Of course, it's now in vogue to disparage Blackberries, but pre 2008 times were looking bright as ever. With a stranglehold on enterprise/business users, a proprietary security system/network, and an efficient phone design, RIMM could do no wrong. Was that a moat? In hindsight, most definitely not, as missteps in consumer phones (yes, I have one), have brought questions as to RIMM's survival, let alone growth.
For AAPL, bulls point to continual innovation driven backed by $100B-cash on hand, a cheap valuation ~13x ttm earnings vs. 20%+ ttm eps growth. Specifically, Einhorn points to the software/AAPL-halo argument, which says that users who enter the AAPL ecosystem (itunes, icloud, ios, etc.) will continue to upgrade.
In essence, AAPL is a (social) media software company that monetizes through high margin hardware.
Bears point to reduced innovation after Jobs' death, with the recent iPad mini premium-priced but lacking any real new features. At the same time, Samsung's Galaxy S3 has better hardware specs (larger screen, etc) and has outsold the iPhone 4S last quarter (except at AT&T).
Finally my 14-yr old brother, who has an itouch and uses itunes, likes the iPhone 4S better than iPhone 5.
Who is correct? I used to be of the former opinion, but with the recent sell-off and insider selling even into the iPhone 5/iPad mini, I'm not so sure and can think of easier longs to buy.
Other thoughts welcome!
-Stanley
Disclosure: no position in AAPL
Question isn't whether AAPL good or bad, question is given the price performance and fundamentals whether its attractive or not relative to other stocks. Too much is made of stox like aapl--will they? Won't they? Better to focus on relative strength, imo.
ReplyDeletefair enough - but how exactly to use/define relative strength? we see aapl underperforming for the past month (-14% from highs), but it can be more ambiguous because in 2011 q3, aapl corrected -10% as well before a +50% 2012.
ReplyDeletewill definitely agree that the stock may be too (over)analyzed, and the 'moat' post is an attempt to find overarching themes that may drive earnings & price momentum more than "x# ipads sold"