      And Tim Cook is the new "Steven Ballmer" of the block that don't have the faintest idea how to make Apple innovative again

      • 2 Replies to misterx.herrx
      • Everyone knows they will beat EPS this quarter. this earnings stock movement will be about margins and q2 forecast including CM. If both are higher than expected apple will be up 8 to 10%. if they are in line it will be flat. if they are down, apple will fall some. Upside seems to far outweigh the downside at these prices.

      • or 3) None of the above. It is simple manipulation, period. No one knows what Apple is doing and all they are trying is to force Apple to reveal , which they won't. Apple has positive news , it goes down, negative news, it goes down. So add 2 and 2 and you still get zero, something wrong here and it is'nt Cook or Apple

104.34+1.39(+1.35%)Jul 28 4:00 PMEDT