even after a 60% run in the past year apple is dirt cheap. p/e multiple of about 12 when you take out cash and use a eps of $9.00 a share, which might even be low. apple forward earnings will be moving up past $10 a share and the company is growing revenues and earnings at rates far above any other large blue-chip tech company. i went with my wife shopping yesterday and looking around, everyone was glued to their smartphones. this is the future of computing, not the desktop. and apple is right at the center of smartphones, tablets, automotive, home entertainment, healthcare, etc. as each part of the ecosystem thrives, it creates a larger barrier to competition and a structural cost and pricing power benefit to apple.
for the past 4-5 weeks we have been in a stock buyback blackout. i notice the last 2 big moves up were after earnings and coincided with the times when there was no blackout. so my guess is that apple spikes up on earnings, but only 3-4% and then once the 48 hours is up, the buyback kicks in and starts moving the stock up again on a very straight line. seems like this pattern will be repeating itself, so it might be a good idea to put the most money on the line for the next 3-4 weeks in apple.
interesting to look at the chart of king in relation to the buyback blackout periods. the blackout typically extends from 4-5 weeks ahead of earnings to 48 hours after. so in looking at king's stock price it looks like after the spike in earnings, the shorts took it down for 2 days and then the buyback took effect and absorbed any extra shares and stabliized the price at 16 a share. then the cash dividend took it down by an equivalent amount and then late march the stock started running up. but that steady advance slowed and peaked in mid-april, which would have been approximately when the stock buyback blackout started for this coming quarter. the stock continued the pattern up a little higher but now it is moving back down a little. i think with the limited float the stock buyback will continue to be the best time period for the stock. so my guess is that the stock moves sideways until a few days before earnings, turns up going into earnings. spikes on good earnings news, drops for 2 days as shorts try to regain control and then stabilizes and then starts another ascent as the buyback kicks back in. the big question is at what point the short sellers throw in the towel, and at what point do other big money players decide that the price of king is too low? the only positive i see for short sellers is that king could announce that it is pushing back game launch dates in order to improve the games. that is the only opportunity i see for downside pressure. that would push back the date the stock takes off until later in the year. king just needs 1 or 2 big game lauches here and the short case is doomed. but maybe they have a window if king pushes games back. paradise bay looks like a solid game, but not a homerun. it might need more time to polish???
is he from one of those hedge funds that once again are UNDER-PERFORMING the market? got to love those brilliant guys who keep getting it all wrong. it do think that apple will blow away estimates and post a nice gain, but if the hedge funds knew the future, they would beat the market.
for pushing the price back down. i need another week and a half to sell some apple after the next run-up. so any downward pressure between now and earnings would be great.
the company profit is down year over year and when apple introduces new ipads this year the sales of surface will plummet. each year apple gains strrength and market share as mobilility is the key. there comes a tipping point in the next 2 years where apple's office suite and google's (both free) will make it impossible for microsoft to charge $ for its office suite and the platform of windows is left in the dust. when a person owns a phone, car and home tv device and tablets with either ios or android, how long will microsoft be able to charge them for office software? anyone celebrating the future of microsoft is delusional. the core of microsoft is rotten, even as it extorts more revenues from a dwindling customer base. in 2 years from now microsoft becomes the next nokia/blackberry - a niche player.
microsoft is a business that is squeezing more cash out of fewer customers. microsoft has no real success in the mobile world and that is where the whole world is moving. just crazy that the stock price is up so much. apple is the future and yet the stock price just gets cheaper and cheaper relative to earnings. $9.50 in earnings for the full year less cash gives a p/e of about 10. for a company that will show revenue growth of 30+%. insane.
any business can give away products for free and grow. apple computer is truly growing and amazingly profitable and the stock just sits there, while amazon zooms up. this market is now getting detached from reality and that is the first sign of an impending disaster.
profits are DOWN year over year. the company can only grow by giving away all profits. the future of tech is apple and it trades at a massive discount to the market.
microsoft is finding ways to continue to milk customers, even as the world shifts to mobile platforms where microsoft has no foothold. profits are down 12% year over year, not up. apple is the future, and trades at a DISCOUNT to the market. insane.
but there are plenty of people who want to get into apple ahead of earnings.
there are 2 companies insanely undervalued who are riding the mobile revolution - apple and king digital. both these companies have p/e ratios way below the industry (king is under 10) and wall street is clueless. when you look at the relative valuations of amazon, twitter, facebook and compare to apple and king, you see that there is a fundamental misunderstanding of where real value lies.
which would you rather own? the company that creates the software and hardware that is quickly becoming the de facto standard of all middle and upper income consumers, or a social network that could easily be replaced by google or apple on future versions of their platforms?
the software platform is the place in control. my guess is that within 5 years apple has created its own search engine technology and replaced google on all ios devices and that it also creates a suite of new social interaction tools that will steal time away from facebook. brand loyalty at apple is immense, but with facebook the loyalty is to the poeple on the network, not the brand. the relative valuation given to facebook versus apple in terms of the p/e ratio is insane.
facebook, amazon, twitter are all highly overvalued. apple and king digital are the "value-growth" combos that are profiting from the mobile revolution. as usual, wall street is clueless.
i dont see any news, but there must be rumors of something. this company is so undervalued it is crazy. i watched a documentary on the fall of atari and it reminded me wall street still thinks that king's revenues could just plummet. they dont seem to be looking at the stability of the games at the top of the charts. the business model of king is very stable because it builds an annuity stream of revenues on games, unlike the old console gaming model of selling a disc. king will prove stability in revenues from current games in the next couple months, and then new games will fuel growth. this is quite possibly the cheapest stock i have ever seen relative to the industry/company growth potential.
the problem is those options. wall street hates paying money on options and apple is the stock beaten down by options trading. not sure what they can or should do about this, but it simply means that apple stock stays at a real discount to the value.
that tends to be bad news for the stock appreciation. probably why the stock is not moving up. it will take big earnings to really move apple up.
you can find a review on the game on gamezebo, just google paradise bay game and the link is a few down the page.
the review sounds very positive. looks like the game is a quality game, but probably a pretty familiar type of gameplay, so probably not the next big thing, but a solid title.