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Timothy Phillips

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  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    Wiesje - Do you think they can spend $137B + the additional $42B they will add this CY (current dividend will only remove about $10B of that). They currently spend $3.3B/yr on R&D. There is no amount of R&D or reasonable acquisition that can integrated and add value that come anywhere near that $169B by year's end. A lower stock price does have an impact on key employee long-term comp, and a company does have to be careful that they do not lose key people to another company (like Goog or AMZN) being able to offer a much better package due to the stock value.

    Apple is an awesome company, but yielding 1% on the cash does shareholders no good. I am sure they will get a better return on investment buying their stock. If they do what I recommend here, they will return an additional $110B to shareholders by year end, and have $59B in net cash remaining for acquisitions and funding of new growth in operations.
    Mar 8 11:51 AM | Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    As I wrote earlier, doubling the dividend should drive the stock to at least $605 (3.5% yield). I like the buyback combined with the dividend becuase it lowers the share count, and thus lowers the increase in Q div payout and div ratio substanbtially.
    Mar 8 10:35 AM | Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    They are growing 2x S&P average company revenue growth (not the multiple).

    You are not considering the impact on the share count with the buyback on the dividend payout ratio. They can remove about 19% of the shares, thus a doubling of the dividend only increases payout by 62%, and EPS will jump by 19%. That makes FY13's $44.53 EPS translate to $54.98 if the buyback was completed.
    Mar 7 07:33 AM | 1 Like Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    XRTrader - I had that in the initial article and pulled it out ... it is actually better than that, as you can assume the average price would be about $550 of buyback, meaning 182M shares .. that reduces sharecount by 19%. That means that a doubling of the dividend only increases payout by 62%, and earnings/sh go up 19%. NIce bang for the buck (that is why in the article I state that payout will only be 40% of FCF).
    Mar 7 07:27 AM | 1 Like Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    I agree J. Smith - AAPL has to show the street it will support its stock when there is trouble .. they have the means to do it, and sometimes just the threat of something like I am talking about (massive buy-back or dividend hike) will keep people from speculating and keep them from being predatory on shareholders. This is IR 101, there has been no reason to let certain investors take this down.
    Mar 7 07:22 AM | 2 Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    Buy backs offer value by using excess cash to reduce the float and increasing earnings growth per share. If they could deliver a bigger return by either investing in the business for future organic growth or by making a synergistic large acquisition, I would be all for it. But without out, they just killing ROA and missing an opportunity to deliver faster EPS growth.
    Mar 6 09:11 PM | 1 Like Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    Raincity - my point is that they don't have to ride the waves - they are the one company that have their cake and eat it to.
    Mar 6 09:06 PM | 1 Like Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    JPS, I figure the dividend alone could help push the stock to $605, as that would be the 3.5% dividend point. Income investors love to buy large caps with dividends above 3.5%.
    Mar 6 07:37 PM | 2 Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    whiff - exactly my thoughts. too easy, and we all make money, and hopefully get a little mojo back in the stock.
    Mar 6 07:12 PM | 2 Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    I had the same thought - Einhorn being so aggressive may have bruised Cook ego, and now NIH attitude will take over. Let's hope Mr. Cook is more pragmatic than that.
    Mar 6 07:11 PM | Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    Way, way too much money. The deal would need to be on the order of 12-15x larger than the biggest deal in history ($44.4B for TXU in 2007) for shareholders to approve.
    Mar 6 07:05 PM | Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    The run up last year was not irrational .. they were trading at 13x forward earnings .. AMZN and CRM are irrational. Apple is worth $700. Having the stock trade where it is (P/E less than 9), is not only unnecessary it is unhealthy - it creates additional dilution in stock compensation, lowers acquisition flexibility, and most importantly can lead to employees leaving due to lower compensation than what comp is offering.

    If you believe your stock is cheap and you have too much cash - why wouldn't you buy it back? .. no one knows better than the company what their stock is worth (they know the roadmap). By not buying back, they are telling the world they are not worth more than $420.
    Mar 6 06:56 PM | 14 Likes Like |Link to Comment
  • Apple Has The Cash To Drive Its Shares Back To $700 [View article]
    They can go get capital at very low rates in the markets and then pay it back once there is a repatriation holiday.
    Mar 6 06:48 PM | 1 Like Like |Link to Comment
  • Diamond Turnaround Coming [View article]
    Let's not get too excited yet, still a lot to accomplish in this name.
    Mar 6 04:16 PM | 1 Like Like |Link to Comment
  • Diamond Turnaround Coming [View article]
    HI Jim,

    The numbers I used in table are gross retail sales, DMND management tells me retail margin on average is about 35%, so the $1.26B / 1.35 = $933M. The Emerald line was for snack nuts only (footnote), so that number is understated ... even with all of that, we are probably talking about sales in excess of $950M for TTM, which would place Q4 at ~ $260M at least ... which is well above the $239M consensus (+ 9%). That would be a great quarter, and stop the Y/Y declines.
    Mar 4 04:10 PM | Likes Like |Link to Comment
COMMENTS STATS
421 Comments
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