A place for Apple traders and investors to share their best ideas.
To get things rolling, here are Motley Fool contributors Danny Vena and Jason Hall in a clip released Saturday answering the question “Could This $2.6 Trillion Company Still Have Room to Grow?”:
Below: Apple vs. the S&P 500 last week, normalized…
Disclosure: Although I am now an Apple shareholder (see Why I bought a share of Apple, my first), I am in no position to give trading advice. Don’t blame me if you drain your IRA doing something you read about here.
See also last week’s trading strategies.
Interestingly, Danny Vena and Jason Hall neither mentioned Apple Pay’s financial business and the room for this segment of Apple’s operations to grow, which it fast is doing. Little doubt if Apple comes forth with an Apple car that this opens a whole new industry segment for continued future growth. Apple already provides Apple Care for its products and that opens a whole new industry segment for Apple to offer insurance and maintenance free worry to consumers buying Apple Cars. Talk about one-stop shopping! I purchase my iCar, finance it through Apple Pay, select Apple Care maintenance for my new Apple car along with Apple insurance coverage. One knows these cars will be extremely safe and I suspect highly profitable for Apple to insure since few accidents likely will occur. And we haven’t even touched on the new revenue growth through the Apple Watch once its starts to provide comprehensive medical monitoring for doctors and insurance carriers needing real-time data resulting in increased medical cost efficiencies for that industry.
No Joe Kernen, Apple still has a long revenue growth runway ahead for years to come.
Adding a friendly reminder that Tim Cook said heath is the big thing,
no one knows if a company will grow
why tesla will grow? why snowflake will grow?
i prefer the certainty of cashflows and buybacks.
probability of future growth of cashflows is bigger when there is already a big stream of cash to start with.
without cash its difficult to grow.
unless you print and issue stock like Tesla and co.
but then you end up with less ownership as a shareholder
and a collapse of the stock if interest rates raise
i like the combination of growth and buybacks.
the multiple of aapl is high but maybe not in relation to all the money being printed.
this money printing was not there in 2000.
every government will collapse now with interest rates like in the eighties
so they have to keep on printing.
how much money the chinese government is printing we dont know.
when i started my company i could save for 4%.
was really nice extra profit for all the cash we made.
now i have to pay 0,5% for every 100k in the bank
so no one wants to hold cash because it cost you money
where to bring in the end?
in AAPL
“no one wants to hold cash because it cost you money
where to bring in the end?
in AAPL”
Yes! This isn’t rocket science; it’s logic 101…and the only rocket involved is Apple!
A rising stock price that is coincident with a shriveling valuation literally blares undervalued, for those with ears to hear. For those with money to invest wisely, AAPL is a no-brainer at any price up to a 40+ trailing P/E. How do we know? Because about a year and a half ago, Apple was AT a 40+ trailing P/E – and the price was substantially lower than it is right now, at a 28 trailing P/E.
“Joe: The market is almost always forward looking.”
Those who don’t study history are condemned to repeat it.
“I view the trailing earnings multiple as a coincidental outcome…”
Or – it’s breadcrumbs from the past mapping out the potential future. In this case, the trailing P/E is mapping out the same old pattern of undervaluation. Yes, AAPL’s at a higher multiple and the pattern’s less impactful, but all the forces are still there, including the talking heads who seem to have an anti-Apple agenda and who can whip the valuation from pillar to post on spurious information or twisted logic.
“Buybacks Bad!” Why? If it protects the long term investor, which the government says it prefers, how is that a negative? Because a small amount of government revenue on dividends is defrayed? Has anyone done a study on the positive impact of buybacks on taxes? Donna and I are certainly more able to spend because our net worth has increased, which has increased our tax bill. Is that taken into account?
Also, I contend that the positive impact of buybacks on long term investments can ONLY be seen by “looking back”. I can’t tell you how many arguments I’ve had with folks who contended buybacks wouldn’t impact valuation. P/E history says they’re wrong.
I see the future of Apple by looking back, Robert. And it’s a very bright future indeed.
(Each new aircraft is a multi-billion dollar endeavor for Boeing or Airbus, with a lot of that cost in the safety side. That book points out, though, how much the safety procedures were compromised by Boeing management when they tried to replace an engineering focus with a financial/delivery focus. Very depressing reading, all the more so because I was working on a big DoD program with Boeing as the prime and saw a lot of the same problems there.)
That means most of the people on the planet with money to spend, are in Apple’s ecosystem. More join every day, spending more, and so on.
Even without all rumored future products and services, AAPL is undervalued.
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You wouldn’t know it from the shriveling valuation but Apple grew revenue 33% and net income twice that over the last year.
‘Nuff said.
IMO, part of Apple 3.0’s purpose is to examine and discuss where Apple has been, where it is now, and where it is heading and provide context that’s from an investors’ viewpoint, a users’ viewpoint, and maybe just rank curiosity about how a huge multinational company survives, grows, and evolves. To that end, we as the forum give our responses and reactions to posts and in so doing, provide perspective to onlookers and potential subscribers.
Not every link, story, article, report, or “clickbait” that I and others forward to Philip make it into this blog, he curates its content carefully for a wide range of readers. Most of us who send stories think there may be some merit, interest, or connection to Apple that would be of some use to someone, and PED decides what gets published or aggregated by HIS blog. Occasionally we as individuals may call attention and post a link ourselves (once past moderation) we wish to share. If some content isn’t particularly interesting, that comes with the territory, IMO. Not everyone who come to Apple 3.0 is a seasoned investor.
Didn’t that say that at the $1T mark?
…or even the $1B mark.