Doren, ChrisG re: questions
Doren re: Anyone have any idea why Apple is out performing the Nasdaq, by a wide margin, [yester]day?
An equally good question would have been why AAPL had been dropping the week before. There 's a fair amount of speculation about AAPL these days, post-Steve. Any close observer of Apple knows that some great products are in the pipeline and all bear the stamp of Steve. But the market doesn't know that now, if it ever did. And with Steve gone, so is market certainty. It's like the good old days when AAPL board members knew Apple had some great stuff coming but not many others did. And we were all complaining about AAPL's low valuation. And those of us who bought and held made bushels of money. "They just don't get AAPL", we used to say. Now that's become a cliché used for other stocks.
ChrisG re: IMO Apple is pretty much priced to perfection, based not on its share price but on its enterprise value.
I believe that Apple's value is the second highest in the world, second only to Exxon Mobil. On its face, this is ridiculous.
Exxon generates $70 billion EBITDA per year. And because Exxon supplies a necessity product, its EBITDA should be pretty stable.
Comparing AAPL to XOM is both good and stupid. Stupid because they are fundamentally different companies, at fundamentally different points in their evolution. Exxon-Mobil is a value company. Apple is a growth company. Yes, even at its current lofty market cap. The numbers back this up, you could have made almost the entirety of your comparison at almost any time during the past 8 years, and this chart would have looked much the same at any point during that stretch:
finance.yahoo.com
Applying value company metrics to a growth company will mostly just generate noise.
But it's a good comparison in another way ... you have to ask yourself when Apple will make the transition from a growth company to a value company. Microsoft did, after all, but that point was obvious (at least to me) long ago ... heck, I made that call back in 1998:
siliconinvestor.com
The answer is that Apple will cease to be a growth company either when its markets all become saturated and it has ceased penetrating new ones, or else one of its products flops. That last happened with the G4 Cube 11 years ago. It could happen again at any time. But that's been true for the past 10 years and the stamp of Steve should ensure that it won't happen for at least the next year.
New iPads coming early next year, I think. And maybe a quantum leap from today's AppleTV. (see Message 27736267 )
The new iPad will surely be very successful, expanding Apple's huge dominance in what is still a nascent tablet market. A new TV (or more likely in my mind, a new interface to TV) could have a similar impact to Apple's entry into the music player, phone, and tablet markets: explosive. Everything that everyone else made in those markets sucked compared to what Apple unleashed.
After that, without Steve, it's hard to know. But we should be good as a growth stock for at least another year. Re-evaluate in 3-6 months. |
