AAPL - Analysis - 16 Apr 2019 - SHORT

Discussion in 'Stocks' started by kmiklas, Apr 16, 2019 at 1:09 PM.

  1. kmiklas

    kmiklas

    Hello All,

    I've done a lot of analysis on AAPL, and I'd like to run it past you to see what you think. Thanks in advance, love you all! ~Keith :^)

    Summa Summarum:

    - I'm short on AAPL, and expect a 10% correction soon.
    - Target price $180.
    - Analyst rating: SELL

    ANALYSIS

    1. Service Company. Alarming to me is that AAPL is expanding sideways into other markets. I read this as a tip-off that device growth and innovation has stagnated. They haven't released a new "Apple Teleporter" or some new innovation; they're entering other markets to prop up their growth.

    2. Recent (March 25th) announcements. Honestly, this stuff has all been done:
    a. Apple TV - Fierce competition, been tried. Meh
    b. Apple Arcade - Gaming is great, and money is there, but it's ultimately a vidiot market. Will it include Fortnite? Doubtful. Maybe they'll buy it :^)
    c. Apple News - Again, fierce competition, and they have to pay a big chunk of change to the content providers.
    d. Apple Magazine - Meh.
    e. Apple Card. Bad move, Tim. This is a great way to piss off the financials, and has the potential to cause real problems. I used to work for AT&T; "Ma Bell." They started to expand into other markets. introduced the AT&T Universal Card. When companies don't "Stick to their Knitting" and challenge the financials, it causes problems. They were eventually busted up.

    3. Disney's recent announcement to offer a streaming service dropped NFLX about 5%. AAPL's announcement didn't move the needle; it had little, if any, effect. It's basically a non-factor (perhaps non-starter?!)

    4. Another GE? Is AAPL now following in the footsteps of GE, where they're starting to sprawl? This is not the AAPL of 2000; they're facing a typical economic cycle now. It happened to US Steel; it's happening to GE... it can happen to AAPL.

    5. Tim Cook is an Operations guy. Granted, Jobs is a tough act to follow, but Cook has remarkably little innovation. He spent the first 12 years of his career with IBM. He's not really a visionary; just a typical "Big Blue" kind of thinker. 10 years after Jobs' passing, we're seeing Cook's AAPL... and it hasn't changed much.

    6. CHINA. Huawei copied the iPhone design and is selling it. The Chinese Guv'ment is "encouraging" people to buy one of over 100 Chinese-made phones (read: buy an iPhone? You will be executed and your organs harvested and sold).

    7. AAPL to Buy Something? There's a real risk that AAPL is about to drop a boatload of ca$h, and buy somebody. This will dramatically affect their valuation.

    8. iPhone stagnation. iPhone is about 2/3rds of AAPL revenue, and their sales are stagnating:

    [​IMG]

    RISKS

    1. It's the economy, stupid! The greatest risk I now see is that AAPL is in the DOW, and Trump loves his Dow. It's possible that he will prop it up to keep the "economy" good to improve his re-election prospects.

    2. The Dovish Fed. Seems like the Fed is backing off on raising rates. This could trigger a ca$h flow back to equities. On that note, it's a bit depressing that they might have to lower rates; it sends a message that the economy really isn't that great. There's no inflation because peeps aren't spending.

    It's also alarming how the 10T is hanging around 2.6%... even with dovish statements. Eek! Shows how investors are holding to the bond market and skittish about going into equities.
     
    Last edited: Apr 16, 2019 at 1:35 PM
    Nobert, SimpleMeLike and Woodrow97 like this.
  2. dozu888

    dozu888

    doesn't matter... any short is losing sight of the big picture.

    but take aapl for example... the thing is forward yielding earnings at 6.x%.... for the biggest blue chip tech in the world, with earnings still on the upward trajectory.... now look at bonds, junks at 5.x%, AA corp at 3.5, gov 10-year at 2.5

    is there something wrong with this picture... junks yielding less than apple?

    SP should be at 5000 right now... but my pro boys are not advertising it... but I am letting you in on this secret lol.
     
    SimpleMeLike and kmiklas like this.
  3. sfwind

    sfwind

    Not long ago, there is blackberry and nokia...Now I am using Huawei...$550 (including tax). It is as good as Iphone.
     
    kmiklas likes this.
  4. Woodrow97

    Woodrow97

    You have no idea what you are talking about. The supplier for ALL of AAPL's semiconductors they use in IPhone, IPad, Mac, etc. is Taiwan Semiconductor Manufacturing Ltd., their revenues are down -23% Y/Y in Q12019!
    You also seem to be oblivious to what is happening in Asia, Huawei and Xiaomi are capping their net profit margin for phones at 5% in order to squeeze AAPL out of the market. It's working, marking share is down double digits last year and is continuing.

    EPS is definitely NOT on an upward trajectory. Even Tim Crook himself guided to single digit revenue decline this year. LOL.
     
    kmiklas likes this.
  5. kmiklas

    kmiklas

    Wow you actually bought a Huawei? Are you in the U.S.?
     
  6. dozu888

    dozu888

    LOL back at ya... don't know the difference between rev and earnings?
     
  7. Woodrow97

    Woodrow97

    BRUH You need to read their reports, they guided revenue declines at constant margins, not withstanding the effect of buybacks, the implied EPS guidance is NEGATIVE.
     
    dozu888 likes this.
  8. qlai

    qlai

    You know very well that we are traders here (or at least trader wanna bees). So you are missing timeframe and stop. "Soon" is too vague. You don't need any funnymentals to change for AAPL to have a 10% hickup.
     
    Nobert likes this.
  9. dozu888

    dozu888

    ok... you are paying attention :)

    so, even if that is true.. (although the reliability of 'implied' 'guidance' is highly debatable)... what is the default rate on the junks? so that makes AAPL still undervalued right?

    actually I usually don't pay much attention to individual stocks... everybody is looking for free lunch, then there will be none, which means all stocks are valued fairly, in relation to each other.. so AAPL is fair game at 17 times P/E vs. AMZN at 1000 P/E whatever that is.... I don't even know and I don't care, because all the other market players already ensured that it's fair between AAPL and AMZN and by the token between all of them..

    so basically it comes back to the index..

    at the moment SPY and JNK both yielding 5.x%, the former with a growth rate, the latter with a default rate.

    that's why the 'Fed Model' uses the 10-year with zero default rate as the baseline, not corporate..

    but.. I be the bull I wanna be, you be the bear you wanna be, it's all good...

    thing is the oct-mar shake down done by my pro boys, if anyone still can't see the intention, I'd recommend revisiting price action 101.... to me it's like black ink on white paper... too obvious.
     
  10. kmiklas

    kmiklas

    Looks like I missed the Qualcomm lawsuits!