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Nairaland Forum / Nairaland / General / Investment / Apple Stock Up 64% Since October (1366 Views)
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Apple Stock Up 64% Since October by ektbear: 2:01am On Apr 04, 2012 |
Needless to say, this bear is quite happy |
Re: Apple Stock Up 64% Since October by courage89(m): 2:05am On Apr 04, 2012 |
What is driving the stock price? Fundamental or speculation? |
Re: Apple Stock Up 64% Since October by ektbear: 2:08am On Apr 04, 2012 |
The fundamentals are great. Rapidly rising sales, high profit margins, rapidly rising profitability. Low P/E. Basically, iPhones, iPads, and to a much lesser extent iPods and Macbooks. |
Re: Apple Stock Up 64% Since October by bittyend(m): 2:12am On Apr 04, 2012 |
courage89: What is driving the stock price? Fundamental or speculation? Good question! - it has to do with the hype about Apple product, they will soon join their brother Nokia where they really belong. I'm not a fan of apple, their products are too expensive for the value of what they provide. And being a computer guy, Apple products are one of the least desirable if you're in the IT field, except you're a web designer. Stock market died long time ago, bonds and real estate in Nigeria are what's popping right now. |
Re: Apple Stock Up 64% Since October by ektbear: 2:19am On Apr 04, 2012 |
heh. I doubt I will ever invest in the Nigerian stock market again. Got burned very badly last time...between the rapidly depreciating currency and the lack of transparency, I don't think it a good place to put money. Nigerian real estate is good though. But I think my first preference going forward will be the US (and European possibly) stock market. |
Re: Apple Stock Up 64% Since October by PointB: 2:26am On Apr 04, 2012 |
ekt_bear: heh. I blame the bolded on Sanusi Lamido, who singled handedly destroyed the stock market with unguarded statement. The clown of a CBN Governor actually termed trading in stock - gambling! |
Re: Apple Stock Up 64% Since October by bittyend(m): 2:32am On Apr 04, 2012 |
PointB: Why blame Sanusi when Soludo was the one who created the fake bubble, and turned a blind eye at the malpractices happening under him? I don't really like the Sanusi guy - but Soludo and Ndidi Onyuike Okereke destroyed the Nigerian stock market. I thank God I never invested in that bubble. Investing in Nigerian stock market amounts to investing in real estate in Europe or America. |
Re: Apple Stock Up 64% Since October by PointB: 2:38am On Apr 04, 2012 |
bitty[b: How exactly did Soludo create the bubble? And what correlation does it have with Sanusi calling Capital Market stock trading activities 'gambling'? |
Re: Apple Stock Up 64% Since October by ektbear: 2:40am On Apr 04, 2012 |
There is nothing wrong with investing in real estate in the US. Actually there was a recent article (http://www.nytimes.com/2012/04/03/business/investors-are-looking-to-buy-homes-by-the-thousands.html) about some folks making money from this. Just the key with any sort of investing is to look for value...underpriced assets. And there is value pretty much everywhere. |
Re: Apple Stock Up 64% Since October by courage89(m): 2:59am On Apr 04, 2012 |
ekt_bear: The fundamentals are great. Rapidly rising sales, high profit margins, rapidly rising profitability. Low P/E. While i agree with you that they have an ok (not great) fundamentals; based on their reserve cash, ok products and great competitive advantage (marketing) and not because of their low PE.Their PE is not that great when you compare them company with HP, Dell and other comparable companies. They have a lot going for them right now considering they just announced share buyback program couple with the cash distribution worth about $50 billion, still going to be holding $50 billion in cash reserve after distribution, New Ipad, New Iphone, Mac series and other marketing intangibles. The question still remain, is the company worth its current price tag, approximately $600 billion? |
Re: Apple Stock Up 64% Since October by ektbear: 3:16am On Apr 04, 2012 |
hp and dell are not comparable companies. much slower growing... |
Re: Apple Stock Up 64% Since October by dayokanu(m): 3:23am On Apr 04, 2012 |
PointB: Sanusi became CBN governor in June 2009. The market already collapsed before then. Collapsed late 2008-early 2009 |
Re: Apple Stock Up 64% Since October by bittyend(m): 3:25am On Apr 04, 2012 |
How the Big Lenders Crashed the Stock Exchange and were Enabled by Dr. Soludo |
Re: Apple Stock Up 64% Since October by bittyend(m): 3:26am On Apr 04, 2012 |
^^^^^That's how Soludo crashed the damn thing - and Ndidi Onyuike the rogue woman stole her billions... |
Re: Apple Stock Up 64% Since October by courage89(m): 3:27am On Apr 04, 2012 |
Why not? Are they not competing in the same market? PC Tablet Server Phones Slow growth has never been a yardstick for determining comparable companies. Its always about the competing products |
Re: Apple Stock Up 64% Since October by ektbear: 3:31am On Apr 04, 2012 |
that makes no sense. One company is growing at massive rate. The other is shrinking or stagnating. They should have the exact same P/E? Obviously most people are willing to pay a premium for growth... |
Re: Apple Stock Up 64% Since October by ektbear: 3:32am On Apr 04, 2012 |
Apple Revenue Growth: 73.27% http://ycharts.com/companies/AAPL/revenue_growth Dell Revenue Growth: 2.16% http://ycharts.com/companies/DELL/revenue_growth lol |
Re: Apple Stock Up 64% Since October by bittyend(m): 3:32am On Apr 04, 2012 |
PointB: He was aware that the big lenders were just floating ridiculous and incorrect IPOs, and posting bogus profits and fuzzy book keeping - yet he didn't do nothing about it. If that's not a bubble, I don't know what it is. |
Re: Apple Stock Up 64% Since October by bittyend(m): 3:34am On Apr 04, 2012 |
ekt_bear: Apple Revenue Growth: 73.27% You can't really compare Apple with Dell and HP - those two should be compared to Lenovo. The big players are Sony and Toshiba, and Apple don't stand a chance with these two. |
Re: Apple Stock Up 64% Since October by bittyend(m): 3:36am On Apr 04, 2012 |
courage89: Why not? Are they not competing in the same market? Dell and HP don't are small time players - you can't compare them to Apple. HP was almost bankrupt late last year. Comparison with Sony, Samsung and Toshiba is more plausible. |
Re: Apple Stock Up 64% Since October by ektbear: 3:37am On Apr 04, 2012 |
I agree, Apple shouldn't be compared with Dell or HP. Such a comparison is somewhat nonsensical...they've never been about selling commodity computers. They've focused on the higher end market, essentially "luxury" computers. But anyway, computers aren't the biggest reason for their high growth. So for a variety of reasons, they shouldn't be compared |
Re: Apple Stock Up 64% Since October by courage89(m): 4:00am On Apr 04, 2012 |
ekt_bear: I agree, Apple shouldn't be compared with Dell or HP. Such a comparison is somewhat nonsensical...they've never been about selling commodity computers. They've focused on the higher end market, essentially "luxury" computers. I agree with your differentiation analogy... not the slow growth analogy you used earlier. 2-3 years ago, Apple, HP, Dell, Sony, were all competing head to head in the same market. Just because HP and Dell lost major market shares to Apple, Lenovo, Samsung and others does not mean they are out of that market completely. They're still competing, and can bounce back at any time. Keep in mind, these companies are playing in the technology market. All it takes is only one product to change the game. And When that turn around happens, does that mean they can't be a comparable company anymore? My point is that; slow growth in technology market does not mean anything since no company is immune to it, therefore should not be used as a yardstick for comparing companies. |
Re: Apple Stock Up 64% Since October by ade61: 10:53am On Apr 10, 2012 |
Apple stock price is worth every penny, That’s if you are smoking the right stuff. The insanity of the speculative markets continue to be cheered by deceptive advocates who have made fortune but don’t acknowledge the actually cost to the United States future which is likely to see a declining standards of living in the year ahead . This is all done for a cause, so that a handful of people can make their billions by manipulating the stock market to show an illusion of prosperity returning to the economy. The analysts who are projecting Apple stock to reach $1000 a share are the likely the same expletive, which made though wonderful forecasts about similar bubble stocks during dot com bust. I would have like to use the actual word which best describe these analysts, but I probably would be censored. The rapid rise in apple stock price has nothing to do with current earnings but is based solely on speculative growth with GREAT EXPECTATIONS that sales growth will increase by 20% annually or more for the next five years. This is why the cheerleader believes apples stock is significantly undervalued even though it has increased by over 250% in the less than 2 years. If apple stock price continues to increase, don’t jump for joy. The continually increase is nothing but herd investing which has caused apple’s stock to increase by 56 % since the beginning of the year. It was not long ago the herd believed that house prices could never go down but would continue to increase rapidly year over year. Just as the apple cheerleaders believe its stock price cannot decline, but will continue to increase. As long as the herd believes the fairytales being promoted in regards to Apple’s sales growth its stock price will increase. As soon is its earnings and net income do not meet the ridiculous expectations it will drop. FACTS: Apples 2011 net income is reported to be 26 billion on revenues of 128 billion. This is a 185% increase from Apple’s 2010 net income which was 14 billion. A good majority of Apple earnings came in the 4th quarter, I.E holiday season when it s gross earnings increased by about 18 billion from the previous quarters to over 46 billion. Unbelievable wouldn’t you agree? The herd believes that Apple can expand it sales by 20% a year for the next 5 years is a deception. To accomplish this apple sales will have to increase to 153 billion in 2012 and by 2016 and have annual sales of 318 billion. I don’t know how the herd can believe this fabrication. I guess they are smoking some good dope. Based on last year revenue and the prediction that sale will increase by of 20%, Apple’s net income will not exceed 40 billion in 2012. Apple’s net profit is approximately 20% based on 2011 earnings and net income. Sales – cost of goods sold / sales = net profit 128 billion – 102 billion / 128 billion ≈ 20 % 2012 revenue if sales increases by a 20%. 128 billion X 1.20% ≈ 153 billion 2012 estimated Net Income from gross sales. 153 X 20% ≈ 31 billion Every additional billion of net income will be more difficult to earn, due to its enormous size which is 1000 million. If the analyst’s 2012 forecast are correct Apple’s revenue will increase by 25 billion or 25000 million dollars. This amount of money buys quite a few Ipads, downloads and other apple products. How many more apple product can the market absorb? By comparison NASA Space Shuttle operating budget in it last year was 3 billion. I provide this as an illustration, to give the cheerleaders a clued about the staggering amount of income apple currently has. Apples net income from the past five years, from 2007 to 2011 is approximately 56.5 billion. A major jump in sale and income came in 2010 to 2011 when its net income increased by 11.91 billion. What is never asked is how a company with a net income of 26 billion in 2011 can have achieved a market capitalization of 590 billion. I realize there is a difference between market capitalization and the use of a capitalization rate to determine value. However, market capitalization is a qualitative value not easily determine as it represents the public consensus on the value of a company's equity and in Apple’s case it has been inflated. The use of a capitalization is a quantitative method to determine value from quantifiable data such as income and expenses. It is relatively easy to determine Apple value utilizing its net income and a capitalization rate. Apple average net income over the last 5 years is 11.3 billion. This income average would typically be utilized to estimate a value. But let’s assume an unlikely scenario that Apple net income is 40 billion in 2012. If a typical capitalization of 10% is applied to this net income, a value for the company can be estimated: 40 billion / 10% = 400 billion. I acknowledge the capitalization rates are assumption, but historically a 10% rate is typically used by investors. By this analysis Apple’s market capitalization appear to be in excess by at least 265 billion. Now let get to the 1000 dollar a share price which every analysts and his brother are saying Apple stock will achieve in a relatively short time. This will mean that Apple as a company is worth a Trillion dollars with a the capital recovery of more than 25 years on the money invested as Apple’s net income will likely stagnate at 40 billion, due to the enormity of that sum. Apple’s income growth is beginning to slow, but this does not stop the analysts from developing deceptive forecast about Apples future growth citing its relatively low market share of worldwide computer, Smartphone and Tablet sales. One must ask who is paying these analysts for these deceptive forecasts. Could it be the herd on Wall Street which severely damaged the US Economy by all the financial instruments which were developed, supposably to limit risk, but were merely another device which allows them to hedge their bets? . It’s not surprising that the 70% of Apple’s stock is owned by institutional investors. Apple as company is a great candidate to collude on, due to its incredible growth rate over the last 5 years and the difficulty in evaluating its most important characteristic which is the marketing of its products. Marketing is an intangible asset, akin to Goodwill which is very difficult to evaluate There is a reason, Apple’s sales are less than its competitor which is due to their considerably higher cost, which in many cases are functionality no better than their competitors. But if you listen to the experts, it’s like Apple has no competitors or competing products which the consumer can choose, but can only buy Apple products. I have several apple products, including an ipad which is nothing more than an oversize iphone. The Ipad functionality and interface are significantly inferior to a lap top. The appeal must be to the herd, which is high on something and give them a convenient place to watch video as its utility is more like a toy than a useful device. If Apple wishes to capture more market share of sales it will require developing additional products with lower prices as the more affluent market have been saturated, leaving the less capable market the task of buying all though millions products which are forecast to be manufactured and sold by apple in the coming years. Just as computers, big screen TVs and many other electronic devices have been commoditized, so will apple products if they wish to generated more sales. This directly related to Apple’s value and alleged income growth potential. Guess what else is affected by a lower sale price? That right earning and net income will be lower, which is another reason Apple income will stagnate. I could go on about why apple stock is a bubble, but it would be in vain as the herd does not wish to sober up as the dope Wall Street is selling is that good. Maybe I need a toke. |
Re: Apple Stock Up 64% Since October by kodewrita(m): 8:58am On Apr 16, 2012 |
@ekt_bear is there a way a Nigerian resident in nigeria can invest directly in the NYSE? |
Re: Apple Stock Up 64% Since October by ektbear: 5:01pm On Apr 16, 2012 |
I think anyone can. You just need to open up an account with a investment company. Perhaps one in Nigeria will allow you to buy foreign stock. If not, then open up an account with one in the UK or US. |
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