Are you kicking yourself for not selling your APPL stock?

For those of you lucky (or smart?) enough to have some that is. I don’t so it doesn’t really matter what I think. It was at a high of what, $715? now it’s down to around $430 I think. That’s a pretty significant drop.
I have no doubt it will go up again whenever the next iteration of iPhone or iPad comes out but I’m wondering if we’re seeing a re-evaluation of the actual worth of the stock. Was $700+ mainly hype? Was it over-valued? Is this a direct result of something Android has done or are there other factors controlling it? It sure would have been nice to sell all of the stock at $700 and then buy back even more at $430. :)

Theres a alternate universe where Steve Jobs did not died, and he managed to make Japan love PC computers (Mac computers). And now appl stock is $600.

But you are stuck on this universe, and this universe sucks.

This has been hashed to death in the business media, and the general consensus is that the performance of AAPL and the performance of the company itself have pretty much nothing to do with each other. There’s not a single thing Apple could do right now that wouldn’t be deemed bad news by the market and market media. Trillion dollar quarter? They’d just say that AAPL had hit its peak and could only decline, etc.

I think you’ll see AAPL go back up to $600 or so and hang out there for a while.

The value of Apple stock was, at least in part, based on its talent to only increase in value. Which it did, for years. That leads to a bubble - as long as everyone keeps buying, and analysts keep claiming that it will reach $1000 by [random date]. Of course you’ll buy the $700 stock, if it’s guaranteed to give a 40% profit!

Even so, apparently people stopped buying at $700. And, given that the stock is currently losing value in response to reports of record profits over the last quarter, I guess that the stock is still valued on the company’s promise of eternal growth. There’s still air in that balloon.

If you want to gamble, buy the stocks the moment the next Apple event is announced / rumored; sell off the moment the event ends (if they just announce incremental updates), a day later (if the hype is strong), or never (if they have something innovative).

Also, what Teiman said.

I don’t think a lot of people here own shares in Appell Pete Corporation. AAPL, on the other hand, I think is nicely priced at $439 (price as of this morning). Not because I like Apple (I don’t) or gush over their future prospects, but because 8x Free Cash Flow is a good price for a company unless it’s contracting, and their Return on Invested Capital is excellent (~35%).

My main issue with calculating AAPL’s intrinsic value right now is that they’re so large. Applying my usual assumptions about growth given ROIC and past performance has them owning the entire US in a few years. When a company gets to the $100 billion+ valuation range, I think it’s best to purchase based on today’s numbers, rather than trying to factor in company growth (though you still have to watch for dwindling companies like Philip Morris / Altira). I usually like more margin of safety, but 12% return isn’t bad if you think they’re going to maintain present profits for a while.

It’s not. If you’re going to invest in stocks, you should reflexively check the numbers before making blanket statements about valuation. You don’t have to do a DCF, just take a glance at that crudest of measures, P/E. For AAPL, it’s just shy of 10 right now. That’s not a company “still valued on the company’s promise of eternal growth.”

Over rated. A bubble was formed around it, as previously explained.

People thought that somehow Apple would continue their ever increasing profits, without no regards at things like competition eventually catching up, or thinking they would always get the new successful idea/product because they got several in a row (ipod, iphone, ipad).

Apple stock was nicely priced back in '97, where I believe it was at $21. I told my Dad to buy some and he didn’t, and neither did I. Talk about kicking yourself.

My feeling is that it was successfully talked down by shorters, but now that the conversation includes the possibility of growth slowing down, it will only recover slowly.

I think the $700 value was largely hype. Apple is a great company that has, over the last decade plus, had a number of break-out products. The fluctuations in stock prices around the release of various products reflects, to me, the hype of the products much more than any sort of change in the real value of the company.

If and when they introduce another break out product (their last one being the iPad), I suspect their stock will soar again. In the meantime, however, the stock seems to simply be undergoing the necessary/normal adjustment.

Apple actually had a pretty bad quarter last, and their only “successful” product launch (imo) was the iPad Mini, built on last gen parts. The Retina 15" launched late and in small quantities; the 13" launched way late and was overpriced (even by Apple standards); the iPhone 5 was underwhelming and broke resolution compatibility; the iMac launched months late and is still in low stock. Their decision to push their cutting edge manufacturing beyond the capacity of suppliers shows a change in their leadership ability. And their inability to squash Samsung shows the limits of their market dominance. I also think Apple is stuck by the fact that their products are already so good (relative to the market) that they don’t have a clear vision of what to improve.

I don’t think people care who makes their Android devices and Samsung’s success is a temporary thing left to the fickle consumer market (see the rise and fall of HTC), and still lacks much brand cachet or loyalty. What Samsung represents is the existential crisis of an Asian manufacturer of Apple parts using their facilities and expertise gained by the relationship to turn on Apple and try to overthrow them.

Gus’s reply was excellent.

One piece he didn’t talk about was margins. AAPL’s margins have been contracting since the the iPhone 3. This is how Wall Street determines how valuable your technology (relatitive to you competitors), and by this metric AAPL’s technology (largely iOS) simply isn’t ahead of the competition anymore, this means that it’s ability to maintain its current earnings is in question.

The one bright spot for AAPL is tablets. They are destroying the competition in this area and they are becoming a larger and larger portion of their earnings, if you believe that this will continue then buying the stock would be the play.

Back in 2008, when AAPL had dropped to $95, I was kicking myself for not selling a year earlier when it hit $200. Determined not to lose any more money, I decided to sell off a bunch at $95. Over the next year, it went back up to $200, and after that it just kept going up.

So no, I’m not kicking myself for not selling back at $700. In fact, I would buy even more if I had the spare cash. I think the fears are incredibly overblown. Apple had, what, the fourth-most-profitable quarter of any company, ever? They are selling 50 million iPhones a quarter, yet people seem to think that Samsung (or Microsoft!) is going to eat up their marketshare overnight. They still have a lower P/E ratio than most other high-tech companies, they have a huge marketshare and mindshare, and they have a comfortable profit margin that they can lower if they really need to win back marketshare as competitors close in. I don’t see what there is to worry about.

See, this is the “damned if you do, damned if you don’t” line of thinking that still surrounds Apple. If Apple has a low stock, it’s seen as a bad sign, not a sign that their products are so insanely popular that they can’t sell them quickly enough. Or people say that Apple’s prices are too high, and they need to come up with a lower-priced phone to compete with Samsung…but when their profit margins drop (even though they’re still at a boggling 38%, which is almost unthinkable for hardware), it’s seen as a bad sign.

I agree that basically Apple can’t do anything to please pundits at this point. I predict that Apple will just continue their long slow 2%-a-day creep upward, and soon they will be up at $700, and people will be talking about what a great buy they are once again.

But they … i mean, if you don’t actually have any product on hand for Christmas, that’s a huge fail. Imagine if Amazon announced two new Kindles but wasn’t able to deliver any of them until January, and even then, still had very limited supplies compared to demand. Apple announced 1m fewer Macs sold (of all types) in Q4; that’s like 1.5 BILLION in gross revenue lost. That would kill a lesser company but people expect Apple to shrug it off.

But like I said that’s more a management problem. Whatever you think if SJ he wouldn’t have allowed products that they couldn’t manufacture fast enough to fill the demand and miss the Christmas season. I mean imagine if Dell had announced that they “missed” Chistmas and had no laptops to sell until January, Wall Street would execute them on the spot.

Ignoring the fact that the PC market as a whole is shrinking, let’s follow your assumption that Apple sold 1m fewer Macs solely because they were unable to meet the demand. First of all, it’s a good sign that they still have such a high demand for their high-margin products. And yes, people should expect Apple to shrug off losing $1.5 billion in gross revenue! Their quarterly revenue was $54.5 billion, with a net profit of 13.1 billion. Compared to those numbers (which are, again, $8 billion higher than the year-ago quarter, or a 17% increase), $1.5 billion is really not that much.

And yes, if Dell lost $1.5 billion in revenue, of course their stock price would take a hit! In their previously-reported quarter, they made $13.7 billion in revenue (down from $15.5 billion in the previous-year quarter), and only $475 million in profits. Losing $1.5 billion would take them from a small profit to a bigger loss, whereas Apple has lots of other revenue taking up the slack, even though their Mac sales have dipped slightly.

I think the difference is that Wall Street has gotten used to Apple not just improving each quarter, but accelerating their rate of revenue. As soon as they failed to do that, the market trounced them, even though $54.5 billion in revenue is a huge amount.