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Wim Lewi

 
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  • Why Analysts Missed The Apple Correction [View article]
    You are right that the fiscal uncertainty has accelerated the recent selling pressure. Despite the correction, the stock is still up 30% ytd.
    With the sentiment now deflating and if the December quarter is OK, the stock could recover above 600 again. Dividend speculation can also help sentiment, but in fact that does not add any value to the share price. My forecast of 500 USD is a 12 month target and the share can reach a 30% range around that level, based on the sentiment and market machinations.
    Dec 8, 2012. 06:04 AM | 2 Likes Like |Link to Comment
  • How Dell Will Escape The Value Trap [View article]
    I guess money is cheap, so anything goes, but unlikely that Michael will agree.
    Dec 3, 2012. 05:30 PM | Likes Like |Link to Comment
  • How Much Profit Will Amazon Eventually Make? [View article]
    You hit the nail on the head. I try to explain that it is by no means a tech company. If you believe that the Kindle will force consumers to shop with Amazon, you underestimate the browser skills of the US consumer. The Kindle is another example of an unprofitable business model that boosts sales, but leaves nothing for the bottom line. At least Google invented adwords and lets people bid up for their platform. AWS is a sideshow and is easier to monitise by Goog again. I see very little synergies with the consumer durable retail business. But I can be wrong. Just like in 2001, the bottom fell out of the topline models that traded 20x sales for no profit. Companies offered vague internet services that would bankrupt MSFT, etc... Remember Razorfish, Freeinternet.com, ....
    Dec 3, 2012. 12:48 PM | 1 Like Like |Link to Comment
  • How Much Profit Will Amazon Eventually Make? [View article]
    I find it bizarre, because it is not a profitable business model at this moment. Anybody can grow, while selling at a loss. If the market lends money to Greece or Portugal, it wants higher interest rates because they burn the money. Nokia has 3 bln in net cash and gets a B- (vs an A- for AMZN), they also don't make a profit. The rating agency makes a call on the profitability prospects of AMZN. That is not their job. They should judge the current cash generation and make a judgement whether it generates enough cash to pay back the loan. In fact the loan is burned in 3 quarters and profitability is not in any guidance of the company. The saying it is better to travel than to arrive, is pushing this stock higher. THat cant last forever.
    Nov 30, 2012. 01:37 PM | 5 Likes Like |Link to Comment
  • The Biggest Threat To Apple's Sales Estimates [View article]
    Amazing how much hate exists against people that write negatively about Apple. I understand now why analysts keep upgrading their target to stay ahead of the share price. Over the last 4 years the AAPL consensus target price has been around X times 1.2, where X stands for the share price. At 100 USD, the target was 120 USD, at 500, the target was 600 and at 700, they jumped to 1000 USD. These guys are still talking up their targets on TV and hope there are enough retail clients to bail out their fee paying institutional clients. It is unlikely that there are enough iPhone believers to bail out the huge stock overweight at mutual and pension funds.
    Nov 15, 2012. 12:18 PM | Likes Like |Link to Comment
  • The Biggest Threat To Apple's Sales Estimates [View article]
    In Technology, ASP's decline, unless you have a near monopoly, like MSFT has in PC OS, but the market is shifting to tablets. Apple innovated massively with the iPhone, but has by no means a near monopoly, ASP's must decline much further to defend market share. That is exactely what Apple already did when it introduced the iPad mini. I obviously don't know what an iPhone mini will look like, but it must be a lot cheaper to keep up with Android. I am not against Apple products, but I believe there are unrealistic market expectations that are based on extrapolation, rather than bottom-up analysis. I also note a lot of bullishness based on the amount of people in the local Apple stores. That is drop in the ocean in terms of global smartphone unit sales. Since the shares have corrected, more analysts are shaving their numbers. It should actually be the other way round. In fact, the stock fell so fast that there is only 7% left on my target. I have covered my short position completely and expect the shares will recover to 650 USD on bullish sentiment returning. That will give another opportunity to short them. It will take at least 12 months before analysts will pick up a severe ASP decline trend.
    Nov 14, 2012. 04:19 PM | Likes Like |Link to Comment
  • More on Apple's FQ4: FQ1 guidance is for revenue of $52B and EPS of $11.75, below a consensus of $55B and $15.41 - guidance is typically conservative, but the EPS figure indicates margin pressure. iPhone sales above expectations, but iPad below lowered estimates. Gross margin was 40%, down 280 bps Q/Q and 30 bps Y/Y. Exc. retail, Americas revenue +43% Y/Y and Japan +113% (higher than FQ3), but Europe just +8% and Asia-Pac +15% (lower than FQ3). Retail +18%. AAPL still halted, to resume trading at 4:50PM ET. CC at 5PM. (webcast). (PR[View news story]
    I am surprised the Gross margin fell that much, despite the iPhone mix improvement. This implies that the margin decline on the iPad was even worse than I expected. AAPL should be clearer on its product margins and give detailed product margin expectations. Now the market will be confused and might make it worse than it really is. My 12 month target of 500 USD of 3 week ago is getting closer, but much faster than I anticipated. http://seekingalpha.co...
    Although the scenario is slightly different. I was hoping for a bounce on OK'ish numbers and increase my short. There has been a lot of negativity into the numbers. I believe there will be more negative margin news in the quarters ahead. I noted analysts on CNBC were already spinning the story that it's the supply chain troubles, the backorders, etc... Hopefully they can inflate the balloon once more.
    Oct 25, 2012. 04:57 PM | Likes Like |Link to Comment
  • Verizon's iPhone Sales, comScore Data Portend Strong Apple Results [View article]
    Does it matter wether AAPL beats the consensus tomorrow ? They have always guided very cautiously and analysts have left the bar low enough for their favourite stock to shine and beat by a large margin. I see that you correctly state that the gross margin declines. This obvious trend will continue in the next couple of quarters and years. The mini price point is surprisingly high as it needs to slow down the margin decline. This will cost market share. There is no innovation in the mini, it is the same product, only smaller with the chip of the iPad2. The iPad will eventually make 25% gross margins.
    Oct 24, 2012. 03:38 AM | Likes Like |Link to Comment
  • Top 10 Pick: Amazon Financials Understate Growth [View article]
    Arne,
    You have a point on the historic growth track record. But, I miss any reasoning on why it is cheap. You point to a trillion USD market and state that it is unsure how much they can capture. How much do think they will grow, how much margin will they make and how much will they invest to get there ? Is there anything left for investors. Anyone can grow, but make a return on investment above the cost of capital ?
    You can sell Kindles below cost, but when consumers use it to order at the future Walmart e-shop. All you have done, is sunk the AAPL iPad margin.
    Oct 24, 2012. 03:15 AM | 1 Like Like |Link to Comment
  • Nokia: Bad News Without End [View article]
    Joel, all you write is true. There is more bad news to come on symbian in Q3-market shares as the few consumers that buy WP will now wait for WP8. But, what I miss in your article is wether we should buy or sell Nokia on that ?
    The network business is selling 14bn annually and made a non-IFRS margin of 9%. If they make 7% IFRS EBIT margin and you put that on 7x EBIT, you already have the current Nokia market cap. They can use the 3.6bn in cash to rightsize the company and make 8% margin on a downsized phone business of 10 bln in sales. Navteq is worth probably 0.5x sales. That means that even if you are right and WP8 will be a disaster for Nokia, the stock will double. If you are wrong and WP8 can convince 25% of the symbian installed base to upgrade to WP8, the stock will triple. Switching now to Android is suicidal, Nokia will never get a hardware edge on Samsung, even Apple struggles with this. Nokia needs to differentiate and offer a third flavor with a potential 8-10% market share. I agree they should have switched to Android long ago, but that is a mistake made before appointing Elop. http://seekingalpha.co...
    Oct 21, 2012. 02:53 PM | 1 Like Like |Link to Comment
  • Why The iPad Mini Will Benefit Apple's Gross Margins [View article]
    Mathias, Thanks for elaborating further om the gross margin iPad theme and the iPad mini in more detail. I did not do much work on the mini as I found little facts on BOM and retail price at the time. I am not sure wether the retail price is fixed yet. In fact, if the retail price is only 249 USD, the GM will be only 31% and not 58%.
    I agree that with 299 USD, the GM will rise again, but in that case the units sold will decrease. My whole argument is based on the fact that the differentiating factor of software innovation wears of as touch screens and apps become common features. In that sense, the mini is a defensive move that AAPL needs in order to maintain a 65% tablet market share. At 249 USD they will keep the Market share, but give margin away. At 299 USD, it will be vice versa. It is typical for a momentum play like AAPL, that analysts take best case scenario's for all variables. Exactely 'when' the market will price in the lower margins, I do not know. Maybe it has started already and will this trend be visible in the next results. Most likely, it will take another quarter or 2 before analysts capitulate., The stock might rally in the mean time. I have enough patience to wait a couple of quarters, there is 0% risk that a Bid on Apple will destroy my short. It do not believe I will have to wait 3 years. Anyway, thanks for the detailed analysis, I am also a big fan of crunching numbers.
    Oct 20, 2012. 06:49 AM | 1 Like Like |Link to Comment
  • Nokia Average Selling Price Will Improve On Windows 8; Expect Stock To Triple [View article]
    I am not a fan of the Asha range on the long term as it stands in the way of the W8 or W9 adoption, I can see it as a transition period in order to keep their installed base warm, especially in EM. I am afraid that in the Western markets it will disappointsome users that had higher expectations from a smartphone. These expectations, like push-email, browsing, etc... could be better answered with a Lumia. Design is hard to judge, I find W7.5 very well designed as it comes to operating the system and making the phone do what you want it to do, in that sense I find it much better designed than Symbian, but also matches iOS. If you are talking about the look and feel, I have to admit that iOS still has the edge, but I don't care about that. On originality, W8 scores, simply because it is different than iOS, while Android tries to be same.
    Oct 19, 2012. 01:20 PM | Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I mentioned Tom2 as a potential target, since the Article the Tommies have run up from 3.50 to 4.15 today. I couldn't link to the code as SA does not support foreign stocks, but I am long Tom2 as they own the platform behind the live traffic updates. Another basket case stock that is making a come-back. Management is considering a buy-out. Fed-up by the analyst bashing of weak stocks below fundamental value.
    Oct 19, 2012. 07:38 AM | Likes Like |Link to Comment
  • Nokia Average Selling Price Will Improve On Windows 8; Expect Stock To Triple [View article]
    I agree that the last 8 quarters were very tough, but 3 years (2015) is a long time in Tech years. In 1997 Apple itself was in trouble and if they didn't get a lifeline from MSFT, we would still be puzzling with the Symbian OS. I would agree that Nokia is a non-starter if they were new to the market. The difference is that they still have a large installed base that does not think or act like most iPad swagging analysts that write off Nokia every study they release. The beauty is they do not have to make 25% margins till eternity, like AAPL does. They can fly with an 8% margin by 2015. Of course, there is still a scenario possible that Nokia ends up in my bear case, but even then, I believe that is priced in. The odds are in my favour. A little Lumia success is key.
    Oct 19, 2012. 04:25 AM | 1 Like Like |Link to Comment
  • Nokia Average Selling Price Will Improve On Windows 8; Expect Stock To Triple [View article]
    You are right. That is my mistake. I somehow believed they once tried to hide the figures after it became clear they overpaid by a factor 5 or 10. That is water under the bridge now. The Nokia Drive application is based on Navteq, so does somehow gets a return in the Device and Services segment as it attracks buyers. I often use it, but must admit it can't match the Tom2 app on iOS or Android. There is no Windows version yet. Thanks for pointing out.
    Oct 19, 2012. 04:16 AM | Likes Like |Link to Comment
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