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J. M. Manness  

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  • Apple Dividend A Likely Possibility [View article]
    You make some good points here on opening up to institutions that require dividends. Very good point.

    But for the split, fauxscott points to a psychological effect. Clearly 1 share at $400 is the same as 10 @ $40. But if one is just getting started in investing and have $1200. the thought of owning 3 shares is not very satisfying, but owning 30 share (or even 10 @$120) - that *feels* like something. So I agree with him there. I would love to see a split down to $50 range.
    Dec 10, 2011. 01:10 PM | Likes Like |Link to Comment
  • Apple Dividend A Likely Possibility [View article]
    Follow up.

    My comment above still begs the question as to whether to not they will or should return money to investors either through a dividend or share buyback.

    Here, any speculation as to whether Jobs would have or not is entirely irrelevant and frivolous. The real question is this:

    "Given Apple's stated objectives regarding cash - is it likely (or at least reasonable to conjecture) that a change in policy is imminent?"

    Here I think there is, indeed, hope. The growth of cash has not only continued but accelerated, and at some point it will reach a level at which no reasonable person can further justify accumulation. EPS could very easily reach $50 annually in a couple of years, perhaps over $60. (Calendar year 2011 EPS should be over $30). That equates to roughly $50 B added to the cash hoard. At some point this becomes pointless.

    Will a distribution affect share price? Possibly, but possibly not. The existing cash does not seem to impact the current price. Lets look at some figures below - they indicate that at currently the ttm PE ratio = 14.23. If we back out cash we get a PE of (roughly) 11.34. Pretty pathetic number here.

    Even worse going forward where the (P - cash)/E is 10 - possibly lower.

    At these figures, it seems clear that cash on hand is not a significant player in the current price. So it is possible a dividend would have no negative effect, perhaps a positive effect. A share buy back would definitely have a positive effect.
    Apple notes: 10 Dec 2011

    EPS (ttm) = 27.68
    price: 394
    cash =~ 80B =~ 80/share
    Price - cash =~ 314

    pe = 14.23
    pe - cash =~ 11.34

    Looking forward, assuming approximately $10
    current avg estimate is $9.79
    (Asymco estimates $12.30)

    YTD EPS = $21.52

    CY eps =~ $31 (est rounded)

    cy PE @$400 = 12.90
    Cash after CQ4 $10 = $90B =~ 90/share
    price @400 - 90 = 310
    PE (CY2011 est) - cash =~ 10.00

    (Note "=~" means equals approximately)
    Dec 10, 2011. 01:01 PM | Likes Like |Link to Comment
  • Apple Dividend A Likely Possibility [View article]
    Simplistic article.

    First - Apple has $26B in cash but also a total of roughly $80 in cash + "cash equivalents"

    Jobs ego - undoubtedly he had. He ignored the investors and analysts and (especially the pundits). True. He focused totally on his vision of producing the best, well made, easiest to use must beautiful examples of technology. His ability to ignore all that external noise is one of the keys to Apple's success. (Imagine if he had listened to the all those who ranted "the iMac is a toy, the iPod will fail, Apple stores will never succeed, the iPhone will flop, the iPad is just an overgrown iPhone and never will sell")

    The supposition that he got so much ego boost merely from the accumulated cash seems rather arrogant.

    Most importantly however is the statement "That 26 billion dollars is earning fairly close to nothing as is." This is particularly naive. You totally ignore what Jobs himself said on the topic "We have uses for that cash." That cash is used in a variety of ways that are not traditional in a company ("not traditional?" what a surprise form Apple! [flippant])

    Among the uses for the cash is to invest in production capacity in new technology, everything from the unibody milling machines to displays, to batteries, to RAM. This has to be a priceless investment that has allowed the iPhone and iPad to surge forward. Even WITH all these investments they were not able to fully meet demand. But they have been able to assure themselves both supplies at good prices for parts that would otherwise be in low supply, sometimes affectively edging out the competition. Therefore that money is - indeed well invested.
    Dec 10, 2011. 10:53 AM | Likes Like |Link to Comment
  • An Open Letter To Tim Cook, CEO Of Apple Incorporated [View article]
    While I support a dividend or buy back, I think the letter is silly. Apple has always been a company that ignores stockholders and analysts. They really do not seem to care much about the stockholder at all. It is a large reason for their success. By so doing they have been one of best investments ever.

    I continue to be a big fan of their products (ever since the original Mac 128K showed up in University labs), but I also would like to see my investment grow.
    So, I would like to see some return of equity to the shareholders. It seems to me that the cash has no effect on the share price, because when you take it out the P/E becomes absurdly low. There seems to be some market force at work keeping it down (it was reported that Fidelity sold some 48M shares over the last quarter) so any reduction in cash by a dividend will not likely drive the price down, but more likely increase the price.

    So a dividend plus a share increase would both be good for me. But I certainly do not expect it. Nor am I complaining about how they are running the company.
    Dec 8, 2011. 10:13 AM | 2 Likes Like |Link to Comment
  • Apple's Growth Makes It The Perfect Value Stock [View article]
    Was it an interesting comment?

    I never read all caps. It hurts my eyes.
    Dec 7, 2011. 03:17 AM | 1 Like Like |Link to Comment
  • Who Do Apple Directors Work For? [View article]
    I AM a shareholder - albeit a small one.

    To me Apple has done a fine job of increasing value. Now that the cash has reached the level of enormity, I would like to see some returned to shareholders either via dividend or repurchase (which would avoid taxes).

    However - I am not whining about it. I am not complaining that they need to change their policy. When you buy this stock you ought to know in advance they have a long history of no dividends. If you are not happy than don't buy in or sell your shares. Just don't try to tell the board what they OUGHT to do!

    I would like a dividend, but I aint complaining! :)

    (aside) In particular I think a dividend would be nice since the cash hoard does not seem to affect the share price in the least. The PE is absurdly low even when cash is ignored. But lets face it... Apple management has never run the company to satisfy the stockholders. That is one of the keys to their success!
    Nov 30, 2011. 11:14 PM | 2 Likes Like |Link to Comment
  • The Apple Bubble Is Ready To Burst [View article]

    This guy is very funny! Everything he says is completely the opposite of reality (except that Jobs has died.)
    Nov 29, 2011. 02:36 PM | 9 Likes Like |Link to Comment
  • Reasons Why Apple Shares Are Poised To Reach $800 [View article]
    Of course what you say is true. But think about the really small investor, perhaps someone just starting out in investing. He wants to put in $1200. At $40 he gets 30 shares. He feels he has something. At $400 he can buy 3 shares. It is all the same financially, but psychologically it is very unsatisfying.
    Nov 24, 2011. 10:37 AM | 1 Like Like |Link to Comment
  • Why Apple Needs To Buy Back At Least $4.5 Billion Per Year [View article]
    Distribution or buyback, Apple now has more than enough cash for any conceivable purpose. What company could it buy with that much cash that is making the margins it is? (What - is it going to buy Samsung?)

    Therefore, it should return excess capital to the investors one way or the other.
    Nov 23, 2011. 03:43 AM | Likes Like |Link to Comment
  • Apple's Research And Development Advantage [View article]
    Apple gets more "Bang for the buck" because they know how to focus. They know how to decide early on what it is they want to do and then work on those limited programs.

    This may have come from the days when they were struggling and had to pick their projects very carefully. Whatever the cause, their performance is stunning. I have yet to see where they have been "blind sided" by anyone else!
    Nov 22, 2011. 12:47 PM | 2 Likes Like |Link to Comment
  • Can Google Break $700 Before Apple Hits $500? [View article]
    Well said. But you make one small error.:
    "Now in the last 4 quarters Goog average beat has been 7.6% apples has been 16.7%."

    I don't know about GOOG, but for Apple there is always a mad rush be analysts to up their estimates just prior to earnings release. If we were to calculate the "beat" according to what analystes predicted half way into the quarter, I think you would find it to be much greater. This would put Apple closer to $12.

    All speculation now - of course. But then that is what investing is, speculation on the future value.
    Nov 8, 2011. 10:37 AM | 1 Like Like |Link to Comment
  • Apple: Imagine There Was No Macintosh [View article]
    I would like to add… The author states:
    "If you believe Apple has control over basic smart phone technology, then no one can compete with it until the late 2020s."

    That is not true at all!! It is a total exaggeration of the situation. Apple does not have "control over basic smartphone technology" only over very specific functional elements. Competitors are free to develop smartphones that do not use these specific elements. They may not function as well as the iPhone, but that is their problem. They have a right to invent their own ways of doing things. They just have to do it themselves.
    Nov 3, 2011. 01:08 PM | 1 Like Like |Link to Comment
  • Apple: Imagine There Was No Macintosh [View article]
    So you are suggesting that companies that invest time and effort and resources into innovating should not have any protection for their work?

    Are you suggesting that Samsung should also give up all its income from licensing their IP? Or should only Apple give away their innovations?
    Nov 3, 2011. 12:56 PM | 1 Like Like |Link to Comment
  • Apple: Imagine There Was No Macintosh [View article]
    @ KPO'M
    I agree 100%. The author is either very naive or duplicitous here. He is either ignorant of the fact that Apple paid for the rights to the technologies from PARC, or purposefully ignores them.

    He also ignores all the incredible changes that Apple made to what they saw. In short - he seems to have an axe to grind. It is one thing to have an opinion about things, it is another to totally disregard the facts.
    Nov 3, 2011. 12:52 PM | 1 Like Like |Link to Comment
  • Why The Netflix Death Spiral Is Imminent [View article]
    This outlines financial aspect of "death spiral" but there is a psychological aspect as well:

    Comments welcome at the blog.
    Oct 25, 2011. 11:19 AM | Likes Like |Link to Comment