So you're saying you don't even have a valuation model, but you claim that aapl is "actually" worth $500 per share. This basically proves my point.
I showed you my reasoning why I think it's worth more on the link provided. What are you trying to prove? You could do a simple 5x net and the company is $600 per share. Obviously there are other factors. I don't know what agenda you have on this company? Do you want it to fail? Are you a Microsoft guy? What companies you invested in and how did you evaluate those companies? http://m.seekingalpha.com/article/1159731 Here is one model that has the value of the company being $485. This same site said they come out with an Apple TV; then it's over $500.
No plans to own the stock for the next 72 hours. But I think a lot of people are making money off the stock without even buying a share.
Possible I guess but that's against the law. Guess if you want to take a chance of going to prison for profit; it's worth the risk.
It's not against the law. The guy says on the link you gave me that he won't own the stock for the next 72 hours. As for others making money off the stock, brokers make a commission. Options traders make vigorish. &c.
Okay so now that I am on a computer, let me give you the best summary of how I value Apple being a $500 stock. 1.) Apple's P/E is 8.96 2.) Apple's EPS is $44.11 3.) I multiply the EPS by the P/E for a total of $395.22 per share. That is the poor man's evaluation of the actual value of the stock. 4.) Now I take into consideration that the company has an access of 187 billion in cash and like Denny pointed out, a book value of $135.00; which I suspect will give an increased value of $135.64 per share. The reason why I incorporate the "book value" is, if apple actually liquidated all their expenses; they would be at zero liability and their cash alone can compensate all their debt, giving them an additional $135 per share. So adding the $135 + 395.22 = 530.22 per share price.
Just wow. 1-3 shows you do algebra ok. It shows you don't get what P/E and EPS mean. Of course P/E * EPS = current price. And P/E has nothing to do with book value; the two are unrelated. You can't take the current stock price and just add the book value per share and get some new price. The book value is only some theoretical minimum price the stock should be.
You are missing the point Denny. They can still have the profit, just paying off their debt with the excess cash they have. The P/E and EPS stay the same, less the entire liability; with the exception of accounts payable for Cost of Goods sold.
What a bunch of mumbo jumbo. Look, the P&L is the checkbook register (deposits, checks written). The balance sheet is the bank accounts and loans. Their profit will be affected by using cash from the balance sheet to paying off a loan on the balance sheet. They won't have to write a check for the loan payment. But they won't have the cash used to pay off the loan, either. Profit isn't cash in the bank, though. If the company is using it to buy capital assets, the cash flow will be $0 while the assets on the balance sheet will go up.
Denny what I am saying is this.... http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet Apple has over 135 billion in cash. They have no long term debt, risk or anything that a normal growth company pains. So the main "liability" is accounts payable for inventory, payroll and taxes. Their cash alone can buy controlling interest in AT&T; which would give them a big "shoe in" for an apple tv push and added revenue for subscriptions of cellphone service.
They have 135 billion in cash Denny. They have more than enough to payoff any liability. They are doing it right now anyway. That is a fucking strong as company. Show me their long term liability?
Like I said, their book value is $135/share. That accounts for their $billions in cash and equivalents and whatever liabilities they have. I have no idea why you think Price / EPS * EPS = Price is relevant to any of this. (notice the EPS cancel each other out leaving just price?)
Here is an article by Brett Arends; whom was hard on apple for a long while. http://articles.marketwatch.com/201...le-stock-tim-cook-forecast-per-share-earnings There is a reason why he is defending the company. He thought it was just an average price when it was a $700 stock because there was no real savings to buying into the company. Now that it's this low, with sales being increased each year; this is truly the time to buy. What does this mean? It's trading less than 50% of how many other companies trade. It's 6 times earnings, compared to the average of 14 times earnings that many other companies trade at. There is plenty of new markets for apple, like China that was just given. There is plenty of growth with just it's same products. Basically, they are still increasing sales each and every quarter, high profit and cash revenue and now giving dividends to its shareholders.
Um, well since the book value is never really used as the main factor by any big time investment firm. Try and follow others Denny. Explain to me why Amazon is trading at $262.15, with no true P/E and a negative EPS? http://finance.yahoo.com/q?s=AMZN And you go by this weird "book value" scenario. Well amazon's book value is 18.09 per share! LMAO!!!!!!
Or google's book value?! http://ycharts.com/companies/GOOG/book_value_per_share $228.94, compared to it's $800 price. 28.61% of the actual value. Apple's book value is $135, and it's trading at 397. That's 34% the value of the company. If you use the google model; its very underpriced. If it used the google mold, the book value should be $113.58 If you use the google mold; apple should be at least a $480 share
http://blogs.barrons.com/techtrader...-buy-citi-bmo-cut-estimates/?mod=yahoobarrons Interesting article on a $600 share price justification.
The price of the stock, beyond book value, is purely psychological. It's what the consensus of buyers are willing to pay. Period. Google is rapidly growing, as is Amazon. Those companies demand a premium for that reason alone. You make a big mistake to compare the companies' PE ratios, or other fundamentals. Apple is a hardware manufacturer. Amazon is a retailer. Google is an advertising company. They're not in the same industry. Your last link discounts the actual fact that AAPL has decelerating earnings and concludes with "but we believe..." Amazon is in rapid growth mode. A company that's grown as fast as Amazon with real revenues is often valued by investors at some multiple of TTM sales. At some point, the growth will stop and they'll cut down expenses so they profit nicely. They won't need to spend as much on advertising, support, etc., if they're not growing so fast.
Well it's a good thing you got that weak argument about book value off your chest. Apple is trading for only 6 times earnings. If it traded like the normal rate of 14; it's a $617 share. BTW... even though their growth dropped this year, they are forecasted to increase at a better rate than Amazon, so that argument is weak too.
