Market Currents
"High above the Alps, my gnome is hearing that Apple’s shares are lower because of margin...
-
Friday, January 25, 2:34 PM ET"High above the Alps, my gnome is hearing that Apple’s shares are lower because of margin calls," writes Doug Kass as Apple (AAPL -1.3%) falls to $444 and cedes its market cap crown for now to Exxon Mobil. The FY13 EPS consensus has fallen to $45.07 from a pre-earnings level of $48.30, but that still puts shares at 6.6x forward EPS exc. cash. The dividend yield is now at 2.4%. (yesterday)
Other date
TECH ETFs IN FOCUS
Latest Tech Articles
This news story has 53 comments:
I have proof of that .
Many got in at $600 and above on margin accounts thinking this was going to be a big surprise Q4 to the upside, and got burned instead.
And on top of all Mr.Cook finished the job at the conference call with his arrogant comments while the stock was dropping $5 with each phrase that came out of his mouth.
Really well spoken. Thanks for the keen insight.
I want to thank you in advance, if you were the one selling me
shares @ sub-440's this AM !!
So I will take this as a joke.
It is just amazing how it got there. Apple has done nothing wrong. In fact they have done everything right - 27% YOY growth, an extra $16bn in cash generated during the quarter (some $1,230,769,230 every week!!), now up to $137bn. Record 20-odd percent iPhone growth, 40-odd percent iPad growth, 67% growth in China, 53% market share in US for the first time.
Jesus the market is pretty hard on this company. What do they want it to do, find a cure for cancer and solve world poverty as well?
Long in 1980 Apple products (I wish I did not sell my Newton, the first iPad!) and confused if it is still a scary stock or a good buy!
Why is it that everyone is looking for non-existent cracks.........!!!!
where did you find that apple set side money for taxes ?
Those cash in foreign countries is dead or waiting to be blown. How can Apple spend that much money? Buy a country?
Also Apple carries about $7.8 billion in deferred sales which should be added to sales over the next 8 quarters at the rate of about $900 mln per quarter ( about $1/share).
Apple is making less than 1% on its cash hoard due extremely low interest rates it appears rates are starting to rise and if they could only get 1.1% yield they would generate over $1.0 bln dollars (another $1+ per share). They pay a 2.2% dividend and have $8.1 bln left on their stock buy back plan. Everytime they buy stock they save the 2.2% dividend that they do not have to pay.
Apples accounting is very conservative and it is unlikely there will be any unpleasant accounting surprises.
that's accounting provision only. It does not consume any cash. So it means if the money is repatriated to US, at that moment, Apple will pay cash for the tax and remove the line in deferred tax liability.
As for deferred sales, my guess is that Apple collected prepayment, but did not deliver the product. So when the product is delivered, the revenue is recognized, but the cash does not increase.
On the balance sheet, Apple declared a future liability. That reduced the shareholder equity, book value and amount of 'cash' holdings that get reported. This liability is included in "Other Non-Current Liabilities." The item now exceeds $17 billion.
"The vast majority of this item on the balance sheet is money set aside to pay US corporate income tax on foreign earnings. Apple has stated on a number of occasions they do not intend to bring foreign earned money back into the US at the current 35% tax rate. They are, however, setting money aside as if they intended to do so."
http://seekingalpha.co...
As for the revenue issue, my understanding is Apple holds back a certain percentage of each sale for warranty issues etc after a new product is launched because of the anticipated incremental costs pertaining to warranty matters with new items, which is why they can begin to unwind this reserve over time.
The offshore cash could be used as security it would only cost0.5%
They make less than half a percent on the offshore money so just the saved 2.3% divvy would make it a good idea.
Also the tax is set aside already in the balance sheet as a liability.
Tax break would equal a windfall profit.
Most of the institutional holdings are probably untouched by the panic, which means it's the BiPolar Irrational Euphoria crowd who ran for the exits when they saw the Margin Called running for the exits.
The next notable event will be an announcement of what they intend to do with the billions earning 0.002% in the bank. Maybe a share buy-back or dividend increase or maybe they'll decide to merge with Krispy Kreme or buy the Hostess Twinkie patents.
That was very funny !
Be on the look out for the Twinkie 5s coming soon !
:)
They will make 10 + in the next quarter alone...
137 billion? Its criminal.
Buy back stock and heal the company!!
They can't spend it.
If they buy something it risks destroying Apple.
Incidentally, just some of the off-putting things which drove me to the Android ecosystem:
1. Retention of closed architecture - even on iPhone 5, no battery change or bigger battery options; parts even less eco-friendly.
2. Litigation strategy - forget the hypocrisy of Apple claiming Samsung stole its idea of a rectangle with rounded corners (which had been used in prior art by Sony) or that Apple made its money arguably by pirating the GUI developed at XeroxPARC when it introduced the Macintosh, the whole "destroy Android"/thermonuclear war and unbridled actions of counsel disgusted me.
3. The ecosystem which I thought I needed to properly sync calendars, music, etc. - readily available in similar form through Samsung, including importing all of my data from the iPhone.
4. New plug on iPhone - after "investing" in many devices with the formerly standard plug, I refused to be forced to upgrade. Was the new plug necessary? Not if you figure we can use the old devices once we buy a "converter." Sorry, Apple, that was one bad move - the customer will not ALWAYS blindly follow your directives.
5. Apple Maps - a joke. Where was quality control? Google Navigator/Google Maps on Android? So fantastic that I stopped using my Garmin GPS. Only thing missing is the display of speed limit for the area of my travels.
6. I liked my iPhones - all of the versions I've had - but I wanted a bigger screen and Apple refused to get with the program - so I went to the Samsung Galaxy Note and, months later, I wouldn't think about going back.
As always, Apple products are pricey, closed-architecture and capitalize on the "cool" factor - but I don't need all of them - and will be looking for value first.
Apple's reluctance to do this suggests they think they have a bit more growth in front of them. However the stock price is ridiculously low and I really think they ought to consider buying back shares now. It could crush the shorts and a sharp short covering rally could ensue.
It will be interesting to see how Cook manages this. I don't think he will be the creative product genius that Jobs was but he can still produce value for shareholders by managing the company and the stock aggressively. Jobs didn't have to worry about stuff like this but Cook will.
Surely you have heard of it?
Higher earnings per share?
More dividend per share long term.
Long term investors will remain, stabilising the stock.
Keep buying until it reaches $1000 or you have spent 100 billion...
Then they can buy for 5 billion every quarter if it dips below 1000.
Interesting. Just a few decades ago I predicted (in a alcohol induced nap) that Enron would collapse, Bernie Madoff would become the role model for greedy p_r_icks and Lehman Brothers would be on unsuccessful life support.
I have an amazing record of predictions published after-the-fact. Now that I've honed my talent I can assure you AAPL will have intra-day lows of $435 on a Friday in January. What can I say? It's difficult to remain modest when you're always right, haha.
Send a certified cheque or cash for my predictions for November 2012.
Apple are an international company with two-thirds of its sales, and the majority of its future hyper-growth coming from emerging markets.
It has all the cash it needs by a huge margin to cover US operations, R&D, dividends etc. In fact after these costs the cash in the US is growing still by over $300,000,000 each week.
It makes huge financial sense for Apple to grow its earnings in a tax-free environment offshore.
Apple plans to increase its stores in China over the next year from 12 to 37 (there are 260 in the US) they should use their cash to fund this and other overseas expansion.
Cash is also king, and is one of the reasons why the Apple stock is so safe. Cash gives Apple the option to buy its future growth if required. They could even buy Samsung for cash and less than two years profits if they wished. There is no need for them to do this, they are buying patent banks, small technology companies and rolling this innovation into Apple projects in the future. Have you not read about the patents they have been filing for TV for example - this area is going to be huge for Apple, and IDC think Apple iTV is worth €50bn in the first year alone.
The cash should be used to defend the stock...
Apple must be very irritated by them.
Most of the big institutions all still have Apple as a buy or strong buy, and average price north of $700.
Half a billion would do next to nothing, 5 billion would barely move the stock.
It does not seem Tim cares about the shareholders.
This drop does huge damage to the brand also.
Apple is a looser company.
It is a disgrace!