Kelly,
Nice article. I agree with much of what is said in it about Apple doing very well.
Just a couple of random thoughts.
I think equating the share price with how Apple is doing overall or what kind of job Cook is doing is a mistake. I think some things have changed for Apple since it became the biggest Tech company on the planet. People do love to try to take down the 800 pound gorilla or predict when it will happen. I think this accounts for some of the negativity around Apple right now. Lots of people sitting around trying to be the "ONE" to predict when Apple failed so they can call bragging rights.
I also think that the law of large numbers is starting to wear on Apple's growth rates. It is hard to grow by the same percentage when you are as large as Apple is right now. I think another thing is the share price itself. Being a $500 stock, I think many people think Apple is priced for perfection, which it really isn't IMO. Just a simple look at trailing PEs on some of Apple's competitors(MSFT 14, GOOG 22, AMZN > 3000) and see how fast they are growing compared to Apple really speaks to Apple being undervalued but that is not the perception that I see many having out there right now.
What I don't know about is if Apple and iOS are destroying Android. Samsung has done well for itself and has stoked the fires for those who want a high end device that runs Android well, and seems to run it possibly better than any other device maker, right out of the box(I have no direct personal experience with Android, I am just parroting what I have heard and read others say).
But many have said that the phone market is fickle and it could turn against Apple. If that is true, it could also turn against Android and Samsung as well but you don't see that mentioned when anyone tries to value Samsung or Google.
One of the other things that may be adding to the negative view of Apple is the voice of the independent analysts in the Braeburn group. When only the established analysts were following Apple, being more conservative, they almost always undershot what Apple eventually did so it always looked like Apple was doing well and beating all or most estimates. The independent analysts are very aggressive in their predictions that even when Apple has done well it couldn't meet their expectations but they make it seem that Apple is doing poorly by their standards. I think this adds or may be adding to the degree of disappointment about Apple and may be causing Apple to have a PE less than that of MSFT. I like seeing the predictions. But, for example, if Apple doesn't sell 50 million iPhones this quarter(and I think some are calling for 50 million iphone 5s), there are lots of people who will be very disappointed. So I wonder if we are setting our expectations too high that not even if Jobs was still here could Apple satisfy the investor/trader that is out there. I think a dose of reality is what is really needed here.
It would be interesting to see how well other tech companies pe's would hold up having a bunch of very aggressive analysts overshooting what they can actually deliver.
Anyway, I still see a ton of Apple stuff compared to any of the other devices but I do see more Samsung stuff around than I have before so I think they are doing well right now.
I also agree(with another of your posts) that having the posters with the most annoying style of posting here on ignore is a good thing and has kept this board palatable. Also with special thanks to Allen for keeping this a great place to discuss Apple and its products.
Good luck out there
Neal |
