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Wim Lewi  

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  • Apple Has Little Left To Lose [View article]
    I am confused that there is so much AAPL pessimism on the board. When the stock quadruples in a straight line to 700, comments were bullish and the stock was set for 1000 USD. Smart people on Wall Street that are paid as if they have a rare talent were unanimous about this. Now, the stock has come back to earth and the bashers come out of their holes and cool their saved up anger a little too late. I am a fundamental investor and that takes a lot of patience. I am probably too early with my change of opinion, but I believe that method of investing works best for me. This does not mean that I go to sleep in the meantime. If Apple makes mistakes and loses its grip on the market completely, I can still chance my opinion again. But at this price, the company is a much better investment than all government bonds or any other fixed income vehicle. They still generate a hell of a lot of cash. Sentiment will calm down or even reverse on the blink of an eye.
    Mar 5, 2013. 03:53 AM | 3 Likes Like |Link to Comment
  • Why Analysts Missed The Apple Correction [View article]
    My analysis is rubbish ?
    What about that bet that you will double ?
    Easy money if you ask me.
    Simple spreadsheet math shows that everybody is following the herd into the abyss. AMZN is up next.
    Jan 15, 2013. 11:19 AM | 1 Like Like |Link to Comment
  • A Cheaper iPhone Would Confirm A Lack Of Innovation And Declining Margins At Apple [View article]
    I Agree, I predicted this event in my article of 3 November, that was originally titled 'iPhone mini is biggest risk for Apple sales'. The editor changed the title as it might suggest that this was a confirmed idea.
    last alinea :
    "I expect Apple to decrease iPhone ASP's in order to defend its market share. An inevitable iPhone Mini will have a much bigger negative impact on the bottom line."
    Jan 9, 2013. 11:39 AM | Likes Like |Link to Comment
  • Why Analysts Missed The Apple Correction [View article]
    Indeed, but I am patient, the sales from this Xmass will be great, but the the LT profit expectations that are baked in the price will not materialize. When the market will adjust to that is still the million USD question, the value of a stock is what a fool will pay for it. After good returns on AAPL, NOK and also recently DELL (only 1000 hits), I have had a great run, it is rarely that easy. I am also looking to short CRM, lots of insider selling, vague business model and Cramer going hot about the stock, calling it the FB of the enterprise, are all very encouraging, but again I am looking for a catalyst.
    Dec 11, 2012. 08:47 AM | Likes Like |Link to Comment
  • Apple Trading At 2.56x 2016 Cash Flow [View article]
    Anthony, you could have written the same article about Nokia when it stood at 40 USD in 2009 and was hit because there were rumours of a new product coming. You could have thrown in a bit more margin decline, but in fact you should have assumed that at 40 USD, the whole product range was broken, etc... AAPL cash position is untaxed and still has to pay 28 billion to its suppliers. In fact, 70 bln is my guess of the overstatement after capex costs. Anyway, the iPhone is 75% of the restvalue of about 425 bn. That is the Achilles heel. By the end 2013, it will be a common product and gross margin will be closer to the 20% of the PC market than the current 62%. I have a target of 500 USD, but the over-loved state of this stock, could push it down to 360 USD.
    Dec 11, 2012. 03:54 AM | 1 Like Like |Link to Comment
  • Why Analysts Missed The Apple Correction [View article]
    I agree, the regulation attempts like SOX have only made things worse for the private investor. Professional analysts and Investors are driven by bonuses on their actions. This is quite different from private investors that have a symmetric gain/loss ratio. If analyst gets it 30% wrong on Apple, he will not get sacked, because everybody was bullish. If he got it right and the stock goes to 1000, a nice bonus will be his share, like it was the last 2 years in a row. This assymetry in reward has stimulated investors and analysts to take irresponsable risks with other pepole's money. New bonus rules that performance has to be measured over 3 years might change these excesses. I believe that private investors should start doing their own homework and completely ignore the noise from Wall Street or use the noise to their adavantage. I once heard this metaphore on ice skating on open lakes, like is custom in Holland. You should never skate where there are large groups skating, because when you hit a weak spot in the ice you get sucked in with group. If and when AAPL really reports a weak set of results, who will be able to upgrade their recommendation in support ? Most analysts will be up to their neck in the ice cold water.
    Dec 8, 2012. 06:26 AM | 3 Likes Like |Link to Comment
  • Why Analysts Missed The Apple Correction [View article]
    In 1.5 years, the iPhone will be a product closer to what the iPod is now. Nowhere near a 650 USD price tag and Asian copy-cats will bake smartphones faster than corn flakes. International market share is already declining. iOS will not become the WW mobile standard like Windows was a couple of years ago. The iPad can grow in volume and should, because it is a lower margin product. I do not know for sure wether AAPL will not make the next big innovation, but I think it is unlikely. This article wants to warn retail investors that they will not get a timely warning from sell-side analysts as they have other things to worry about. Just because AAPL is up up 40% since last year, that doesn't make it a good investment.
    Dec 8, 2012. 06:14 AM | 11 Likes Like |Link to Comment
  • 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
  • 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
  • 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
  • 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
  • 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
  • First Indications On Apple's iPad Mini [View article]
    Apple is not on the attack, it is on the defensive. They would not bring out a mini if the Kindle didn't exist. AAPL would rather sell a 600 USD device and make 40% margins instead of a 250 USD device with 20% margins. How can you be sure this move is earnings enhancing ? AAPL dominates the space already by a big margin. Every mini sold is a potential iPad or worse an iPhone not sold. AAPL needs to sell 5 mini's to compensate the loss of 1 iPhone. AAPL is forced to shoot itself in the foot or lose part of their 65% market share. AAPL is the 6000 lbs gorilla now. I calculated a DCF that takes the iPad mini trend into account :
    Oct 16, 2012. 09:33 AM | Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I agree, I am making a 12m prediction, a lot of noise can push the shares in either direction in the coming weeks. When exactely my thesis will become discounted in the market is hard to say. Even if Apple came out with a statement that my thesis is right and they will spend 70bln USD in supply chain costs, the stock will not go down immediately to 500 USD, because there is a die-hard core of AAPL investors that will not give up. It will take several results before they surrender, but when they do there will be no market.
    Oct 13, 2012. 10:19 AM | 1 Like Like |Link to Comment
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