“Apple Computer (AAPL) earnings forecast was raised by Bear Stearns to $2.25 a share from $2.10 due to evidence that hard drive-based iPod sales won’t see the normal seasonal weakness during the quarter ending March,” CBS MarketWatch reports.
“Synaptics (SYNA) , which makes the ‘click-wheel’ technology behind Apple Computer’s iPod music player, rose $5.94, or nearly 20 percent, to $36.07 after reporting better-than-expected results on Thursday. Synaptics also was confident about prospects for the current quarter due to increased sales in the digital music market,” CBS MarketWatch reports. “Apple (AAPL) also got a boost, rising 74 cents to $71.20. Before the bell, Bear Stearns analyst Andy Neff raised his price target on Apple to $97 a share from $87, due to strong reports from iPod component makers such as Synaptics.”
Full article here.
MacDailyNews Note: Apple is currently trading up $0.56 at $71.02.
MacDailyNews Take: Some of these “iPod Killer” also-ran companies are soon going be joining their failed “iTunes killer” cohorts up the iRiver without a paddle.
Stock values (from quotes.nasdaq.com)
Over the past month…
AAPL +12%
MSFT – 3%
DELL – 3%
NDAQ -11%
Over the past year…
AAPL +210%
MSFT – 10%
DELL + 15%
NDAQ -15%
thanx to our resident stock-watcher, Aryugaetu, for those numbers…
So.. would you consider AAPL as a “Buy”… “Hold” or a “Sell” right now ?
This is good news for Apple, for sure…
Someone should point the naysayers like Enderle, Thurrot, et. al… to these reports…
That is, of course, if anyone actually thought these bozos could understand what they mean !!
Gee… I wonder if Michael Dull thinks Apple is going down the tubes now ??
What about Synaptics? How do they look as a possible investment going forward?
For that matter, who is it again that makes the flash memory for the iPod shuffle? Wonder how they’re currently rated?
SGTL Sigmatel makes the flash.
“So.. would you consider AAPL as a ‘Buy’… ‘Hold’ or a ‘Sell’ right now”
I’d say AAPL is still a buy at $70. Here are the reasons:
1) At $70 a share, Apple’s market cap is about $28 billion. However, Apple has $6.4 billion in cash and short term investment, which means it’s “real” value on Wall Street is less than $22 billion. Would you buy AAPL now if you could get it for $55 a share?
With that much cash on, that’s what Apple is actually worth on the open market. Apple also seems to be throwing a $1 billion on the horde each quarter, too.
2) People talk about high P/E ratios, but they are usually talking about trailing P/E. Apple has a trailing P/E ratio of about 56 right now (in comparison, Dell is 33 and Microsoft is 35). So Apple’s P/E ratio looks high compared to other tech companies.
However, the problem with looking at Apple’s trailing P/E right now is that it factors in earnings from as much as a year ago, i.e. BEFORE the iPod started selling in the millions and Mac sales started growing by double digits again.
Look at Apple’s FORWARD P/E ratio, that is, what Apple’s P/E ratio is expected to be a year from now, and you’ll see that is only about 30 – making it a “cheaper” stock than Microsoft or Dell is today. And that’s if Apple simply meets expectation, not blow them away as it has done for many consecutive quarters.
In plain terms, Apple’s P/E ratio is expected to go from 56 to 30 in about a year, which means earnings (profits) are expected to increase a lot faster than the stock price. So a couple things can happen.
a) The stock price will increase along with earnings to keep the P/E ratio relatively high (50 or more)
b) The stock price will remain relatively steady as earnings increase, causing the P/E ratio to fall.
Generally, when a company experiences strong growth in both units shipped and revenue that exceeds expectations, investors will keep buying the stock, thus keeping the P/E ratio high. You think AAPL is expensive at $70 a share? Wait until January 2005, after Jobs announced Apple sold 15 million iPods for the year, 5 million Macs, and iTMS will selling at a rate of a billion songs a year.