Apple: The Dangers Of Using Bad Data To Calculate Only One Metric [View article]
S Deol - Agreed. That was the real purpose of the article.. get publicity, obtain a following and then leverage that following to make $$. Unfortunately, it will probably work for him. But, in the final analysis, using that metric and that metric alone is too unbalanced for CNBC to have allowed him air time.
Apple (AAPL +2%) roundup: 1) Jim Cramer states Apple is "becoming the J.C. Penney of tech," while suggesting sentiment has become too negative. 2) The state-owned Chinese press has become more positive on Apple following Tim Cook's apology letter. 3) The USPTO has reaffirmed the Oct. invalidation of Apple's "rubber-banding" patent, which was successfully asserted against Samsung. 4) Apple has hired much of the team behind the original Segway, including robotics expert John Morrell. No word on what project Morrell is working on. (Goldman) [View news story]
How Apple Gave Wall Street The Middle Finger [View article]
Ignoring middle finger gestures; Apple should initiate a buyback program based upon the price of the stock (ex: 400-450). This will have the effect of initiating a floor for the stock while increasing the yield. Today Apple's yield is 2.5%. A 20% buyback(if they could buy this much in that price range) would jump the yield to almost 3%. Then increasing their payout from 20% to 40% further increase the dividend yield to almost 6%. Result: stock price stabilization with an upwards bias.
Paul, You may not have the numbers but being so detail oriented and mathematically inclined (based on your Amazon articles) I would have expected you to make a projection on what is known (not impacted by your hypothesis... ie non VZ iPhone users) and then make an educated guess on what is not known (VZ.. unlimited data plan). Including an estimate of china growth would then allow you to provide a useful potential impact on a percentage of iPhone overall use.
You are making good money off readers.. you should consider providing more/above information relative to your hypothesis. It will make your users stickier vs departing.
I could do this work for you as you suggest (as it's not that much work).. but I think that's not where the responsibility lies.
Good luck and I hope your decision is to continue to grow readership vs the unappealing alternative above. BV
Paul, To bolster you article can you share the number of VZ "Unlimited data plan" subscribers there are... and where those subscribers will go if they do in fact leave? These "departing subscriber" estimates can then be compared to what is going on in China not only with the China Mobile launch (Feb?) but also the stellar growth at China Telecom & China Unicom.. China is where the real game is now being played for Apple Management. If Apple can get govt buy-in (CHL included) then they're in Tremendous shape for years to come.
Analyzing Proposals To Spend Apple's Cash [View article]
davel, Let me clarify my thinking. There is occurring a transition of Apple shareholders from growth funds to now include value funds. This transition needs to be looked at from 1 yr ago vs today. This transition was/is inevitable as companies fulfill their growth potential and mature. Apple has now added a dividend and this dividend will grow over time (todays payout ratio is near 25%). The valuation of Apple in the future (as the percent of value funds grows) will be as much or more due to the dividend payout as their growth. The higher the dividend, the more value funds and the greater % of those value funds will be investing in Apple. Value Funds are significantly larger than growth funds if you look at the market in its totality... Considering pension funds and other big money funds which require less risk this is clear. The dividend provides a floor to a stock if growth slows, growth funds exit when this occurs.
So, my assumption was certainly not incorrect and the PE of Apple (like many, many other companies) has seen a compression of late. It is not the compression that is important over time, it is the dividend yield. If you have a shorter term investing horizon (say a year or two) then you can ignore the dividend but if you are a long term investor the dividend matters much. Over the course of the last 80 years, dividends have provided as much return to shareholders as has stock appreciation/depreciat...
As far as the professionals not believing in the future prospects of apple, that is certainly not the case as they've got $1/2BB invested in the stock. It's more about minimizing their risk. Almost no "professional" would say they do not believe in Apples future, but many would certainly say the upside risk vs the downside risk is becoming less favorable as Apple is required to continue to dominate when it's competitors and governments are all working to prevent market dominance.
Analyzing Proposals To Spend Apple's Cash [View article]
Kofi, Though I wish it were not true, the Apple buybacks over the course of 3 years will only cover the employee stock plans. Hindsight is 20/20 but I would have to imagine Apple management a year ago knew earnings would be unimaginably good given the upcoming product launches and the unquenchable appetite in China, China, China.. Thus, they should have been buying back shares last year. This would have improved the 1.8% dividend return to 2.5% for the same $10BB payout and $600 stock price. Too bad for the long term investors such as myself. Additionally, I realize they would have only used the US cash unless they wished to repatriate non US earnings and pay taxes first. Regardless, share buybacks should occur when the stock is clearly undervalued as Apple was last quarter with a FPE under 9.0... No need to wait longer when the price is higher to make big buybacks and thus follow the wasteful path of Cisco, Microsoft etc...
Why Amazon Shareholders Will Not Realize Apple-Like Returns [View article]
RS - Your comment surprises me. I suspect Apple is and will continue to be fine with Amazon distributing their products at the high margins Apple commands.
Amazon is a distributor and a good one at that. But, distributors of others goods do not justify these lofty multiples for decades. Additionally, in the future I expect that Amazon will be required to start shelling out sales tax like all storefront companies in America. This change will narrow their advantage over the likes of Walmart.
Ryan, I agree with Delta_V above. They seem to be keeping the number of shares consistent on a year to year basis. This employee enrichment activity is exactly what Apple announced in their recent $3BB buyback over multiple years. It is amazing to me that these companies were not willing to reduce the number of outstanding shares. You would think that the Board's might be aware of the stunning growth and that much higher profitably was a given.. they also in Apples case would have known of the increasing pressure from pension, mutual, hedge funds for a dividend increase... and that regarding Dividends it is the yield that counts (not the $size of buyback). Apples Dividend with the same monster $10BB dividend announcement should have provided a yield 4% and not 2.5%... That only would have required buying back stock 1 year ago with cash they had available... This "wait till the stock is higher" to start the buybacks is mind numbingly shortsighted. Just call me annoyed with BOD's who clearly are on the side of employee enrichment vs their fiduciary duty of taking the right steps for the company owners (shareholders). BV
Based on the link you provided, a $5/phone royalty may be closer to what was agreed to. This would equate to a royalty of just under .8%. This royalty may go on forever but as pointed out in the article, it may last only as long as apple is unable to figure out how to design around.
xfit - I am curious to know where you obtained your information that Nokia realizes 2% for every Apple iPhone? If this can be verified it will change my investment perspective on a few companies in a big way.
Alternatively, according to Apple's christmas quarter: http://bit.ly/HlWnwd iPhone sales exceeded $24BB. 2% of that would be almost $1/2BB dollar. The above $37mm you are quoting sounds more like the number of units they sold (37mm) in the quarter, not $$.
Also, I too believe that the combined Nok/Msft effort on Lumia will be successful when considering the global rollout. See: http://bit.ly/HdYuzE but I certainly don't think this takes away from what Apple has, which is one hell of a great stable of products & ecosystem that has a customer satisfaction rating +90% (read repeat customers) to die for.
A Value Investing Approach To Microsoft [View article]
Time will tell but I wouldn't bet against them. Nokia know phones, MSFT knows software. Their new collaborative phone product suite: Lumia+ will fix most of what they've missed out on recently (app store, touch screen, etc...) . It's doubtful their products will ever have the cache of Apple but they both have a large devoted following that will scarf up the new stuff as they'll finally have something cool worth worth buying. They may do better in Europe than US initially. I project they will leverage their business customers, and further decimate RIMM with a phone offering that is financially tied to their windows products.
Apple: The Dangers Of Using Bad Data To Calculate Only One Metric [View article]
Apple (AAPL +2%) roundup: 1) Jim Cramer states Apple is "becoming the J.C. Penney of tech," while suggesting sentiment has become too negative. 2) The state-owned Chinese press has become more positive on Apple following Tim Cook's apology letter. 3) The USPTO has reaffirmed the Oct. invalidation of Apple's "rubber-banding" patent, which was successfully asserted against Samsung. 4) Apple has hired much of the team behind the original Segway, including robotics expert John Morrell. No word on what project Morrell is working on. (Goldman) [View news story]
How Apple Gave Wall Street The Middle Finger [View article]
Today Apple's yield is 2.5%. A 20% buyback(if they could buy this much in that price range) would jump the yield to almost 3%. Then increasing their payout from 20% to 40% further increase the dividend yield to almost 6%.
Result: stock price stabilization with an upwards bias.
Apple's Pricing Power? Questionable [View article]
Unfortunately, I believe Mark Twain's phrase about using statistics to bolster weak arguments applies to your article. ttp://en.wikipedia.org...
Innovative products by definition capture a higher price initially and then are reduced to maximize margin dollars (profit/unit x # units).
A slight lowering of prices while adding desirable features is not losing pricing power as you believe. It's just brilliant management.
BV
Verizon Threw Apple A Curveball [View article]
You may not have the numbers but being so detail oriented and mathematically inclined (based on your Amazon articles) I would have expected you to make a projection on what is known (not impacted by your hypothesis... ie non VZ iPhone users) and then make an educated guess on what is not known (VZ.. unlimited data plan). Including an estimate of china growth would then allow you to provide a useful potential impact on a percentage of iPhone overall use.
You are making good money off readers.. you should consider providing more/above information relative to your hypothesis. It will make your users stickier vs departing.
I could do this work for you as you suggest (as it's not that much work).. but I think that's not where the responsibility lies.
Good luck and I hope your decision is to continue to grow readership vs the unappealing alternative above.
BV
Verizon Threw Apple A Curveball [View article]
To bolster you article can you share the number of VZ "Unlimited data plan" subscribers there are... and where those subscribers will go if they do in fact leave?
These "departing subscriber" estimates can then be compared to what is going on in China not only with the China Mobile launch (Feb?) but also the stellar growth at China Telecom & China Unicom.. China is where the real game is now being played for Apple Management. If Apple can get govt buy-in (CHL included) then they're in Tremendous shape for years to come.
Analyzing Proposals To Spend Apple's Cash [View article]
Let me clarify my thinking. There is occurring a transition of Apple shareholders from growth funds to now include value funds. This transition needs to be looked at from 1 yr ago vs today. This transition was/is inevitable as companies fulfill their growth potential and mature. Apple has now added a dividend and this dividend will grow over time (todays payout ratio is near 25%). The valuation of Apple in the future (as the percent of value funds grows) will be as much or more due to the dividend payout as their growth. The higher the dividend, the more value funds and the greater % of those value funds will be investing in Apple. Value Funds are significantly larger than growth funds if you look at the market in its totality... Considering pension funds and other big money funds which require less risk this is clear. The dividend provides a floor to a stock if growth slows, growth funds exit when this occurs.
So, my assumption was certainly not incorrect and the PE of Apple (like many, many other companies) has seen a compression of late. It is not the compression that is important over time, it is the dividend yield. If you have a shorter term investing horizon (say a year or two) then you can ignore the dividend but if you are a long term investor the dividend matters much. Over the course of the last 80 years, dividends have provided as much return to shareholders as has stock appreciation/depreciat...
As far as the professionals not believing in the future prospects of apple, that is certainly not the case as they've got $1/2BB invested in the stock. It's more about minimizing their risk. Almost no "professional" would say they do not believe in Apples future, but many would certainly say the upside risk vs the downside risk is becoming less favorable as Apple is required to continue to dominate when it's competitors and governments are all working to prevent market dominance.
Analyzing Proposals To Spend Apple's Cash [View article]
Though I wish it were not true, the Apple buybacks over the course of 3 years will only cover the employee stock plans. Hindsight is 20/20 but I would have to imagine Apple management a year ago knew earnings would be unimaginably good given the upcoming product launches and the unquenchable appetite in China, China, China.. Thus, they should have been buying back shares last year. This would have improved the 1.8% dividend return to 2.5% for the same $10BB payout and $600 stock price. Too bad for the long term investors such as myself.
Additionally, I realize they would have only used the US cash unless they wished to repatriate non US earnings and pay taxes first. Regardless, share buybacks should occur when the stock is clearly undervalued as Apple was last quarter with a FPE under 9.0... No need to wait longer when the price is higher to make big buybacks and thus follow the wasteful path of Cisco, Microsoft etc...
Why Amazon Shareholders Will Not Realize Apple-Like Returns [View article]
Amazon is a distributor and a good one at that. But, distributors of others goods do not justify these lofty multiples for decades. Additionally, in the future I expect that Amazon will be required to start shelling out sales tax like all storefront companies in America. This change will narrow their advantage over the likes of Walmart.
CMG's $100M Buyback... Seriously, Why Bother? [View instapost]
CMG's $100M Buyback... Seriously, Why Bother? [View instapost]
I agree with Delta_V above. They seem to be keeping the number of shares consistent on a year to year basis. This employee enrichment activity is exactly what Apple announced in their recent $3BB buyback over multiple years. It is amazing to me that these companies were not willing to reduce the number of outstanding shares. You would think that the Board's might be aware of the stunning growth and that much higher profitably was a given.. they also in Apples case would have known of the increasing pressure from pension, mutual, hedge funds for a dividend increase... and that regarding Dividends it is the yield that counts (not the $size of buyback). Apples Dividend with the same monster $10BB dividend announcement should have provided a yield 4% and not 2.5%... That only would have required buying back stock 1 year ago with cash they had available... This "wait till the stock is higher" to start the buybacks is mind numbingly shortsighted. Just call me annoyed with BOD's who clearly are on the side of employee enrichment vs their fiduciary duty of taking the right steps for the company owners (shareholders).
BV
A Value Investing Approach To Microsoft [View article]
Appreciate your feedback. I'll let you know what I found out from Microsoft investor relations. Have a great Holiday weekend!
Nokia: A Niche Play At Best [View article]
Nokia: A Niche Play At Best [View article]
Alternatively, according to Apple's christmas quarter: http://bit.ly/HlWnwd iPhone sales exceeded $24BB. 2% of that would be almost $1/2BB dollar. The above $37mm you are quoting sounds more like the number of units they sold (37mm) in the quarter, not $$.
Also, I too believe that the combined Nok/Msft effort on Lumia will be successful when considering the global rollout. See: http://bit.ly/HdYuzE
but I certainly don't think this takes away from what Apple has, which is one hell of a great stable of products & ecosystem that has a customer satisfaction rating +90% (read repeat customers) to die for.
A Value Investing Approach To Microsoft [View article]