AAPL is Overpriced!
- Thread starter Safilo
- Start date
Substantial resistance around the 560-570 area.
Quote from drownpruf:
Dumb assumptions. The multiple may be 20x with the stock at 300 when demand goes to shit, and they will be DESPERATE to issue.
Debt is leverage. Nobody acting in their self-interest would pay 4% if earning 2%, unless you're a delusional American consumer. Obviously the arb is operational in the case of AAPL.
I am not going to get into the mindless capex and multiple expansion assumptions you're making other than to say that AAPL has no appreciable debt (14x ratio). They could fund their capex with cash for 20Y.
The EPS accrual argument is a bet on the share-price. Those deals are generally stupid; i.e., it's done nothing for IBM. Issuing stock is the arb.
There will always be investments with a better ROI outside your core, and without leveraging on operations. You don't add risk beyond the operational risk you take as a public company. The answer IS NOT to discretely become a private co. How would it have looked if done at 600-700 on the share price? It's adding gas to a fire.
GOOG didn't do buybacks; they invested outside their core (Youtube, etc) and that was a massive add to their multiple.
The convexity of earnings // dilution > 0
Earnings only increase in Apple's case which is why it didn't work for IBM. Also, there are different unique capabilities Apple's products have that are just different than everything and this is part of the Apple ecosystem and specially designed App Store for iPods iPhones and airs.
With regard to core their core is maxed out since there really aren't any new outlets except for china and the daming intellectual piracy from Asians like Samsung who don't respect patents and blatantly ripped off the technology without an ecosystem to support the technological advance.
As I write this on my black iPhone 5 this device has changed the way I live even if I am still watching dvr'd KC football on a Samsung that company has built a dumb knockoff and so has everyone else.
Journals, outstanding float is just something to check. When they report what percent is complete then divide that number by dollars spent and you'll have your share count.
I stand corrected on the $150 billion buy back with it really being Ichan's fantasy but at $44 billion when they announce the completion of the buy ask they'll report an average price so you divide whatever that number turns out to be into the buy back amount and just know that that's the share count reduction.
Until they actually retire stock the difference for Apple is that demand will never wane for those of us who rely on the features unique to iPhones specifically and ride a continual sales epoch of iTunes sales along with the unique apps for every Apple product that really differentiates it something as a hardware advancement akin to what Windows competitive advantage might have been at least to telecom markets.
As promised, replying with success as 560 was met and breached for brief minutes.
I don't make calls, was just replying to to an overprice comment at the time of the comment.