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"Hubba, hubba, hubba! Money, money, money! Who do you trust?"  (Source: Warner Bros. Pictures)
Apple is now worth more than Microsoft and Google combined

While Apple has been in the news lately for allegations of unfair labor practices at its contracted manufacturing facilities in China, that hasn't stopped the company from increasing value for its shareholders and sending it surging ahead in market capitalization.
 
Today, AAPL crossed the $500/share mark for the first time in its history this morning. The stock has surged over 17 percent in the weeks following its blowout fiscal Q1 2012 earnings report. The company reported revenue of $46.33B USD and net profit of a whopping $13.06B. In addition, the company sold a record 37 million iPhones during the quarter.


Apple is currently ranked as the largest company in the world by market cap. In addition, Apple's market cap is currently more than both Google and Microsoft combined.
 
Following Steve Jobs' resignation as CEO in August 2011, AAPL hit a [then] all-time high of $411 pushing it ahead of Exxon Mobile as the world's largest company by market cap.

Source: Bloomberg



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RE: Highly Overvalued
By TakinYourPoints on 2/13/2012 7:35:46 PM , Rating: 2
Overvalued based on what metric?

Apple's PE and PEG ratios are surprisingly low for a tech, especially one that has continuously doubled their gross revenue year-over-year.

Apple's price to earnings is in line with "mature" techs like Microsoft, Oracle, and IBM. Their price is driven by revenue. Google is a high flier in comparison, and AMZN is grossly overvalued with a PE of about 140.

Investor fear of a company so large that continues to grow so quickly is the only thing that has kept AAPL's price where it is. If rapid growth was taken into account, even with a modest 20 PE such as Google's, it would be priced closer to $700 a share (oh lord).

It won't happen though, and their price will continue to be driven by actual revenue and profit rather than lofty expectations/dreams of growth.


RE: Highly Overvalued
By Reclaimer77 on 2/13/2012 9:06:48 PM , Rating: 1
quote:
Overvalued based on what metric?


Apple being "worth" more than ExxonMobile? That's all the metric you need. Of course Apple is overvalued. Only an iTard like you would suggest otherwise.

To be fair tech stocks in general are overvalued because they are too consumer driven, so you're just one bad mistake away from disaster. Remember when Netflix saw it's stock drop 70% in just one MONTH, from one controversial management decision? How could a stock valued at $300 fall that much in one month from just one decision that wasn't even drastic? Without any fundamental changes to the companies future profitability or outlook?

Companies within the tech industry are being incorrectly valued, and we're heading for another tech bubble. Investors have unrealistic expectations and too many people are playing the short game.

quote:
It won't happen though, and their price will continue to be driven by actual revenue and profit rather than lofty expectations/dreams of growth.


That's patently false. Apple cannot keep growing forever at the rate investors expect, at some point market saturation will be reached or a bad decision will lead to a poor quarter etc etc. When that happens, investors will get weary. There is already a considerable debate by insiders as to weather Apple is a growth or value stock. The fact that they're sitting on tons of capital, and refuse to pay dividends, is holding some sway on that debate.


RE: Highly Overvalued
By TakinYourPoints on 2/13/2012 9:52:48 PM , Rating: 5
quote:
Apple being "worth" more than ExxonMobile? That's all the metric you need. Of course Apple is overvalued. Only an iTard like you would suggest otherwise.


Stock value is a product of expected growth combined with revenue and profit. Apple is valued the way it is because they make a lot of money.

Saying that Apple doesn't "deserve" its valuation because electronics aren't as essential as oil, as you infer, is asinine. Why not apply the same logic to food production? I need food a hell of a lot more than I need any of the above.

quote:
Companies within the tech industry are being incorrectly valued, and we're heading for another tech bubble.


Based on what logic? Logic, not personal opinions. Big techs like Apple, Microsoft, IBM, and Oracle are priced the way they are because of the amount of money they make. This isn't the tech bubble era of +100x price multiples, these are conservative prices by any measure of a large cap. If their prices tank, it will be along with the rest of the market.

There are exceptions of course. Amazon for example is priced in the stratosphere right now. They are the one I'd be most worried about at the moment, when investors finally give up on them making the revenue to fulfill their expectations.

The other companies mentioned don't have anything to live up to, they are priced based on their revenue. Again, based on doubling their price year over year, Apple is very fairly priced given that they have a similar price-to-earnings value as companies that are static and pay a dividend.

It is a growth stock being priced as a mature one.

quote:
That's patently false. Apple cannot keep growing forever at the rate investors expect, at some point market saturation will be reached or a bad decision will lead to a poor quarter etc etc. When that happens, investors will get weary. There is already a considerable debate by insiders as to weather Apple is a growth or value stock. The fact that they're sitting on tons of capital, and refuse to pay dividends, is holding some sway on that debate.


Right, and this is a huge reason why Apple's PE is as low as it is. It isn't being priced as a growth stock, that's the whole point. It is priced very conservatively with a price-to-earnings ratio similar to stagnant companies that pay out a dividend. If Apple was priced as a growth stock, even conservatively, it would be worth more than it is now. A moderate 20 PE of Google's would put it over $700, which is insane.

Companies like Microsoft, IBM, and Oracle are sitting at about the same PE ratios as Apple. IBM is the only other company that is also showing any significant growth in revenue, and yet it is being valued conservatively at around a 14 PE. Investors are being very careful not to overvalue any of these techs.

I've said it again and again, but you should really start using hard numbers and logic to create arguments rather than basing them on rhetoric and emotion.


RE: Highly Overvalued
By Reclaimer77 on 2/13/12, Rating: 0
RE: Highly Overvalued
By TakinYourPoints on 2/14/2012 7:31:32 AM , Rating: 3
There are many ways to value a stock. PE matters here because actual revenue is the main thing driving AAPL's stock price, not speculation on future growth.

I didn't address your Netflix example because it was stupid. I'll educate you though.

Netflix's price is driven by the same thing that is currently driving Amazon's and other high fliers: speculation on future growth. Unlike Apple, its revenue and income do not justify the stock price by the same measure as a well established large cap. Netflix was trading at a price to earnings multiple of nearly 100 before the stock tanked.

Netflix's price wasn't based on income, it was based mainly on potential for future income.

Stocks like this are much more vulnerable to rumors because so much of the price is based mainly on speculation. If Apple gets some sort of negative rumor, it doesn't hit it as hard. Why? Because it has no real material impact on their ability to make earnings that is a factor in its current price.

Let's look at the most negative news imaginable. People like you were saying that Steve Jobs' resignation and death would result in the stock tanking. Anyone bearish on the company would have said "$350 to $200, minimum" yet the day after his death the stock remained in the same trading range. A few months later and they are making more money than any tech on the planet, hence its stock price. Simple.

The same applies to companies like Microsoft or IBM. These are solid solid companies. Outside of global economic catastrophe, you're looking potential for daily drops of 3%-5% at the most, and over time you're looking at maybe 20% corrections, but that is completely standard based on market cycles.

Right now the main thing that can negatively drive the price of a company like Apple or Microsoft is panic over the broad economy and widespread selloffs, something like another market crash. Of course, that should be seen as a buying opportunity like the one we had in 2009.

Back to Netflix, what happened to them is entirely different because the company was priced very differently. If you applied the same price multiple to Netflix as you do to Apple, Microsoft, or IBM, its price would plummet again from its current price of 118 to about 40, or almost 1/10th of its all-time high.

Even with its value cut so much, it is still priced like a growth stock. Apple isn't, it is very conservatively priced based on its income.

quote:
Are tech stocks routinely overvalued in general? Sometimes yes. This is one such period.


Again, you use no real argument to back this up, aside from "it is overvalued because I say so".

The market is long overdue for a correction, but large cap tech in general is priced very fairly based on their income. When a big drop happens, it will be an opportunity to buy.

Anyway, people have been saying that Apple is overvalued for almost a decade now, and they give no real reason aside from "because Apple hurr durr", yet their income keeps increasing and the price keeps going up. At some point they will find a ceiling (whenever smartphones and tablets reach saturation), but nobody knows when that will be. I expect that they will be paying a dividend by then.

I've beaten you with logic in every single argument we've had, technical and otherwise. Your personal reality distortion field is pretty funny if you think you've brought anything to an argument aside from complete lack of knowledge backed by personal rhetoric and emotion.


RE: Highly Overvalued
By Reclaimer77 on 2/14/2012 8:18:19 AM , Rating: 2
quote:
I've beaten you with logic in every single argument we've had, technical and otherwise.


WOW you really ARE channeling Steve Jobs aren't you? Amazing someone with such a big head can still cram it up his own ass.

quote:
There are many ways to value a stock. PE matters here because actual revenue is the main thing driving AAPL's stock price, not speculation on future growth.


And when we compare free cash flow to enterprise value, we see that Apple is slightly overvalued. But let's not use that metric, let's just use the ones that favor your argument.

quote:
Anyway, people have been saying that Apple is overvalued for almost a decade now, and they give no real reason aside from "because Apple hurr durr"


And they have all always been wrong every time because you didn't agree. What an ego!

Secondly, this is mostly opinion anyway. There is no solid metric to determine undervalue or overvalue. I've backed up my opinion, and so have others if you would Google, that Apple is overvalued. End of discussion.

Takin we all know you're incapable of being unbiased when it comes to Apple. This is the same old song and dance.


RE: Highly Overvalued
By TakinYourPoints on 2/16/2012 12:13:37 AM , Rating: 2
quote:
WOW you really ARE channeling Steve Jobs aren't you? Amazing someone with such a big head can still cram it up his own ass.


I drop real knowledge on you and the most you can do is call people fanboy. Open up your mind and you might learn something and stop relying on personal opinion backed by nothing.

quote:
And they have all always been wrong every time because you didn't agree. What an ego!


They were wrong because reality proved them wrong. I have no such power over the way the world works.

quote:
Secondly, this is mostly opinion anyway. There is no solid metric to determine undervalue or overvalue.


Over the long term, yes there are. Price to earnings is a widely used metric, seriously, and right now Apple's price to earnings ratio is actually below the historical average of the S&P 500, yet according to you it is overvalued!

My ego has little to do with anything, I just go by facts and reality. You on the other hand think that reality should follow your opinion and intuition. If someone doesn't agree with your intuition, you call them a fanboy.

Ridiculous.


RE: Highly Overvalued
By TakinYourPoints on 2/16/2012 12:18:09 AM , Rating: 2
Finally, I know that you and Moto like to use upvotes/downvotes to judge value. I don't for the most part given that much of this forum is an Android circlejerk and the hivemind supports that.

Even then, My posts in this discussion are 4s and 5s. You don't know what you're talking about in general, but at least here it is abundantly clear to everyone that you are way out of your element.


RE: Highly Overvalued
By TakinYourPoints on 2/14/2012 7:34:29 AM , Rating: 3
Also, this is annoying:

You:
quote:
That's patently false. Apple cannot keep growing forever at the rate investors expect


Me:
quote:
Right, and this is a huge reason why Apple's PE is as low as it is. It isn't being priced as a growth stock, that's the whole point. It is priced very conservatively with a price-to-earnings ratio similar to stagnant companies that pay out a dividend. If Apple was priced as a growth stock, even conservatively, it would be worth more than it is now. A moderate 20 PE of Google's would put it over $700, which is insane.


I explain over and over that Apple is being priced the similarly to stable divvy stocks like Microsoft and it flies right over your head. Unreal.


"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive














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