Apple's Earnings Fall Is Completely Unjustified [View article]
They said 500 will never happen again at 705. I am sure we are going to see Gundlachs 420. The management has to buy back hand over fist if the price has to holdup and Apples track record of aggressive buyback is non existent. All that cash piling up does not help shareholders anyway.
Dear Apple Board, This Is How You Defend The Share Price [View article]
You are 100% right. Apple has done nothing to deserve such crappy valuation but for total antipathy of management/board. If I were Tim Cook I would take a torch down to NYSE to burn the short term investors, option speculators and initiate a massive buyback never before seen to the tune of 50 bn dollars.
If Apple Isn't Investing In Apple, Should You? [View article]
Apple will not invest in any stock because their strategy for cash investments is ultra conservative. Their return on cash net hedging for 2013 would come at less than 2% because they want to protect capital. Apple would not invest in conedison which I think is the most conservative, non volatile stock investment there is leave alone AAPL.
Betting On Apple's Operations Team And Gross Margins [View article]
The sales number on Iphones dont seem to agree with your argument. On top of that people have nothing to lose when they upgrade eventhough the upgraded feature set might not blow you out. I upgraded my 4 to a 5 for 250 dollars and sold my 4 on ebay for 250 bucks. I get a better phone with 0 out. Sounds like a winning proposition for Apple.
The Real Truth About Apple's Q4 Results [View article]
Gary.
I have a question on the OI and E income for of $381 mn project by PO for Q1.
Is this income the retun that they generate on their cash investments net charges for hedging? If that is the case it looks like a lousy return to me at less than 1% a year. Am I missing something?
Betting On Apple's Operations Team And Gross Margins [View article]
Great Article Gary. This is one of the well thought out and reasoned article I have read on Apple lately. I have highlighted the reasons why low gross margins have no persistence and will return to 40%+ level
1. The average of Gross margin beat over the last 8 quarters comes to 300 bps. If we apply that we are at 39%. If we apply the GM beat for Q1 over the last 2 years we are at 40+%.
2. Iphone 5 yields have tremendously improved and low yields at the beginning of the quarter when PO guided is no longer an issue.
3. Lower priced product does not mean lower margins for the company. The whole myth that Ipad mini is going to pull GM down is a myth. Even if Ipad mini comes in at 30% GM there are other product lines like Itunes and Iphones which have much higher GM. A smaller product like Ipad mini dragging the entire margins down is an outright lie.
4. Economies of scale for Iphone. I remember when PO made the point that the economies of scale for Iphone are tremendous. The moment they go past 30 mn phones the GM grows at a much faster clip than it did for the first 30 mn phones.
Another point to be noted in general is that 35% margins in the long run is not a bad margin for a company trading at 9 times earnings without cash. Even if Apple grows at 20% over the next 5 years and we assume our margins go down to 35% we double our earnings in the next 5 years along with a cash pile atleast double of where we are currently. The stock is not trading like one with 35% GM growing at 20%. It is trading like the GM is 20% and the company is not growing
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
They can definitely get creative with this. If the 80 bn abroad is making around 4% a year, I am sure they can issue recallable bonds using cash outside USA as collateral for the same amount over a longer period for few bps more. This way you have literally swapped your foreign cash for domestic ones.
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
I still think the Buyback and Dividend are small. I don't see any situation where Apple needs more than $100 bn in cash. Apple should have a policy to distribute anything net of 100 bn in cash to shareholders in the form of dividends and buybacks. I feel more strongly about buybacks. They harassed the share all the way to 505 and this would not have happened had there been a much more robust buyback program.
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
If Apple were to do a massive takeover they could do it in a flash. 20% as part of the market-cap is not much and people who need more than 2% return from a companies cash pile should rather invest in an MLP.
Very true but the same call writers will run scrambling and buy the calls that they wrote if AAPL starts moving up on holiday news. These call writers are probably up huge and would want to protect their upside instead of getting slaughtered
It is a shame that this trades at 518 as I am typing. 11.8 time trailing and 8 times FY 2013 when you subtract the cash. Apple is trading at a lower multiple than Alcoa. That says it all
Apple's Earnings Fall Is Completely Unjustified [View article]
Dear Apple Board, This Is How You Defend The Share Price [View article]
If Apple Isn't Investing In Apple, Should You? [View article]
What Wal-Mart's Promotion Of The Apple iPhone Means For Both Companies [View article]
Betting On Apple's Operations Team And Gross Margins [View article]
Betting On Apple's Operations Team And Gross Margins [View article]
"Have you noticed how the bulls offer facts and the bears offer nothing but opinions, innuendo, Job's absence and the "law of large numbers?""
The Real Truth About Apple's Q4 Results [View article]
I have a question on the OI and E income for of $381 mn project by PO for Q1.
Is this income the retun that they generate on their cash investments net charges for hedging? If that is the case it looks like a lousy return to me at less than 1% a year. Am I missing something?
Betting On Apple's Operations Team And Gross Margins [View article]
1. The average of Gross margin beat over the last 8 quarters comes to 300 bps. If we apply that we are at 39%. If we apply the GM beat for Q1 over the last 2 years we are at 40+%.
2. Iphone 5 yields have tremendously improved and low yields at the beginning of the quarter when PO guided is no longer an issue.
3. Lower priced product does not mean lower margins for the company. The whole myth that Ipad mini is going to pull GM down is a myth. Even if Ipad mini comes in at 30% GM there are other product lines like Itunes and Iphones which have much higher GM. A smaller product like Ipad mini dragging the entire margins down is an outright lie.
4. Economies of scale for Iphone. I remember when PO made the point that the economies of scale for Iphone are tremendous. The moment they go past 30 mn phones the GM grows at a much faster clip than it did for the first 30 mn phones.
Another point to be noted in general is that 35% margins in the long run is not a bad margin for a company trading at 9 times earnings without cash. Even if Apple grows at 20% over the next 5 years and we assume our margins go down to 35% we double our earnings in the next 5 years along with a cash pile atleast double of where we are currently. The stock is not trading like one with 35% GM growing at 20%. It is trading like the GM is 20% and the company is not growing
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
Apple May Be Worth $1111, But Shares Won't Get There Anytime Soon [View article]
Apple May Finally Be Turning A Corner To The Downside [View article]
My 4-To-1 Bet On An Apple Rebound [View article]
My 4-To-1 Bet On An Apple Rebound [View article]
Apple Offering Excellent Entry Point [View article]