AAPL sinking below NASDAQ 100

  • Posted: 20 June 2011 12:27 PM

    This is insane, AAPL went below 311 today. All this because we didn’t get a new IPhone at the Developers conference? Does actual fundamentals have any influence at all with Institutional fund managers?

         
  • Posted: 20 June 2011 01:04 PM #1

    Likewise.  Why is the PE ratio of AAPL so low, and as others have said, like a public utility.

    Is really the only option for AAPL a 10 to 1 split, or is there any other hope?

         
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    Posted: 20 June 2011 01:31 PM #2

    Maybe investors are disappointed that Apple won’t be getting 30% of everything Amazon sells for its Kindle app.

         
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    Posted: 20 June 2011 01:50 PM #3

    Bosco (Brad Hutchings) - 20 June 2011 04:31 PM

    Maybe investors are disappointed that Apple won’t be getting 30% of everything Amazon sells for its Kindle app.

    Yes, I’ll knock a couple of cents off my estimate for software sales through the App Store.

    As to the total estimate of 6.35 for the quarter and circa 30 bucks for the next four quarters….doesn’t register.

    I don’t think that is it somehow.

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  • Posted: 20 June 2011 01:51 PM #4

    Bosco (Brad Hutchings) - 20 June 2011 04:31 PM

    Maybe investors are disappointed that Apple won’t be getting 30% of everything Amazon sells for its Kindle app.

    Nope. So far iTunes distribution fees have not kept pace with the outsized revenue growth from device sales and few if any analysts have distribution fees as a significant driver of revenue growth.

    Apple’s not alone in the sell off. GOOG is now trading at 2006 levels and RIMM continues to slide.

         
  • Posted: 20 June 2011 01:52 PM #5

    ktodack - 20 June 2011 03:27 PM

    This is insane, AAPL went below 311 today. All this because we didn’t get a new IPhone at the Developers conference? Does actual fundamentals have any influence at all with Institutional fund managers?

    The issue isn’t quite that simple but uncertainty about the next iPhone may impact sentiment. However, data suggests iPhone unit sales will continue at a 100%+ growth rate in the June quarter even without announcement of a new handset.

         
  • Posted: 20 June 2011 02:02 PM #6

    If iPhone delay was the real problem we would have seen this after WWDC ... we did not.

    The world knows there will be a iPhone5 soon enough till then sales of iPhone4 are strong, we sold 19 MILLION last quarter. 

    This selloff makes no sense and is a product of big traders looking at the very short term picture.  As a long I’m not worried , pissed off ... yes… but not worried. 

    I’d be careful calling a direction either way here as logic is out the window .... we are at the whim of Wall Street and their short term wills ...

    CNBC had a segment on Apple and it’s share price decline, nothing of substance was said but several said this was simply a “technical” correction ....

         
  • Posted: 20 June 2011 02:48 PM #7

    Keep in mind the share are off less than 14% since the February all-time high.

         
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    Posted: 20 June 2011 04:18 PM #8

    Also keep in mind the stock is doing miserably, DT.  (Oh yeah, and GOOG’s P/E is still 18.83, so investor sentiment - whoever those investors are - is considerably stronger.)

    I didn’t think it was possible when asymco predicted a P/E of 15, but guess what, he turned out right.  Up is down is prevailing at the moment.  Success is met with selloffs, and only two things can meaningfully reverse the trend.  Board of Director action (stock split, a share buyback is looking only somewhat crazy now) or iPhone 5.  Earnings?  Well, did they work last time?

    During AAPL’s last major slump - the throes of the Great Recession - it traded at a low of around 83 in Mar 2009.  TTM during that time?  If my calculations are correct, $5.39.  Resulting P/E aka investor sentiment index? 15.4!

    Yep!  AAPL had a richer valuation on much smaller earnings and growth during a time when everyone thought the world was ending.  We’re not in Kansas anymore.  So why is AAPL?

    Will you still be so sanguine at 300, DT?  Or below?  Really?  How about after earnings?  Yes, it’s common stock, but there comes a point where a shareholder’s derivative action actually starts looking merely ridiculous, instead of completely insane (yes, you can take what I said literally).  If nothing else it’d be a fascinating test case…how long will Apple stand idly by before moving a finger to protect shareholders?

    [ Edited: 20 June 2011 04:30 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 20 June 2011 05:41 PM #9

    Still thinking and trying to understand its relationship to the old fashion investment strategies ex. owning common.
    Philip Elmer-Dewitt at Apple 2.0 took a look at weekly options set to expire last Friday as a possible explanation for the sudden plunge.
    http://tech.fortune.cnn.com/2011/06/16/who-knifed-aapl/
    chart

    Link

    Quote:
    Among the dwindling numbers of retail Apple investors, there were the usual cries of market manipulation and calls for reform of the weekly options markets, which some believe have become the tail that wags the underlying stock.

    [ Edited: 20 June 2011 05:50 PM by DawnTreader ]      
  • Posted: 20 June 2011 05:56 PM #10

    Mav - 20 June 2011 07:18 PM

    Also keep in mind the stock is doing miserably, DT.  (Oh yeah, and GOOG’s P/E is still 18.83, so investor sentiment - whoever those investors are - is considerably stronger.)

    Again, the shares are off less than 15% from the all-time high set back in February. I don’t suggest comparing p/e multiples in companies in different industries.

    Google is trading at 2006 levels. I don’t expect that to occur in Apple’s case. I will be just as confident of my view if AAPL fell to 292 or about 20% off the all-time high but I’d be too busy scrounging for change to buy more shares I wouldn’t have time to worry about it.

    The role of management is to boost earnings. Management is doing quite fine. I don’t expect management to take extraordinary steps to temporarily or artificially boost the share price.

         
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    Posted: 20 June 2011 06:13 PM #11

    DT, what do you say to comparing P/Es for the same company in two very different time periods?  I’ve done that, and you haven’t addressed it. 

    AAPL is trading at P/E lows we haven’t seen in…when was the last time AAPL traded at a P/E befitting of IBM (which is at 13.85, btw)?  If AAPL doesn’t move after earnings, we’ll have a P/E of about 13 based on my estimates.

    AAPL is clearly underperforming and some manipulation on some level is going on.  The time has come to acknowledge that something is not right with this picture.  Can we do anything about it, no.  Will it kinda work itself out in a few months, probably.  Should you turn a blind eye to what’s happening now, no.

    [ Edited: 20 June 2011 06:18 PM by Mav ]

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 20 June 2011 07:23 PM #12

    Mav - 20 June 2011 09:13 PM

    DT, what do you say to comparing P/Es for the same company in two very different time periods?  I’ve done that, and you haven’t addressed it. 

    Please check the p/e multiple you are using for the prior period. Was deferred revenue accounting in effect? That would impact reported earnings.

         
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    Posted: 20 June 2011 07:49 PM #13

    By doing some digging, I found AAPL’s restated retroactive “new GAAP” earnings ($7.45 ttm, IIRC).  AAPL’s “actual” lowest P/E was about 11.1 set in March 2009.

    Of course, it wasn’t GAAP at the time, and Apple didn’t start giving out “non-GAAP” numbers until fiscal Q4 2008.

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 20 June 2011 08:38 PM #14

    Mav - 20 June 2011 10:49 PM

    By doing some digging, I found AAPL’s restated retroactive “new GAAP” earnings ($7.45 ttm, IIRC).  AAPL’s “actual” lowest P/E was about 11.1 set in March 2009.

    Of course, it wasn’t GAAP at the time, and Apple didn’t start giving out “non-GAAP” numbers until fiscal Q4 2008.

    Understood. But the share value was influenced at least a bit by what analysts understood to be a deferred revenue scenario.

         
  • Posted: 20 June 2011 08:40 PM #15

    As strange as it sounds, pushing the iPhone 5’s debut to the September quarter will improve the June quarter’s iPhone unit sales numbers.