While I think Samsung is a great stock and company, it's not like Apple is failing miserably. Shorting it here seems like a scary idea. They have 120 billion in the bank with a PE < 15. ex cash it's 10 or 11.
I'd agree with you if Apple had said they were going to use all that cash to force content providers to let them change TV.
But seeing as Apple TV isn't trying anything ambitious, and they've decided to pay all that cash back to investors instead of disrupting new markets, and Samsung is clearly killing it as their chief rival, I also hold the OP's opinion that Apple has peaked.
They aren't paying anywhere close to all that cash back to investors. They are paying roughly 1/4 of the new money they make each quarter. Total cash still went up last quarter by several billion. Apple TV may or may not be a myth, but they haven't announced anything yet so I don't think you can say whether or not it is ambitious.
Samsung is killing it, but Apple still made more money this quarter (and every recent quarter). They are a 6-700 billion dollar company that is growing > 20%. With a PE of 11, how do you short that?
The last two years, Apple has done things that no company has done in the history of capitalism. It really is remarkable, and should be taught in history books.
To say that they've peaked is not to say that they're going to fail or flop or anything like this, but I don't see them getting to a $1Trillion market cap without a major disruption in television. To say that they've peaked and that their stock is unlikely to go up is not necessarily a critique of Apple, but an acknowledgement of gravity.
To me peaked seems to imply that they will be going down quickly, and I just don't see that happening anytime soon. Look at the amount of money they've been making, and then look at their market share. Macs, it's tiny. iPhones, where they make 50% of their profit, it's half of samsung. Yes they dominate in tablets, but that is a rapidly growing market. They can lose share and still grow there.
It seems to me that the way the phone business is they don't really need to do anything special at all and they will make about 50 billion profit next year. That makes them undervalued in my opinion, just based on the fundamentals.
Now, do I think they are going to a trillion market cap in 3 months, not at all. But I think at this level they are a much better buy than sell. If only for the dividend that is likely to be growing by large amounts. all this being said i agree that samsung is also a buy. They are selling huge amounts of phones, and they are also selling the components for lots of others (though i think i just read they stopped selling screens to apple maybe?)
My short was at 700. I'm up ~15% where they had a P/E of ~17.
I'm not too worried. Apple was worth ~$700 billion and based on future growth prospects, market saturation, commodity competition and the squeeze currently being put on by the entire world's electronic manufacturing community backing Android on both the high/low ends and in terms of sheer volume (millions of activations per day) - I feel rather secure.
Apple is being Netscape'd.
No company can survive a full world supply squeeze with path dependent adoption. Even with their cash horde (which they are paying out because they literally can't use it) they can't directly confront hundreds of billions in global investment in electronics manufacturing through South East Asia chasing Apple's profits. If they do try - they'll be Solyndra'ed.
Screens are now commodity (see lagging iPad).
However, I've been thinking of closing up my short this week so who knows - I might buy. Investors who win are investors who think and always have the ability to change their minds, reverse direction and go all in if the fundamentals change.
