AAPL ISM (PE) Expansion

  • Posted: 08 June 2011 09:02 PM

    If I’m right about AAPL’s ISM compressing because Apple has been missing its internal numbers for the past 3 quarters, than this quarter’s results will cause ISM to expand.

    Should Apple sell more than 8.5 million iPads (the culprit in missing numbers), they will sell ~30 million iOS devices during fiscal Q3.  That’s 15% of the installed base…in one quarter.

    With sales like that, the need for multiple device syncing becomes much more important.

    Regardless of what we think here, WS isn’t stupid (well not entirely so).  iCloud is going to push multiple iOS device adoption that will drive more Mac sales, and do so at unparalleled levels.  Revisit the iOS device sales mentioned above.

    Even the most timid investor is going to be impressed by the compelling value proposition of multiple iOS devices.  That demand (buyers) for AAPL will create a nasty imbalance between supply and demand, pushing the price of AAPL up significantly.

    I think this happens the day after July earnings/guidance.

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  • Posted: 08 June 2011 09:35 PM #1

    Obviously I hope you’re right for some P/E expansion on the Q3 2011 earnings call. 

    However, I doubt AAPL’s P/E compression has anything to do with Apple’s internal #s.  For one thing, Wall Street #s expectations were lower than Apple’s internal #s.  Even if one can make a case for divining Apple’s internal #s (an extrapolation at best), I think there are better explanations out there for P/E compression.  Or simply that the market is inefficient as hell.

    I think AAPL downside is limited at these levels and is in “seeking catalyst mode.”

         
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    Posted: 08 June 2011 09:52 PM #2

    apple needs to list ADRs on more foreign exchanges - theres likely millions of individual investors who would like to buy shares in apple if it was an easy process - at present the process for foreigners to directly invest in US listed securities is far from an easy process.

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  • Posted: 08 June 2011 10:35 PM #3

    iOSWeekly - 09 June 2011 12:52 AM

    apple needs to list ADRs on more foreign exchanges - theres likely millions of individual investors who would like to buy shares in apple if it was an easy process - at present the process for foreigners to directly invest in US listed securities is far from an easy process.

    Why do you think it is a difficult process from foreigners to directly invest in US listed securities? I am a foreigner, living overseas, and have been investing in US securities for over 20 years. US brokerage firms have branches in other countries for a very long time, think 50 years or more. Internet brokerage firms have set up offices overseas at least 20 years ago. I trade US securities and options both via full brokerage houses and online brokers. I have not experienced any difficulties so far.

         
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    Posted: 08 June 2011 11:07 PM #4

    MacOz - 09 June 2011 01:35 AM
    iOSWeekly - 09 June 2011 12:52 AM

    apple needs to list ADRs on more foreign exchanges - theres likely millions of individual investors who would like to buy shares in apple if it was an easy process - at present the process for foreigners to directly invest in US listed securities is far from an easy process.

    Why do you think it is a difficult process from foreigners to directly invest in US listed securities? I am a foreigner, living overseas, and have been investing in US securities for over 20 years. US brokerage firms have branches in other countries for a very long time, think 50 years or more. Internet brokerage firms have set up offices overseas at least 20 years ago. I trade US securities and options both via full brokerage houses and online brokers. I have not experienced any difficulties so far.

    I was referring more to the ‘Mom & pop’ investors. I doubt they have much appetite to go throught the process I had to go through last year (I am also a foreign based investor).

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