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Alexander J. Poulos

 
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  • Apple: Don't Panic [View article]
    Ashraf,

    I believe you should reexamine your view on share buy backs. Lets look at INTC for instance. Re run the numbers assuming they didn't repurchase shares and the per share profit drop becomes even more dramatic. Share reduction schemes have a legitimate place and can greatly increase LONG term shareholders wealth if executed properly.

    The absolute best time to initiate is when the shares are being quoted at a low multiple. INTC in 2010 is an excellent example, along with AMGN. Both hit a bump in revenue growth and were trading at below a below market multiple. In INTC case it was a single digit number.

    INTC invested large sums of money in new factories and equiptment for demand that didn't materialize. They are being penalized for it now and are scrambling to correct the error. Their balance sheet hasn't prevented them from acquiring complementary companies over the past 3 years.

    Other recent examples of single digit p/e's was the defense industry during the first quarter of last year. NOC is the best example as their astute CEO took advantage of the markets rather myopic view that the government view would cut spending and borrowed at very low rates to repurchase up to 25% of all shares outstanding. Take a look at where NOC is trading now as proof of concept.

    As for longer term if you have a company with very stable revenue (traditionally the consumer defensive/ energy names) a consistent quarterly share repurchase will pay off over the longer term (10 years). Over the course of roughly 40 quarters you will have highs lows and everything in between. Your dollar cost average will even out and the relentless share reduction will greatly benefit LONG term shareholders. Examples are KO, CL, PM and XOM.

    Getting back to AAPL, what exactly do you expect them to do with all this cash in a world where 10 yr treasuries yield 2.6%? You realize they could theoretically buy out INTC for cash and use them for their own personal foundry and still have plenty left over. Not that I expect them to do so, this was for illustrative purposes. AAPL is tailor made for a significant repurchase program, as the shares trade at a very low multiple combined with what I would term a very stable revenue base.
    Jan 30 05:34 PM | 1 Like Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    "While the China Mobile announcement had long been anticipated, we believe the official announcement, and the consequent certainty, should be viewed as a positive," says Wells' Maynard Um. He thinks there's upside to his team's December quarter iPhone units estimate of 54.8M, and he's comfortable his 42.8M prediction for the March quarter, "which implicitly includes some China Mobile units."
    Apple's (AAPL) price target is hiked to $650 from $600 at Stifel, which sees incremental EPS from the deal in the $4-$8 range.
    Piper's Gene Munster says the deal means another 17M more iPhones sold in 2014, and a 5% boost to revenue.
    Shares +3.5% premarket
    One iPhone supplier, ARM Holdings (ARMH) is ahead 0.2% premarket.

    Deal is official. AAPL may catch a positive tailwind here. Old Warrior you comment about them hitting $600 by year end may come true.
    Dec 23 08:15 AM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    oldwarrior,

    AAPL announced great earnings surpassing revenue and earnings expectations. You could get a melt up and see $600 by the end of the year. Even if we don't see $600 in December, I suspect after Q1 2014 we will get it. Long AAPL and IBM.
    Oct 29 02:19 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    IBM adds $15B to buyback program, shares edge higher • 12:18 PM

    The new funds, approved at a board meeting, raise IBM's (IBM +2.2%) total buyback authorization to $20.6B, good for repurchasing 10.4% of outstanding shares. (PR)
    IBM momentarily shot higher on the news, but has quickly given back most of its gains. A major new buyback approval was widely expected.
    Big Blue has been spending aggressively on buybacks, which (along with lower tax rates and margin improvements) have helped keep EPS growth positive in the face of revenue declines. Buybacks amounted to $1.9B in Q3, and $3.6B in Q2.
    IBM added $5B to its buyback program both in April and last October. The company also hiked its dividend by 12% in April.

    With today's announcement combined with investor's dour mood for the company's shares expect the buyback to be quite successful. IBM repurchasing 10% of all shares remaining will allow it to easily surpass $20 a share in earnings for 2015.
    Oct 29 02:17 PM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    ispank,

    Icahn's tweets have definitely had an impact on trading. I disagree on APPL being hated in America. The US is their largest and best market and the products are status symbols. I would hardly call them hated.
    Oct 3 07:17 AM | 1 Like Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Sally,

    You don't have to trust Icahn. What he is agitating for makes financial sense. I will use PAYX and APPL to prove the point. PAYX trades at a multiple above 20 and pays out over 3% in a boring predictable business. The stock isn't overvalued and the correct way to reward shareholders is to raise the dividend which they have done. They have initiated a small buyback program which will offset any dilution from option grants keeping the share float steady. Correct move again from this well run company.

    APPL is an extremely successful company with far more cash than they need. The interest generated on cash is miniscule and doesn;'t reward shareholders. The companies multiple is in the single digits (incidentally similar to the oil majors such as BP and XOM) and is down for the year. The most prudent course of action here is to aggressively repurchase shares. Unlike the oil majors, AAPL capital expenditures are minimal so the buyback will work in two ways. First it will shrink the shares outstanding giving current owners a larger percentage of future profits. The second way it will help is by putting a floor under the shares. AAPL constantly comes into the market to purchase shares from the weaker hands.

    The thing to watch is the upcoming earnings report. If it comes out good the stock will stay in the 500's and will post gains for the year.

    PS- You may want to look at this http://seekingalpha.co...
    Oct 2 11:04 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    oldwarrior,

    The $600 price tag was a tad aggressive. Ignore the noise emanating from the sewer called Capital hill. Focus instead on economic numbers here and abroad. We are seeing an improvement in the US, Japan and Europe. Market won't tank here in spite of the clowns in Washington. Lets see how the earning season plays out. I anticipate we will see further gains from here. You may even see new highs once a "deal" is made and the government is open for business once more.
    Oct 2 10:52 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    No worries. I am interested to see what AAPL reports when they release their earnings reports. The breakdown is sales and margin numbers should be very interesting.
    Oct 2 10:48 PM | Likes Like |Link to Comment
  • Apple Should Not Give In To Icahn [View article]
    Ashraf,

    You are a prolific writer who has made some interesting points in the past. You are quickly losing credibility with some of your calls. The take away from this article is Icahn is wrong, APPL shouldn't buy back shares, and instead INTC is a great buy here with 30+% upside.

    My hunch and money is Icahn is correct and INTC will continue to underwhelm and underperform.
    Oct 2 09:33 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    Carl Icahn on (where else?) Twitter: "Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks."
    Apple (AAPL +1.7%) has moved higher following Icahn's tweet. The company added $50B to its buyback program in April, and spent $18B on buybacks in the June quarter. The company had $146.6B in cash/investments at the end of the quarter (much of it offshore) to go with $17B in debt.

    Icahn won't go quietly. Tim Cook is going to be under enormous pressure to get the shares moving hire. A more aggressive buyback will in my opinion push the shares well over $500. The upcoming earnings announcement will provide some good insight into Cook's future plans.
    Oct 1 10:54 PM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Nice to see Carl Icahn agitating for a higher buyback.

    Carl Icahn on (where else?) Twitter: "Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks."
    Apple (AAPL +1.7%) has moved higher following Icahn's tweet. The company added $50B to its buyback program in April, and spent $18B on buybacks in the June quarter. The company had $146.6B in cash/investments at the end of the quarter (much of it offshore) to go with $17B in debt.
    Oct 1 10:51 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    China Telecom, Unicom to begin selling iPhone 5S/5C on Sep. 20 • 3:55 PM

    If the Chinese media report (comes from local site Sina Tech) pans out, it means China Telecom (CHA +0.4%) and China Unicom (CHU -0.3%) will start selling Apple's (AAPL -0.8%) newest iPhones the same day it's expected to launch in the U.S. and several other big international markets.
    Last year, Telecom and Unicom didn't begin selling the iPhone 5 until Dec. 14, more than 2 months after the device went on sale in dozens of other markets.
    Sina Tech also reports China Mobile (CHL +0.7%) won't be able to sell the 5S until November (assuming a deal is announced), due to the need for regulatory approval of an iPhone supporting CHL's TD-LTE 4G network.
    The 5S is said to come in 4 colors, and the plastic-shell 5C in 5 colors. Other reports suggest the 5S' colors will be white, black, gold, and graphite, and the 5C's colors white, red, green, blue, and yellow.
    An iPhone event will take place in Beijing shortly after Apple's main Sep. 10 event.
    Earlier: DoCoMo to reportedly offer iPhone soon

    Good news. It seems AAPL is gaining traction overseas.
    Sep 5 10:44 PM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    China Telecom, Unicom to begin selling iPhone 5S/5C on Sep. 20 • 3:55 PM

    If the Chinese media report (comes from local site Sina Tech) pans out, it means China Telecom (CHA +0.4%) and China Unicom (CHU -0.3%) will start selling Apple's (AAPL -0.8%) newest iPhones the same day it's expected to launch in the U.S. and several other big international markets.
    Last year, Telecom and Unicom didn't begin selling the iPhone 5 until Dec. 14, more than 2 months after the device went on sale in dozens of other markets.
    Sina Tech also reports China Mobile (CHL +0.7%) won't be able to sell the 5S until November (assuming a deal is announced), due to the need for regulatory approval of an iPhone supporting CHL's TD-LTE 4G network.
    The 5S is said to come in 4 colors, and the plastic-shell 5C in 5 colors. Other reports suggest the 5S' colors will be white, black, gold, and graphite, and the 5C's colors white, red, green, blue, and yellow.
    An iPhone event will take place in Beijing shortly after Apple's main Sep. 10 event.
    Earlier: DoCoMo to reportedly offer iPhone soon

    It looks like AAPL is gaining traction overseas. Good news.
    Sep 5 10:42 PM | 1 Like Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    Samuraitrader,

    Not necessarily true. I have left positions in the past for a better opportunity. I actually liked my boss which made it hard to do. Rule number 2 is spot on, stuff definitely rolls downhill. I have worked for a company in the past where management was inept and made consistently poor decisions yet morale was excellent. They treated their workers well. In the end it didn't matter, the business went poorly.
    Sep 2 08:14 PM | Likes Like |Link to Comment
  • How Perception Impacts Investment Results: The Case For Apple And IBM [View article]
    Billy22,

    Wrong again. Look throughout sports history, you will find examples of team's that hate each other and put that aside to win a championship. Team building does go on in some cases however in IBM's case they aren't taking their entire workforce on a retreat to "build morale". More often than not they will take their decision makers ie top executives.

    As for the quality of someone's work, the better it is you will get recognized. The savvy worker realizes that perhaps in their current position they maybe blocked from advancement. It very well could be office politics. At that moment you need to bide your time and shop your services elsewhere. You will get recognized and rewarded.

    As for CEO compensation, this is a function of the board. If the board has the shareholders interests in mind they will pay a reasonable pay package. Outrageous compensation is the main reason why I won't invest in Mckesson the drug distributor. Take a look at the CEO's compensation over the last few years, absolutely absurd.
    Sep 2 08:11 PM | Likes Like |Link to Comment
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