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Hedge Funder Lee Cooperman Takes 'Modest Position' in Apple, Drives Stock Price Over $500
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How about you guys quit complaining and either take advantage of the movement if you think it's so predictable or buy a different stock? Or just stay away from the stock market if you don't like it.
Okay, I did simplify my example. Clearly there is a lot more that goes into an investment decision than P-E. But there is nothing wrong with the fundumentals for Apple and it is clear that based on all their numbers they were undervalued. You state that they had three quarters of slowing growth in an earlier post, but that is not the same as declining revenue. Apple still turns a significant profit and still continue to grow at what can be considered a healthy pace for a company their size. And they are flush with cash. Really unless you are an "apple is doomed" type, there is little in terms of the published numbers to suggest that the stock price is overvalued in anyway.
You might argue that it's fair market, but given their numbers I think that Ichan statements make sense. The facts speak for them selves on this point. Our opinions on the other hand need some help
Revenue doesn't mean a thing, only earnings in the end are meaningful. On that front, Apple posted three successive quarters of Y/Y declining earnings -- not slowing growth, but negative growth. This is why the stock declined. As far as being fairly valued, the markets decide what is a fair valuation for a stock on every second of every trading day, and it is entirely based on the anticipation of future earnings per share. If you listen to what Icahn said, it is that a continued (or accelerated) stock buyback and new products will push up EPS -- and that is what in his mind made AAPL a buy, not some arbitrary reading of a stock metric.
Cash on hand has little/nothing to do with valuation, nor does "Apple is doomed" and all of the other pseudo-analysis you can read on these pages on a daily basis.
At this point I don't know if people are being serious.
http://stockcharts.com/freecharts/historical/djia1900.html
I will agree to disagree with you on the earnings is the only meaningful thing. However, I will tell you a story. A friend of mine that I grew up with decided to start a tech company, it was during the tech bubble and he was doing great - mosty providing consulting services. He decided to take the next step and create software to sell to companies. Unfortunately that was right as the bubble burst. He had gone public and had one of the best IPOs in history. But his product did not sell, and the company tanked. Here it gets silly, becasue he trie to sell the company and no one wanted to buy it because the earning were so bad. He ended buying the company himself for I think 63million. What is funny is that the company still had 95million in the bank from the IPO. so he gained 30million just by buying the company. If anyone would have looked beyond the earnings they would have bought this taken the money and closed the company down (which is what he did). So earnings is not everything. By the way, my friend is Nelson Carbonell and this is a true story that you can research if you like.
Companies often trade below book value (sometimes even below cash value) because investors are concerned that the management will burn through its cash clinging to an outdated/ineffective business model rather than distribute the cash to shareholders. Glad it worked out for your friend but there were other options people were scared of.
I'm going to be obnoxious here and say that earnings don't mean a thing. Cash flows do.
Sorry. Way too much classical finance. I had to.
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Oh God. Some of the most dangerous words in all of investing.
Anecdotes are the enemy of solid investing principles.
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I, personally, sold my triple-digit number of shares yesterday. It's not that I don't think it won't continue to go up. It's that at this price point, I can identify better places to put my money.
Okay, I will certainly accept that cash and assets also mean something -- if you buy or own the entire company. To common stock shareholders they are both basically meaningless, unless the company uses cash to increase stockholder value (buybacks or dividends). Otherwise that cash might as well be on the moon.
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I'm going to be obnoxious here and say that earnings don't mean a thing. Cash flows do.
Sorry. Way too much classical finance. I had to.
You didn't have to, you wanted to.
apples performance outshines its stock price -- they suck up the lions share of profit in mobile and PCs. incredibly profitable. profit is the air companies breathe and the measure of their performance.
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yeah I bet he threw a dart when deciding where to spend his billion. no big thang, right?
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agreed. these schoolboys are so clueless.
The opinions of the unwashed masses must be so depressing
more like the ignorant.
The point was to illustrate that equities have a long-term positive return expectation despite the appearance of being rigged or pure gambling to novices.
I get it, and I agree -- but the DJIA would not have been my first choice to illustrate this point. Probably would have gone with this one:
http://stockcharts.com/freecharts/historical/spx1960.html
A bias towards a more broad, capital value basis. Not that the results are very different.
What's the exchange rate for bones/dollars?
Pimping, btw, isn't just about prostitution.
The stock market these days is nothing more than a mechanism for wealth redistribution from middle class to upper class.
I don't agree. If you are carful and plan for the long term you can make some money in the market. You don't need to be rich. If you are rich enough to buy Apple stuffs, you should be able to start a small portfolio and grow it.
I did it since I was in high school working as a busboy, today I'm very comfortable and the stock market helped a lot.
Sorry, that not what most people on this forum wants to hear.