Amazon's (AMZN) Q1 Y/Y paid unit growth was 30%, the company discloses in its CC; that's down from Q4's 32% and Q3's 39%, but still above rev. growth of 22%. 3rd-party sellers (some of them upset over fee hikes) made up 40% of unit sales vs. 39% in Q4 and 41% in Q3; they've been a major source of gross margin growth. Digital content sales growth slowed down, leading physical units to rise over 300 bps Y/Y as a % of total units. Forex expected to have a 275 bps impact on Q2 rev. growth. North America had a $457M op. profit in Q1, international a $16M op. loss. Active customer accounts rose to 209M+ from 200M+ in Q4. AMZN now -3% AH. (Q1: I, II) [View news story]
Technically, it's all the profit/losses that aren't generated by core operations. It's designed to help investors understand how core activities are doing.
Samsung Electronics (SSNLF.PK) says its Q1 profit rose 42% to a record high on strong smartphone sales. Net profit rose to a record KRW7.15T ($6.4B), up from KRW5.05T a year earlier. Operating profit rose 54% to KRW8.8T from KRW5.7T. Sales rose 16.8% to KRW52.9T from KRW45.3T, coming in in line with the company's guidance of KRW51T to KRW53T. The results stand in stark contrast those of Apple (AAPL), which earlier this week reported its first profit drop in a decade and forecast margins to decline in the current quarter ending in June. [View news story]
Just a few things to note. Please drop the "why does everyone buy Samsung, they're not American" whining. We're in a highly globalized economy in which businesses compete with each other; often, by mimicking each others' products.
It's true that Samsung has piggy backed off Apple, but complaining about it is fruitless. As an investor, look at the cash flow prospects of an investment and its ability to generate consistent returns. I'm long Aapl, but I also believe Samsung is a great investment as well. They've been able to capture markets Apple had missed (with the phablets) and continue to take Apple's market share due to management's stubbornnes to extend their iPhone product line.
Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
Omer, that is true. I was being conservative with the 3.5%-4% yield, which would be indicative of a 20-30 year time horizon. At 10 years, they can likely issue debt for only 2%. Given an effective tax rate of 25.2%, they'll actually only be paying only 1.5% interest (given the tax savings).
They can easily issue $100b in debt and bring down the outstanding shares by 25%.
Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
Apple should just issue $50b-$100b in debt/preferred shares at 3.5%-4% interest, which is tax deductible, and buyback shares with those funds. They can easily pay back the debt within a few years, given their ability to generate tremendous free cash flows; even if revenues decline. This is a much cheaper alternative than repatioting income at an additional 35% tax.
Once the U.S. realizes how desperate our federal deficit is, they'll eventually create a tax holiday for U.S. corporations to repatriate their offshore funds. After this occurs, Apple can then permanently increase their dividends. They're currently bulwarked with the 35% repatriotization tax, which makes any idea of transferring back international funds fruitless.
Until U.S. corporations, like Apple, can bring back their "permamently reinvested earnings", we won't be experiencing the significant dividend hikes most investors are anticipating. The cost is simply too much.
Amazon's (AMZN) Q1 Y/Y paid unit growth was 30%, the company discloses in its CC; that's down from Q4's 32% and Q3's 39%, but still above rev. growth of 22%. 3rd-party sellers (some of them upset over fee hikes) made up 40% of unit sales vs. 39% in Q4 and 41% in Q3; they've been a major source of gross margin growth. Digital content sales growth slowed down, leading physical units to rise over 300 bps Y/Y as a % of total units. Forex expected to have a 275 bps impact on Q2 rev. growth. North America had a $457M op. profit in Q1, international a $16M op. loss. Active customer accounts rose to 209M+ from 200M+ in Q4. AMZN now -3% AH. (Q1: I, II) [View news story]
Samsung Electronics (SSNLF.PK) says its Q1 profit rose 42% to a record high on strong smartphone sales. Net profit rose to a record KRW7.15T ($6.4B), up from KRW5.05T a year earlier. Operating profit rose 54% to KRW8.8T from KRW5.7T. Sales rose 16.8% to KRW52.9T from KRW45.3T, coming in in line with the company's guidance of KRW51T to KRW53T. The results stand in stark contrast those of Apple (AAPL), which earlier this week reported its first profit drop in a decade and forecast margins to decline in the current quarter ending in June. [View news story]
It's true that Samsung has piggy backed off Apple, but complaining about it is fruitless. As an investor, look at the cash flow prospects of an investment and its ability to generate consistent returns. I'm long Aapl, but I also believe Samsung is a great investment as well. They've been able to capture markets Apple had missed (with the phablets) and continue to take Apple's market share due to management's stubbornnes to extend their iPhone product line.
Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
They can easily issue $100b in debt and bring down the outstanding shares by 25%.
Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away. [View news story]
Once the U.S. realizes how desperate our federal deficit is, they'll eventually create a tax holiday for U.S. corporations to repatriate their offshore funds. After this occurs, Apple can then permanently increase their dividends. They're currently bulwarked with the 35% repatriotization tax, which makes any idea of transferring back international funds fruitless.
Until U.S. corporations, like Apple, can bring back their "permamently reinvested earnings", we won't be experiencing the significant dividend hikes most investors are anticipating. The cost is simply too much.
3 Undervalued, High-Yielding, Solvent Investments [View article]
CXS is down 0.0015%
HLCP is up 5.25%
SB is up 33.42%
The S&P 500 is up 2.77% during the same time period.
Also, to disclose, I've recently sold out of my position in SB at $4.80.
3 Undervalued, High-Yielding, Solvent Investments [View article]
3 Undervalued, High-Yielding, Solvent Investments [View article]
Here's the link: http://bit.ly/12ErAWp