Apple Computer, Inc. (AAPL)

[DDS5]

Originally Posted by GRock

U U G G H !!!

On my charts got the 3 arrows and bought this morning and then got clocked by the pixar option story from WSJ. Dropped 3 % before I knew it. Will have to wait to see what happens Monday. Could be buying high and selling low again. Bummer.

Anybody else get caught?

GRock

Ditto. I saw what you saw. Thought I might be premature but put an order in anyway and went to work. Oh well. IRA money. Some day, before I need it, it'll be above $85.88. Right?........

[GRock]

Originally Posted by GRock

U U G G H !!!

On my charts got the 3 arrows and bought this morning and then got clocked by the pixar option story from WSJ. Dropped 3 % before I knew it. Will have to wait to see what happens Monday. Could be buying high and selling low again. Bummer.

Anybody else get caught?

GRock

Went through this with United Health last year. The option stuff kept hammering the stock down. Finally bailed when McQuire was run off. Lost the management part of the 3 M's. Stockholders were in arms over his compensation but allot of it was the run up of the stock that he help create. If for any reason Apple loses Jobs it will lose a major " M". Corp knows that also and will do everything to keep him unlike McGuire. Going to try to hang on through Monday if I can stand the pain. Went from 3 greens to 3 reds in a day's time.

Waiting for CTSH to drop to get back in as well as GOOG. Bought a local Energon (EGN) with the news of Natural Gas find here in Alabama. Was not even thinking about them and did a quick MOS calculation and it look good. Check'em out. Moved to quick to check out the other M's though. (old habits are hard to die).

GRock

[TradeHiker]

I checked EGN with Morningstar but they don't ahve coverage on that one...sorry. I went with Chesapeake Energy (CHK) last week on a natural gas play...up just under 1% so far.

Hi there,

I'm new to this site, and to the calculations from the book. I've been interesting in Apple stock, and went through the numbers last night. However, I came up with a totally different MOS (which I doubt I will ever see), namely $58.85.

I won't detail all the numbers - I got them off of the advn site - but I will give the growth rates I came up with to do the MOS calculations.

EPS 10yr: 21%
EPS 5yr: 126%
EPS 1yr: 43%

Cash Flow 10yr: 31%
Cash Flow 5yr: 132%
Cash Flow 1yr: -31% (??)

Equity/BV 10yr: 21%
Equity/BV 5yr: 20%
Equity/BV 1yr: 31&

Sales 10yr: 12%
Sales 5yr: 35%
Sales 1yr: 39%

EPS growth: 21%
Historical PE: 30
Sticker Price: $117.76
MOS: $58.85

All I can figure is that with a PE of 40, the MOS is $78.50. Is that what people are thinking? I can totally believe the PE of 40 in the next few years, but it seems hard to sustain for ten years, particularly if the economic environment dampens.

On an unrelated note, I'm intrigued by CAJ (Canon) but haven't gone through the numbers yet... it looks like the most recent annual numbers are not in yet.

I'm paper trading as of yet anyhow...

[Bret]

Hi Bets,

There's a thread on Phil Town's Blog regarding the MOS calculation...and yes, using a PE of 40 gets you very close to the MOS. However, Phil points out that it's a tough one to fix a price to and concludes:

My best guess... and this is a long way from the kind of certainty we seek... is that the market has priced AAPL just about right. If you want a 15% return with no MOS, pay $84 and watch out. It would be nice to buy it for $42, though, wouldn't it?
Now go play,

Rule #1 Blog: Phil Town on Investing: Rule #1 Question of the Week: What About Apple?

There's a lot of uncertainty with the backdating options. But...I feel the iPhone has the potential to make this stock a big winner this year but we'll have to wait till summer to know more.

[Xyvern]

I used the new updated MOS spread sheet and the MOS $ came up to $7.72. How did you guys get the MOS close to $60 ?

[Justin]

Hi xyvern, here is what I'm showing on my results for AAPL.

aapl.gif

You're right, by default the spreadsheet does report a MOS of about $7.72, however if you look at the numbers used to derive that figure you'll see that the Rule #1 PE is pretty conservative (5).

You might want to read through this thread. Here is a quick excerpt:

Whenever we see a valuation that seems to be way out of whack, our first suspect is always the data used to arrive at that calculation. With such a barrage of data, the spreadsheets can be a little overwhelming at times. For the sake of this tutorial, we won’t be concering ourselves too much with the area’s blurred out. For the most part, these values are not relevant to the most common problems. It’s comforting to know that the answer to the most common yet unavoidable problems are usually found in one of three places:

The Rule #1 Growth Rate - Cell H18
The Current EPS (TTM) - Cell H19
The Rule # PE - Cell H24

These three variables have the most impact on the resulting Margin of Safety Valuation. They are also the most prone to reporting strange or inaccurate values. This is because the spreadsheet is designed to always use the most conservative figure based on the raw data it has been given from the data site used.

It will go into greater length about why the spreadsheet sometimes comes up with these seemingly "strange" MOS calculations.

Next to the default value I entered my own projections of Growth and PE, and the spreadsheet adjusted for these projections and calculated a MOS closer to the $60 range.

Hope this helps!

[Xyvern]

Originally Posted by Justin

Hi xyvern, here is what I'm showing on my results for AAPL.

Attachment 301

You're right, by default the spreadsheet does report a MOS of about $7.72, however if you look at the numbers used to derive that figure you'll see that the Rule #1 PE is pretty conservative (5).

You might want to read through this thread. Here is a quick excerpt:



It will go into greater length about why the spreadsheet sometimes comes up with these seemingly "strange" MOS calculations.

Next to the default value I entered my own projections of Growth and PE, and the spreadsheet adjusted for these projections and calculated a MOS closer to the $60 range.

Hope this helps!

Justin,
You the man, thanks

Thanks, everyone, for your thoughts. I feel like the MOS in the high fifties is just about right, but doubt we'll see it, at least not in the next year... although I have certainly been wrong before!

I used the calculators at the site, not the spreadsheet. Because I have a Mac! (oh the irony.)

Is there a spreadsheet that will work with OSX?

Thanks,
BB

[Justin]

BB>> you might try this spreadsheet: http://www.roicommunity.com/forum/au...osh-based.html