“Apple is hardly an undiscovered stock, but the company’s business is flat out booming. It reported its third-quarter results last month, and they were spectacular. Quarterly sales increased 32% to $4.84 billion while profits jumped 27% to $0.62 a share! That’s no surprise because iPod players were flying off the shelves. Apple shipped 8.73 million players, 35% more than a year earlier. And as far as I can tell, the iPod product line’s popularity will continue,” Tony Sagami, the owner and founder of Harvest Advisors, writes for Money and Markets.
Sagami writes, “Plus, the iPod’s success allows Apple to cross-sell other services and devices to consumers. For example, Mac computer sales ballooned to 1.61 million last quarter. That’s up 30% from last year and a company record for any three-month business period. And Apple has more tricks up its sleeve, too. The company is supposedly getting ready to enter the cellphone market with its own.”
“Sure, Motorola already has a cellphone that syncs with Apple’s iTunes music store and includes an iPod-like interface for navigating and playing digital music,” Sagami writes. “But Apple is known for its meticulous designs. The company will probably offer a full-fledged personal media device that includes a camera, vivid color monitor, complete iTunes features and integration, as well as a cellular phone. They’ll probably fly off the shelves.”
“One rumor – which I think is more right than wrong – says Apple placed an order for 12 million cellphones from Taiwan-based contract manufacturer Hon Hai Precision for delivery in the first quarter of 2007. That means we might see this new product early next year,” Sagami writes.
Sagami writes, “How might this device affect Apple’s bottom line? One forecast I saw estimated that an iPod phone could add $6 billion in sales and $0.70 a share in profits in 2007. While the numbers could change, an Apple phone could add a mountain of new profits. I think Apple will be a triple-digit stock in a matter of months, and that’s why my Elite Stock Trader subscribers are holding the shares.”
Full article here.
Related article:
Apple shares hit new all-time high – November 20, 2006
Prediction: Apple’s market cap to pass HP’s in 2007 and lap Dell’s (double Dell’s).
I agree with Stock Options Restatement’s comment. While it’s performing nicely now; come January it will be a different story after the stock restatement.
If Apple has to backdate the stock to 2002 then the stock holders are in trouble. Apple itself said not to believe in financial communications from 2002 on.
In 2002 the stock was flirting with the $7.00 mark.
On Sept 30th 2002 AAPL Opened at $7.20 and Closed at $7.015
If they have to restate to the 2002 amount that’s a $79.00 hit per share, that’s a huge amount of money.
They have to restate the stock by Dec 29th.
Not only do they have to do the restate they have to pay taxes on the restated amount.
It’s a good thing that they have $10 billion in cash because they are going to need it.
You guys can believe what you want, but I’ll be shorting AAPL after christmas.
Here’s the quote from the Ruters news story:
“On August 3, Apple said it would likely need to restate earnings and delay its filing its report with the SEC because of the options review, adding that its financial communications issued since September 29, 2002, should not be relied on,” Reuters reports.
Here’s the MDN link to the story:
http://macdailynews.com/index.php/weblog/comments/10516/
1 share split to 10 shares and worth $30 a share does not equal a share being $300. If we use your reasoning, almost all stocks that are large cap are over $300. Wal-mart would be up in the thousands. I’m just saying that the price to buy one share of Apple will not cost $300 anytime in the next 15 years. It will be split before then. And even if it splits, using your same logic, the one share still didn’t cost you $300. It cost you what you bought it for. It will never be, in the next 15 years, 1 share = $300.
Backdate Rob,
That does not mean they have to go back and lower the price. They will just have to restate earning, because they will be lower due to the actual higher cost of the stock options that they granted. This will be able to all be settle with the cash they have on hand most likely. I wouldn’t short a company that will be relasing new products in Jan. and will be gaining computer market share, server market share, cell phone market share, and retaining mp3 player market share. No matter what happens, growth is still happening, and speeding up.
I’ve got AAPL stock, it is quoted on the London stock exchange.
Scott,
I’m not talking about long term shorting. Your right they don’t have to restate to the Sept 2002 date. But if they do restate to that date then the bottom will fall out. If your shorting when it happens then your going to make a bunch of money.
Do you think Enron told it’s share holders that the stock has going to tank??
Now I’m not saying that Apple is Enron by any means but; it’s in Apple’s interest to bring to market in January the new iPhone and Leopard. That way they can recoup some of the shareholders money that will be lost after the backdating.
Do you know why they backdate on Dec 29th? That way the bad numbers won’t look so bad compared to the Christmas revenue numbers. They also do it for tax reason’s as well.
I’m not hoping for AAPL to tank I just hoping to make some money when it dips low on Jan 1st.
What happens if Apple doesn’t introduce the iPhone in January? Investors will pull out that’s what. The iPhone is so hyped at this point that it’s driving the stock.
Remember back in April when AAPL took such a big hit? If they don’t introduce the iPhone in January the April stock price dip is going to be very small in comparison to the possible January dip.
The iPhone is driving the market now, but I believe that the increase in computer sales would sustain any stock price that the iPhone doesn’t create if it doesn’t come out. Also the iTunes movies, and the iTV. There is a lot going for it. I don’t think that the stock will tank when they announce the issues. The restatement will be in the millions, and they have $10 billion. The stock will take a dip, but I wouldn’t expect anything more than maybe 10% at the absolute worst.
Scott,
I’ll hold you to that 10% prediction. I think you’ll see a huge corporate/large investors sell-off of AAPL after christmas, when the corporations/large investors sell their stock before the restatement then you know it’s time to get out. If that happens then you know it’s’ time to short.
But all we can do it wait and see what happens.
AS Apple stock rises, it will split again. Apple last split somewhere around $90- 2 for 1. I agree it will continue to grow, but I doubt that they will let it rise above $100 for long without a split.
As to foreign ownership, most countries have depository receipts. For example, if I invest in Toyota, I will buy American Depository Receipts- not direct stocks in Toyota.