AAPL share price hits above $700
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anon-011q
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PostPosted: Mon, Sep 17 2012, 5:44 pm EDT    Post subject: AAPL share price hits above $700 Reply with quote

I have had good luck with this stock and plan to buy more shares soon.

If you think I am crazy, just consider the following data from NASDAQ:

Apple's PEG ratio is 0.68.
Google's is 1.18.
Facebook's is 7.64 (very expensive).

http://www.nasdaq.com/symbol/aapl/peg-ratio

Points I consider:

1. iPhone will continue dominating the high-margin smartphone market.
2. The iPad mini will arrive in October.
3. Any businesses related to PC/Laptop (HP, Dell, Intel, etc.) are crushed by Apple's iPhone, iPad, and iPod Touch.
4. RIM and Nokia are dying brands.
5. The most credible competitor Samsung was found guilty of copying Apple's inventions.
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anon-97on
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PostPosted: Mon, Sep 17 2012, 7:40 pm EDT    Post subject: Re: AAPL share price hits above $700 Reply with quote

anon-011q wrote:
I have had good luck with this stock and plan to buy more shares soon.

If you think I am crazy, just consider the following data from NASDAQ:

Apple's PEG ratio is 0.68.
Google's is 1.18.
Facebook's is 7.64 (very expensive).

http://www.nasdaq.com/symbol/aapl/peg-ratio

Points I consider:

1. iPhone will continue dominating the high-margin smartphone market.
2. The iPad mini will arrive in October.
3. Any businesses related to PC/Laptop (HP, Dell, Intel, etc.) are crushed by Apple's iPhone, iPad, and iPod Touch.
4. RIM and Nokia are dying brands.
5. The most credible competitor Samsung was found guilty of copying Apple's inventions.



I have Apple shares too and am happy with it.

But some of your points are a stretch in terms of market value or are subjective. You’re comparing the PEG to pure online Internet companies when Apple is a consumer product company.

- Physical product companies historically have much lower ratios than online companies.

- Of your 5 points, 2 is indisputable and 4 I agree with even if it is subjective. Very unlikely either company survive as stand-alone companies. Someone will buy RIM’s brand and assets and in 3-4 years there will trace of the former brand. Nokia will be kept on life support or outright acquired by Microsoft.

- Point 1 is somewhat true. The iPhone will likely continue to be the best selling smart phone on the market for some time. But “dominate” is relative. It’s actual marketshare already is and will continue to decline against Android. Right now the only reason the marketshare has not appeared to decline more is that Apple has held roughly even against declines from RIM and Microsoft. But Android has grown faster and will continue to, eventually eating into substantial Apple share. This is already happening in the rest of the world outside the US. The reason Apple appears dominant is when charts compare smart phone hardware manufactures, since Apple has one product versus many manufactures making up Android’s share. Don’t get me wrong – I would still rather own stock in the company that has the most profitable phone than the company that has marketshare by giving away a fractured OS free to every manufacture. But dominate is too strong a word, as is the suggestion its trending positively.

- There is now some evidence that the iPad and tablets are eating into PC sales, so point 3 is somewhat true. And those hardware companies haven’t been high growth for years, well before the iPad. But I wouldn’t ruel them out. All the big ones are diversified companies making a lot of products, not just PC’s. Printers are far more profitable for HP than computers.

- There is zero evidence the US court ruling had any basis in Apple market value or will in the future. Plus it’s just one many court rulings. Apple lost a similar case in Korea that ruled in Samsung’s favor (no surprise, but one could argue the same about Apple winning in the US) and the court basically ruled as a draw in Europe (probably the most fair, non-partial ruling). And the ruling was for a very narrow range of devices. Samsung has since counter-sued on other aspects that are in the new iPhone and has a good case. Apple was silly to pursue the case because they are trying to get patent enforcement on things like UI that will come back to bite them. It’s a good example of picking a fight and winning a battle but probably losing the war. I suspect the only reason they pursued it was because Jobs was so pissed off at Google (they couldn’t directly sue Google since they give the software away so they only went after Samsung because they have the most popular Android phones and there’s real profits to go after). Until they did, Samsung was one of the largest and most reliable parts providers. They screwed that relationship and have opened themselves up to patent wars with every possible competitor (including Google who has since spent a few billions acquiring mobile patents). If anything, I would rank this as negative on the long term Apple stock price outlook, but I’m still a buyer because of their overall health despite this knucklehead move.
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