AAPL Intraday Updates (Archive)

  • Posted: 19 June 2011 05:58 PM

    Is it time for Jeff’s (Mercel’s) AAPL coiled spring to unwind?

    [ Edited: 25 June 2011 05:37 AM by DawnTreader ]      
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    Posted: 19 June 2011 06:04 PM #1

    Perhaps not quite yet….we need to get through month end, through QE2 noise, out of the European uncertainty ...and a focus on earnings and new product launch in Aug/Sept.

    I think the big(ger) money begins to move to apple after the July 4 holiday.

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    Posted: 19 June 2011 06:07 PM #2

    Not yet, I don’t think.  IMHO, one more wave up, one more wave down, THEN the coil unwinds.

         
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    Posted: 19 June 2011 06:19 PM #3

    lovemyipad - 19 June 2011 09:07 PM

    Not yet, I don’t think.  IMHO, one more wave up, one more wave down, THEN the coil unwinds.

    That seems like a reasonable ‘expectation’.

    The near term risks are debt ceiling update and the Euro BS. Assuming both of these are settled in short order (seems unlikely) I still don’t see aapl making any meaningful move up until middle July.

    I keep ratcheting my expectation DOWN re aapl. Now factoring in a trailing PE of 12-14 for mid-late 2012. Basing these estimates on an expectation of slowing growth in late 2012 and SJ retiring.

      cheers: long shares and 2103 ITM leaps.
        JohnG

    [ Edited: 19 June 2011 06:23 PM by johnG ]      
  • Posted: 19 June 2011 06:47 PM #4

    PED is lending support to AAPL’s status as a “blue-light special.” 

    http://tech.fortune.cnn.com/2011/06/19/the-3-most-undervalued-tech-stocks-google-apple-ibm/

    Although I too favor the PEG ratio over P/E, the latter is sparingly used among retail investors.  Nonetheless, the conclusion is the same:  Apple IS oversold, as you commented below the fold of the article. 

    I don’t know what the institutions and retail buyers are waiting for—at some point the train will start to move and accelerate and there won’t necessarily have to be a catalyst.

    As I posted elsewhere, I sold all my VZ last Friday near the HOD.  I used only 15% of the proceeds to purchase AAPL calls.  I’m prepared to buy more should the opportunity to present itself.  I may also be writing some calls near-term to join WS machinations.

         
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    Posted: 19 June 2011 07:47 PM #5

    Despite all evidence to the contrary, I think WS and retail investors just cant quite believe that apple will continue to keep growing at a great rate for the next several years.

    Therefore I think we may have moved into a long term pattern whereby APPL share value is only valued based on a multiple of its TTM - so its share price is only going to rise based on each quarters earnings increasing TTM. 

    The question of course is which multiple AAPL is given by the market, and since I think the market fails to be convinced of AAPLs obvious long term growth prospects, then I think there is more of a chance that the market thinks AAPL may infact contract or at least stay static earnings wise (Due to a combination of FUD like Jobs health etc, and potential - but unlikely - scenarios such as iphone margins collapsing & iPad somehow losing its dominant marketshare and/or the tablet market not being as big as we presume).

    However I think even the market cant fail to notice AAPLs cash hoard, and the likelyhood of earnings contraction is counterbalanced by this growing each quarter.

    Therefore I think AAPL may sustain a PE ratio similar to a mature, slow growing tech company. Something like Microsoft or IBM with PE multiples ranging from 10-14.

    Based on my hypothesis above, the only way apple could increase its share value would be to make use of its cash hoard to buy back shares or start paying a regular dividend of an amount that would be enough of a premium over tresuries to significantly move the PE higher (not sure what that yield would have to be - 8%? 10%?). The only other way would be to somehow convince the market that it infact will continue to grow its earnings at a remarkable rate into the future, but short of what it has already done by its performace over the last 5 years, I dotn see how that can be done.

    [ Edited: 19 June 2011 07:49 PM by Burgess ]

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  • Posted: 19 June 2011 09:02 PM #6

    You wrote:  Therefore I think AAPL may sustain a PE ratio similar to a mature, slow growing tech company. Something like Microsoft or IBM with PE multiples ranging from 10-14.

    I disagree.  Perhaps it is the perception among the few that Apple’s growth rate today isn’t sustainable at anywhere near current levels.  However, consider the expanding markets of smart phones and tablets.  Further, Apple has only a 10% market share in Macs, even less in enterprise.  If the age of the PC is contracting, as many here believe, then Apple is positioned to capture these opportunities for growth as well as anyone.  Apple isn’t done innovating, so the upside is probably even better than what we know today. 

    GOOG has more to worry about than Apple, yet the former has a P/E of 19 after some real hits to the stock price. 

    Analyst expectations for future EPS growth 3-5 years out is 59% and 28% for AAPL and GOOG, respectively (per CNBC).  I wouldn’t be so sure that WS disbelieves Apple potential for growth.  Apple’s low valuation is puzzling, but that doesn’t mean it’s valid.

    Don’t let the current price of AAPL (and its P/E) make you pessimistic.  Apple’s EPS and growth rates will move the PPS, whether or not the P/E regains 18 or 20.

         
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    Posted: 19 June 2011 09:17 PM #7

    Mercel - 20 June 2011 12:02 AM

    You wrote:  Therefore I think AAPL may sustain a PE ratio similar to a mature, slow growing tech company. Something like Microsoft or IBM with PE multiples ranging from 10-14.

    I disagree.  Perhaps it is the perception among the few that Apple’s growth rate today isn’t sustainable at anywhere near current levels.  However, consider the expanding markets of smart phones and tablets.  Further, Apple has only a 10% market share in Macs, even less in enterprise.  If the age of the PC is contracting, as many here believe, then Apple is positioned to capture these opportunities for growth as well as anyone.  Apple isn’t done innovating, so the upside is probably even better than what we know today. 

    GOOG has more to worry about than Apple, yet the former has a P/E of 19 after some real hits to the stock price. 

    Analyst expectations for future EPS growth 3-5 years out is 59% and 28% for AAPL and GOOG, respectively (per CNBC).  I wouldn’t be so sure that WS disbelieves Apple potential for growth.  Apple’s low valuation is puzzling, but that doesn’t mean it’s valid.

    Don’t let the current price of AAPL (and its P/E) make you pessimistic.  Apple’s EPS and growth rates will move the PPS, whether or not the P/E regains 18 or 20.

    I agree. I am very bullish apple. Perhaps I wasnt as clear as I could have been on that point.

    I agree that apples earnings are highly likely to continue to increase dramatically over the next few years, at least doubling what they are now.

    My point was that even if this happens, the market in general may still only assign a relativly low PE multiple despite the amazing growth, as the market may always consider the apple growth train as just about to slow down. And when the slowdown does not eventuate, the assumed slowdown moves to the next quarter. then the next… then the next…etc.

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    Posted: 19 June 2011 09:34 PM #8

    One catalyst long seen by the AFB crowd but perhaps not by the average investor…....assuming smartphones are a zero sum game( which it is not due to massive new market growth, but bear with me) RIMM is now acknowledged to be losing market share more quickly. There must be winners in that game, and Apple should be one such winner.

    Adding an additional five percent of RIMM’s domestic base to iPhone is something even pragmatic bean counters should be able to grasp.

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    Posted: 19 June 2011 09:53 PM #9

    Red shirted ensign - 20 June 2011 12:34 AM

    One catalyst long seen by the AFB crowd but perhaps not by the average investor…....assuming smartphones are a zero sum game( which it is not due to massive new market growth, but bear with me) RIMM is now acknowledged to be losing market share more quickly. There must be winners in that game, and Apple should be one such winner.

    Adding an additional five percent of RIMM’s domestic base to iPhone is something even pragmatic bean counters should be able to grasp.

    Amen to that brother!

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    Posted: 20 June 2011 12:17 AM #10

    DawnTreader - 19 June 2011 08:58 PM

    Is it time for Jeff’s (Mercel’s) AAPL coiled spring to unwind?

    no.

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    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Posted: 20 June 2011 12:44 AM #11

    iOSWeekly - 19 June 2011 10:47 PM

    Despite all evidence to the contrary, I think WS and retail investors just cant quite believe that apple will continue to keep growing at a great rate for the next several years.

    They’ve had the existence of android and it’s rapid growth being a spoiler for Apple and it’s prospects for long term growth.  That illusion has already begun to unwind with the introduction of iPhone on the Verizon network.  They’ll have no such crutch available for the iPad market.  I’m suggesting that you started your hypothesis with a false premise.

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    Posted: 20 June 2011 01:25 AM #12

    Not sure how this week will go, EU BS, Greek BS, QE2 ending in 10 days, and the obstinate Senate and Congressional assholes bickering over How much and when to raise the debt limit.

    I do look forward to next Mondays auction, for that Nortel Canadian Gold! Now that the Fed’s have approved Apple as a bidder, you can rest assured that Steve et al, will be all over this like stink on sh!t, and maybe, just maybe, they scoop em all up!

    Loves me some good stanking gold…

    Best to all over the next week, with your weeklies.

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    Posted: 20 June 2011 01:28 AM #13

    BillH - 20 June 2011 03:44 AM
    iOSWeekly - 19 June 2011 10:47 PM

    Despite all evidence to the contrary, I think WS and retail investors just cant quite believe that apple will continue to keep growing at a great rate for the next several years.

    They’ve had the existence of android and it’s rapid growth being a spoiler for Apple and it’s prospects for long term growth.  That illusion has already begun to unwind with the introduction of iPhone on the Verizon network.  They’ll have no such crutch available for the iPad market.  I’m suggesting that you started your hypothesis with a false premise.

    I’m hoping you are right, but preparing for if you are wrong.

    I’m only putting out there the idea that the perception of apples growth potential is wrong in the markets eyes, Im not agreeing with the reasons behind the perception (relieance on Steve Jobs, tablet market size, iphone ASP maintainable, android threat you mentioned, etc).

    im arguing that the perception is strong though, and is going to be hard for AAPL to break free from, even as it continues stellar earnings reports.

    Maybe if had more than 4 blockbuster product categories, that may allay wall streets fears…
    - AppleTV has potential to morph into a lucrative TV display line (5%-10% of the display market, the profitable high end, would be very nice),
    - iADs could morph into the next generation Search engine,
    - whos to say apple couldnt turn the 200 million iOS devices into a sort of quasi Social network.
    - As bandwidth speeds & caps slowly increase around the world, itunes already stands as the biggest distributor of paid digital content, no reason it can’t also become the biggest distributor of online video also - if only there was a huge media conglomerate company who’s largest shareholder was somehow deeply alligned with apple and could start providng exclusive access to itunes of grade A first run titles….

    ....endless possibilites for huge growth. WS is blind.

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  • Posted: 20 June 2011 02:17 AM #14

    Monday

    R4       352.63
      midpoint   347.68
    R3       342.74
      midpoint   337.79
    R2       332.85
      midpoint   329.70
    R1       326.55
      midpoint   324.76
    PP       322.96
      midpoint   319.81
    S1       316.66
      midpoint   314.87
    S2       313.07
      midpoint   308.12
    S3       303.18
      midpoint   298.23
    S4       293.29

         
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    Posted: 20 June 2011 08:15 AM #15

    I have a large buy order at 318.00 that I just canceled (hopefully), as I think we are in for some pain again. Looks like 318.5 pre-market, and who knows once the bell rings.

    This is getting old fast!

    Maybe I should go back to trading coke wink

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    “the power to crush the other kids”

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