Unfairly Punished Apple Still Fresh
Apple Inc. stock (AAPL)
is starting to look attractive. The share price has come down
significantly, valuation is more appealing, international Mac sales are
accelerating, iPod sales remain strong, and the iPhone presents a
significant growth opportunity.
Apple currently trades at around
27 times 2008 earnings estimates, which is well within their historical
range of 23 to 39 times, and down significantly from the beginning of
the year (Apple's stock price is down around 30% year-to-date while the
Nasdaq is down less than 15%).
Apple's recent decline is largely due to
lower-than-expected earnings guidance from
management at their last conference call, and the general fear that a
slowing economy will reduce spending on luxury items such as iPods and
iPhones. Also interesting to note, Apple historically underperforms the
market during the first half of the calendar year. Further, Apple was
trading at a hefty premium and, in my opinion, was due for a correction.
International
sales of Mac notebooks and desktops have been accelerating. In 2007,
Mac grew unit sales by 45% in Europe, 60% in Asia-Pacific, and 30% in
Japan. While Apple still generates 60% of total sales in the Americas,
the non-traditional geographies accelerating growth is an encouraging
sign (for reference, Apple generates about half its total revenue from
Macintosh notebooks/desktops and half from iPod/iTunes).
Besides
growing Mac notebook/desktop sales, Apple has other growth
opportunities. Most notably, iPhones are expected to begin contributing
significantly to Apple's revenues in fiscal year 2008 (iPhone sales
should be around 6% of total revenues). Additionally, Apple's SDK and
third party applications will add functionality to the iPhone and
create more awareness and demand. Also, the maturing iPod industry will
continue to generate strong revenues via higher-end iPods, replacement
iPods, and video capability (80% of new iPod sales in fiscal year 2007
had video capabilities). Further, Apple has big plans for "AppleTV."
Overall,
I believe investors have unfairly punished Apple due to lower than
expected management earnings guidance and a jittery stock market. Apple
historically provides conservative earnings guidance (they crushed
analyst expectations every quarter last year), and they are still
forecasting a sharp increase in revenue growth. It's surprising to me
that Apple's stock has fallen as far as it has.
Disclosure: I do not own shares in Apple.
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This article has 20 comments:
- Webster
- 23 Comments
Mar 30 01:28 AM"Who Patches Bugs Faster, Apple or Microsoft?" Oh it's NOT Apple HACK! news.yahoo.com/s/pcwor...;_ylt=AoHI5suij1lpAib1...
ANd how about this headline Apple HACK? - "Mac is the first to fall in Pwn2Own hack contest" yeah, that's right! Apple OS X was EASIER TO HACK INTO than Vista or Linux!!
This too - "MacBook Air hacked in security contest" .... guess the MacBook Air is so thin that you can hack through it the EASIEST!
" MacBook Air Hacked In Two Minutes" Oh boy, Mac made for stupid people and so stupid Hackers get in in TWO MINUTES!! - news.yahoo.com/s/cmp/2...
Oh wait, here's the best headline Apple HACK - "Security flaws found in Safari for Windows!" THE SHAME THAT APPLE IS SECURE IS BLOWN!! www.theinquirer.net/gb...
So nice PIMP article for Apple, how big was the "gift" they sent you?? The phonyness that is Apple is being exposed little by little and you media and anal ysts would be able to cover up for your sugar daddy in Cupertino any more.
- Camden
- 67 Comments
Mar 30 02:56 AM-----------
I think Webster must have stopped taking his meds. Sad.
- mjn185
- 11 Comments
Mar 30 07:14 AMAs far as this article goes: Thank you sir for writing a wonderful article based on true analysis of historic figures. It is refreshing to see someone take their job seriously and not just opine about things way beyond their ability to quantify. I look forward to reading more articles from you on some other stocks.
- mjn185
- 11 Comments
Mar 30 07:26 AM“Nobody was able to hack into the systems on the **first day** of the contest when contestants were only allowed to attack the computers over the network, but on Thursday, the rules were relaxed so that attackers could direct contest organizers using the computers to do things like visit Web sites or open e-mail messages…”
(news.yahoo.com/s/infow...)
The article portrays a scene where the MacBook Air was penetrated in the *first* 120, when in fact it lasted the whole first day– an automatic, over the network penetration belays more devastating vulnerabilities in an OS vice tricking users. Besides, all virii/trojans/exploits reported so far are the kind that rely on social engineering to get an OS X user to install– more of a trojan horse rather than OS weak point. Whether the hacker’s technique was different or not from this vector is not revealed by this or any article covering CanSecWest.
- fauxscot
- 9 Comments
Mar 30 08:11 AMCan you dispute a single thing in this article? Can you do it without name calling?
Why so much energy devoted to the effort to pound down this article's contentions that all relate to business issues?
FWIW, I am a PC users whose spouse owns/uses Macs. I am in a damned good position to see who spends more time frustrated with the computer, and it's not she. Still, fundamentally, none of that has anything to do with this article, which just deals with stock valutation, growth potential, historical performance, etc.
The vigor, irrelevance, and name calling in your post presents a poor public image and if there is any worthwhile content in the post, not many people are going to consider it credible. It appears YOU have some sort of agenda, as opposed to the article's author.
You may want to consider that when you spend that much time assembling a post.
- Oracle
- 4 Comments
Mar 30 08:35 AMI am the CEO of a telecom company that supports all platforms. making comparisons like the one webster made is like someone who only speaks English trashing Spanish.
Mac OS X (and Linux for that matter) is far superior to Windows in virtually every measure. But more than this, business wise, Apple has hit two or three "home runs" in the last few years (iPod, iPhone, OS X, iTunes).
Microsoft compared with Zune, Windows Mobile, Vista, and Zune Marketplace. In less than one year the iPhone alone has more Marketshare than all Windows Mobile Devices.
Webster's "post" wasn't about tech and it wasn't about business. It was about nightmares. Microsoft's
- samij
- 108 Comments
Mar 30 09:04 AMfurther, apple seems to have significant difficulties in achieving even the stated iphone goals (not to mention that we all know that apple gives conservative forecasts and is therefore expected to beat those easily).
10m 2008 doesn't seem feasible without significant price cuts on both the device and on the plans abroad, both of which have impact on apples profits. not to mention that apple needs to add functionality and update the existing features to keep anyone interested (3g, gps, 5mpix focusing camera, front facing camera etc).
- tom1234
- 174 Comments
Mar 30 09:15 AM- JB Money
- 7 Comments
My Website
Mar 30 10:04 AM- pjdecor
- 1 Comment
Mar 30 10:55 AM- sbjforever
- 23 Comments
Mar 30 11:13 AM- BobR
- 1 Comment
Mar 30 11:55 AM- europeaninvest
- 113 Comments
Mar 30 04:35 PM- Jake2
- 231 Comments
My Website
Mar 30 05:14 PM- groovyd
- 3 Comments
My Website
Mar 30 05:21 PMNot to say it is a good idea, but imagine what would happen if they started pricing Macs like Dells... or selling just their OS to companies like Dell to install on their machines...
- mathue
- 4 Comments
Mar 30 07:49 PMSeriously, you need to have attended the cracking (yes, CRACKING, not hacking) contests of the 80's, where you had to break in and control a machine in another room via dialup. Installing an app on a computer by asking someone to install it isn't in the same league. I'll wait to point fingers 'tilI I find out just how the exploit is done. I refuse to drink in the current 'security' Cool Aid that the only secure machine is one that's not powered on. Driving to work is WAY more dangerous yet we do so without even a wince. Lets get some sense of scale here.
- brewer
- 382 Comments
Mar 30 11:31 PMIt's pathetic, really. But if it makes you feel better about your platform of choice, that's fine. Just realize that Windows is going down fast.
Mac OS X is a far better platform, and always has been. This is why Microsoft copied Mac, right down to the very keystroke and menu commands. That is also pathetic.
- EvanA
- 2 Comments
Mar 31 04:20 AMI've worked on PC's for years, switched to a MAC and was blown away with it. It just works, I"m not trying to be a fanboy, but they do just run better.
As for Apple's upcoming performance, early indications are that they've been selling out of the MBA's and that they took 16% of the US PC market in February.
- mike sanders
- 8 Comments
Mar 31 06:02 AM- Webster
- 23 Comments
Apr 02 07:13 PMShows how much you now about the stock market apparently. If I had "shorted" AAPL when it was at $200 (which I did) to say a $130 fall (which it fell far below), I would be a WINNER (which I was) with a big cash bingo (which I now have after I cashed out) .... you MORON. Go study how the market works when you "short", dope!
Ps. The MacBook Air WAS STILL HACKED FIRST, irregardless of your stupid quote ... you double MORON! Jesus, no wonder you moron AppleFUDs need Macs ... you ARE stupid.