Finance and Economics；Apple's share price; iRational?
Apple is an iconic brand. Now it is a totemic investment, too.
The new iPad, which was released on March 16th, is the most popular version of the tablet yet. Apple sold 3m of them in just four days. But some buyers took to discussion forums to report that it has a tendency to heat up. A similar debate exists about Apple's stock.
The company's share price has risen by 83% in the past year, and by almost 50% so far in 2012. Apple is now easily the largest company in the world by market capitalisation, at some 565 billion dollar. It looms over Exxon Mobil, which is worth a mere 408 billion dollar. Since the start of this year it has added 187 billion dollar to its valuation, roughly equivalent to the entire market caps of companies like Procter Gamble, Johnson Johnson and Wells Fargo. Apple is larger than the American retail sector combined.
It accounts for 4.5% of the SP 500 and 1.1% of the global equity market (see chart 1). Some bank analysts have started to report America's corporate earnings without Apple, because including the firm so skews results. Fourth-quarter earnings are expected to have risen by 6.7% from the prior year for companies in the SP 500, but by a much more modest 3.6% if Apple is excluded, according to UBS.
Around a third of all hedge funds own it, including big names like SAC Capital and Greenlight. Some have made very big bets. Citadel's 5.1 billion dollar stake in Apple (as of December 31st) accounted for around 12% of its equity portfolio. Many hedge funds that have done well in the past year owe much to this single position.
The stock's gains this year have not only boosted the spirits of shareholders but also brightened the whole equity market. Apple is responsible for more than 10% of the SP 500's rise this year (see chart 2), and for 39% of the NASDAQ 100's gains. No other stock has ever grown to have such a significant impact on an index so quickly, says Howard Silverblatt of Standard Poor's, a ratings agency.
The share price keeps soaring. On March 20th, a day after Apple announced it would use some of its cash hoard (estimated at 97.6 billion dollar at the end of 2011) on a quarterly dividend and a 10 billion dollar share buy-back, its shares closed at a record high of 605.96 dollar. This is the first time in 17 years that Apple will pay a dividend. Dividend funds, which had not considered investing in Apple before, could pile in, potentially pushing the price higher still.
Most analysts remain committed fans of the shares. Some claim that a 1 trillion dollar valuation could soon be possible. The bullish case runs as follows. Apple has low penetration in the personal-computer and smartphone markets, and can hook millions more customers in emerging markets like China and Brazil. Although questions remain over how much of Apple's innovation was due to its magician-in-chief, Steve Jobs, who died last October, the launch of the new iPad has calmed nerves somewhat. Apple is poised to enter new arenas like television and mobile payments.
The firm still has a ton of cash to invest in new products and ward off emerging threats. Horace Dediu of Asymco, a data-analysis firm, has estimated that even after the dividend payout and any buy-back activity this year, Apple could still end 2012 with over 35 billion dollar more in the bank than it had at the end of the previous year. With an historic price-earnings (p/e) ratio of 22, shares are not as dear as you might expect, and look even more attractive when the p/e is calculated based on forward earnings. Apple's revenues are forecast to grow by at least 51% in fiscal-year 2012 and by 23% in 2013, according to Morgan Stanley.
苹果公司拥有大量的资金可投资于新产品和预防潜在的风险。数据分析公司Horace Dediu of Asymco估计到：苹果今年即使施行了分红和回购行为，其2012的银行存款将同比增长至少350亿美元。考虑到苹果的市盈率仅仅为22，那么其股价就并非那么高了。如果通过未来收益来计算市盈率的话，苹果的股价将会更有吸引力。根据摩根斯坦利，苹果公司的在2012和2013会计年度的预计收益至少分别上涨51%和23%。
Others reckon that the outlook for its business is not the only thing that has been driving the steep ascent of Apple's shares. The stock has seen such heavy gains in recent weeks that many investors can't afford not to have Apple in their portfolio. Fund managers that are judged against a benchmark where Apple is heavily weighted, like the NASDAQ 100 or the SP 500 technology index, have to scramble to keep a heavy exposure to Apple. “The speed of the move and the size of the company scare people who haven't got it,” says Andy Ash of Monument Securities. “The danger is that you end up with everyone buying it because they have to rather than because they want to.”
Some wonder whether the stock is headed into bubble territory. Apple's p/e is much lower than that of stocks in the dot-com bubble; America Online's was a ridiculous 154 in 1999. But contrarian thinking is thin on the ground. There is very little short interest in Apple. “Call” options, which give the right to buy Apple stock, are much more expensive than “puts”, which give the right to sell the stock, says Mark Sebastian of Option Pit, a consultancy. Of the 54 analysts who track Apple stock, only one has a sell rating, according to Bloomberg. Robert Shiller, a Yale economist and author of “Irrational Exuberance”, reckons that the “emotional attachment” to the Apple story and “wild” enthusiasm about its stock are reminiscent of a bubble. “You could play the bubble, because it might not be over yet, but I wouldn't put money in Apple stock,” he says.
一些人怀疑疑虑，苹果的股价是否存在泡沫了。然而相较于互联网泡沫时代股票的市盈率，苹果的市盈率非常的低了；美国互联网公司在1999年市盈率竟然高达154.但是逆向投资者少有人在。几乎没有投资者抛售苹果股票。Option Pit（咨询公司）的Mark Sebastian说，苹果股票的看涨期权远贵于看跌期权。根据Bloomberg，追踪苹果的54位分析家中只有一位建议卖出。耶鲁大学经济学家兼非理性繁荣的作者Robert Shiller说到，投资者们对苹果传奇的情感依附和狂热让人想起泡沫时代。他说：“你可以利用苹果股价泡沫来赚钱，因为其还不会破灭，但是我是不会购买苹果股票的。”
Even if bubble talk is over the top, a higher share price is justified only if Apple continues to meet earnings expectations. That usually gets harder. The stocks of market-leading companies historically underperform once they have reached the top slot, since they are less nimble and more vulnerable to attacks by regulators and the press. It is harder to continue impressive earnings growth on a large base. Even a modest earnings miss could have a big effect on the share price, since more of Apple's shareholders today are fickle traders.
If there was a fall, it would ripple. Technology investors, which have a higher concentration of Apple in their portfolios, are the most vulnerable. Apple makes up more than 18% of PowerShares QQQ, an exchange-traded fund with heavy exposure to technology stocks, for example. More unsettling are funds that have strayed into buying Apple against their mandate, including some mutual funds that are supposed to focus on smaller companies. “If Apple has a wobble, you could see it dictate broader market movements,” says Alec Levine of Newedge, a broker.
如果苹果股价下跌，其将会产生连锁反应。重仓持有苹果股票的科技型投资者最容易受到影响。例如，交易所基金PowerShares QQQ重仓持有科技股，其中苹果比重超过了18%。那些违背委托意愿而购买苹果股票的基金对股价下降更会心神不宁，这其中包括一些本应投资于小型企业的共同基金。新际集团的经纪人Alec Levine说：“如果苹果的股价产生波动的话，它将引起整个市场范围的波动。”
Hedge funds could be among the biggest losers. They look clever now for buying a stock that has seen such a rise, but they will look dumb if they lose money when it falls. Some may question whether they should earn such high fees simply for buying into the world's most valuable listed firm. Where's the genius there?