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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: ChrisGillette who wrote (122031)	11/16/2011 5:47:16 AM
From: DanD	2 Recommendations Respond to of 213172

When you're already the most (or second-most) valuable company in the world, there's just not that much upside left since expectations are already incredibly high. A PE of 14 when your 4 year growth rate of around 50% means expectations are extremely LOW, not high. And Steve Jobs' illness and subsequent death are the only reasons I can come up with why the stock price has been so depressed. Now maybe it will be based on the actual performance of the company, instead of the fear of losing Steve Jobs that has hung over this thing for the last few years. Dan D.

To: ChrisGillette who wrote (122031)	11/16/2011 6:30:46 AM
From: Road Walker	Read Replies (1) \| Respond to of 213172

But does anyone dispute that Exxon's cash flows are much more reliable than Apple's? Much more? I would say more. Oil is a commodity that fluctuates wildly in price and that does effect Exxons cash flow. Just as overall consumer spending effects Apples cash flow. You could argue that in the brave new world of peak oil cheap oil will never happen again but I won't go there. At least Apple controls it's products selling price. But if you're talking really long term I suppose you have a pretty good argument. Shorter term I think you have better visibility to Apples cash flow.

To: ChrisGillette who wrote (122031)	11/16/2011 9:02:56 AM
From: slacker711	Read Replies (1) \| Respond to of 213172

Tech changes very rapidly, and consumers are not locked-in to Apple. This creates cash flow risk, as Apple's success depends entirely on its ability to crank out must-have products year after year. In contrast, a company like Microsoft provides a great example of lock-in: Apple does have some lock-in on their products. Certainly a Mac owner is very likely to buy Macs again in the future due to both the learning curve and existing software they will have bought. The same is less true for iPad's and iPhone's but both have a certain level of stickiness due to apps and content that can only be played on iOS. However, your broad point is true. The question is how much of that is priced into the market. They will grow earnings in excess of 90% YoY during the December quarter and will be trading at trailing PE of around 9 when you take out the cash. That growth will certainly slow substantially in 2012, but a 30% growth rate is certainly achievable. I think that it is patently obvious that if Apple had higher level of lock-in that they would have a much higher PE than they do now. So the question is, how much more of a discount do you think needs to be applied to Apple? A PE of 7? 6? less? Slacker

To: ChrisGillette who wrote (122031)	11/16/2011 10:33:58 AM
From: rnsmth	1 Recommendation Respond to of 213172

<<Tech changes very rapidly, and consumers are not locked-in to Apple. This creates cash flow risk, as Apple's success depends entirely on its ability to crank out must-have products year after year.>> I suggest you become familiar with customer satisfaction data and with survey data regarding the buying plans of people who currently own products from various platforms. Once you do that, take a good look at recent strategic product introductions from Apple, including iCloud, Siri, and the music match thing in iCloud. If you had done so in advance of your post, you would likely not have made that statement. Go a little deeper.

To: ChrisGillette who wrote (122031)	11/16/2011 11:25:24 AM
From: Doren	Respond to of 213172

> Are ROA and ROE the appropriate metrics? Umm... The mind of the investor is the appropriate metric. It seems to me that the potential for expansion is a pretty big deal for most investors. The risk vs potential expansion of the business. Of course there are some who are content to collect dividends. You can probably make a little more than a USA bond with Exxon and there is the potential for the stock price to appreciate a little. Very little risk. A little more risk with Apple. But HUGE potential to increase sales. As I said China could double Apple's existing markets in the US and Europe. India too. Apple's risks are, IMHO, WAY overstated and come from traditional thinking that Apple will never surpass Microsoft. Apple is not going away for a long LONG time. Just as Microsoft and IBM are not going away. Very few companies have the brains to make an operating system. No one except insiders knows what new products Apple will release. They've virtually destroyed cameras, music players. They pretty much destroyed the dumb phone markets. They are killing much of the laptop market. They are selling more PCs than ever. And most here think they are poised to disrupt the TV market. The auto industry is integrating computers/smart phones into its offerings too. Exxon on the other hand is not poised to grow at all. I think if you look at it GOOG and AMZN are much riskier propositions. GOOG depends on ubiquity. Their search business IMHO is poorly... *terribly* incompetently managed and lagging. AMZN would be totally vulnerable if Ebay had good managment, and AMZN's profit margin is razor sharp. So I guess its your point of view. For myself I'm risking more profits at this time, but for some time I have been looking to find and exit point. So far I haven't seen one that would not be painful to my sense of greed.