Escolar Documentos
Profissional Documentos
Cultura Documentos
Screeners
Gurus
Search
Insiders
Market
Articles
Portfolio
SKX
CMG
XCO
DMND
CVA
ACF
MRVL
-0.46%
0.79%
0.52%
-2.24%
-0.48%
-0.85%
Articles (79)
Follow
-- Browse Gurus --
-1.75%
Personalize
search
Value Strategies
Buffett-Munger Screener
Aggregated Portfolio
Undervalued Predictable
ETFs, Options
Today I started reflecting on Amazon and Apple. Ive been shopping on both
of their websites as Christmas inches closer and I started thinking about
Insider Trends
10-Year Financials
52-Week Lows
Interactive Charts
Model Portfolios
DCF Calculator
RSS Feed
Monthly Newsletters
in context. They both seem very expensive on the surface but have
incredible growth potential. Back to Amazon and Apple. One company
Intelligent
Speculator
BERK My Stocks
nabeel fazal
SUBSCRIBE
AMZN -0.04%
LNKD +0.6%
Bookmark
Tw eet
Share
Like
5D
YTD
1Y
5Y
10Y
4 followers
500
250
Jan '12
Apr '12
Jul '12
Oct '12
GURU INTERVIEWS
MORE
Apple Model
The Apple model is much more similar to what were used to. After turning the company around,
Steve Jobs gave a clear vision by working on a handful of key products that were significantly
superior to alternatives in every possible way (design, ease of use, experience, etc). That helped
Apple build an incredible brand, an army of fans that continues to be impressed by the
latest releases. Apple could virtually launch any type of product and have a huge
success no matter how it is priced, etc.
GURU NEWS
MORE
The big downside though is that it could change over time, especially if Apple ends up
releasing a product that lacks its usual quality. The recent Apple maps fiasco in the latest iOs
was one such example. Get a few more like those and you could see a major shift.
VALUE IDEAS
MORE
I do think that the Apple model is fairly easy to evaluate. You have a company that
generates $X, growing at X%. You can then compare the P/E ratio to other competitors which
has personally led me to become a major believer in the stock in recent months.
www.gurufocus.com/news/200542/amazon-amzn-vs-apple-aapl-which-is-more-sustainable
1/4
12/9/12
MORE
Apple (AAPL) Stock Crazy Not to Own It? - Dec 23, 2011
The Time Has Arrived: Zynga (ZNGA) Turns Public - Dec 16,
2011
MORE
Amazon model
Amazon is a very different model by comparison. It started off in the physical book
business and gradually became dominant. At that point it started moving to other industries
selling different products through its main brand but also sub-brands such as Zappos.com,
Diapers.com, etc. All of those have given Amazon a dominant position in much of the ecommerce
business.
MORE
and win in many different spaces for cloths, books (now even getting into book
publishing), video, cloud computing, it now also competes with Netflix, is getting into
local shopping, etc.
www.gurufocus.com/news/200542/amazon-amzn-vs-apple-aapl-which-is-more-sustainable
2/4
12/9/12
In The Meantime
I struggle valuing Amazon because its EPS is basically meaningless. As long as Amazon
keeps pumping money into losing businesses to destroy competition and increase its
capabilities, market share, etc. EPS will remain somewhat irrelevant. What is important is:
-Will Amazon start focusing on earnings per share at some point and what would happen if
that was the case?
I guess no one has the answer to that question but clearly many including myself think it will happen
at some point. If we didnt, Amazon (AMZN) would be an obvious short at its current valuation
LNKD
-2.56% -0.04%
AAPL
0.6%
Subscribe RSS
Tw eet
Share
Like
Comments
Nabeel fazal, please post a comment:
Text Editing Tools
Font Name and Size
Arial
Font Style
13
Lists
Insert Item
body
Value Strategies
Buffett-Munger Screener
Aggregated Portfolio
Undervalued Predictable
www.gurufocus.com/news/200542/amazon-amzn-vs-apple-aapl-which-is-more-sustainable
3/4
12/9/12
ETFs, Options
Insider Trends
10-Year Financials
52-Week Lows
Interactive Charts
Model Portfolios
DCF Calculator
RSS Feed
Monthly Newsletters
GuruFocus Affiliate Program: Earn up to $140.4 per referral. Learn More FAQ Join the affiliate program
Site Map
Term of Use
Privacy Policy
Become an Affiliate
FAQ Contact Us
Sign Out
This page used 105 ms for its computations It spent 14 ms in system calls
www.gurufocus.com/news/200542/amazon-amzn-vs-apple-aapl-which-is-more-sustainable
4/4