Apple (AAPL -2.5%) has dived over the last 30 minutes of trading on heavy volume, without any news to explain the move. The decline comes with the NASDAQ still up 0.5% on the day. [View news story]
Apparently Trainer is trying to protect short positions against a squeeze. It amazes me how any analyst's opinion, no matter how ludicrous, is always initially regarded as serious commentary that deserves to be acted upon by the investing herds. Act first, think later seems to be the motto in this era of ultra high speed trading. The last time AAPL was at $240, the iPad had been released for only a few months, and iPhone sales were considerably less than half their current level.
Chipotle: Overvalued And Uninviting [View article]
CMG may be overvalued, but certainly not for the service and decor reasons that the author has mentioned. Starbucks is warm and receptive, but they aren't really a direct competitor to Chipotle. Taco Bell is vying for the same dollar as CMG, but their decor looks dated, rundown, and impoverished by comparison. What nearly every critic of CMG fails to note is that the company is targeting a customer base that has been largely ignored by the fast food chains: Grownups who actually smell and taste before swallowing, and who insist upon quality ingredients, and seek something a little different than the homogeneous, cookie cutter, "fast food nation" dining experience that rules our land. The potential for international expansion hardly matters very much at this point, because there is so much room for expansion in the US - many locations are over a hundred miles apart. I guarantee that Chipotle will be a huge hit in continental Europe when that expansion occurs.
Monsanto: Seeds Planted For Successful Growth [View article]
They also have an extensive network of corporate lawyers who file nuisance lawsuits against farmers whose crops have been inadvertently contaminated by Monsanto GMO crops, claiming that the victims of such contamination have actually improperly benefited from GMO contamination and have thus infringed upon Monsanto's patents.
One of the major reasons that Monsanto is considered most controversial among the genetically modified food companies has been because of their extremely overreaching legal stance that they have adopted for defending their patents. Monsanto requires that all farmers who purchase their genetically modified seeds sign a contract that prohibits such farmers from saving seeds for use in sowing future crops. Such contracts are understandable and defensible. However, Monsanto claims that their patent rights also extend to the fields of farmers who have never purchased Monsanto seed and have never signed any contract with Monsanto. Many of the latter group of farmers have had their crops inadvertently contaminated with Monsanto patented genes because of wind-blown pollen, etc. When these farmers saved their seed for next year's crop, Monsanto has claimed that these victims of genetic contamination have violated Monsanto's patent(s) and has sued these farmers, with the usual result being an out of court settlement because they lack the legal resources to defend themselves. As long as Monsanto continues to engage in this form of extortive shakedown of small farmers, I will never purchase Monsanto shares.
If demand for shares remains constant over time but the supply of available shares decreases during that same time period (buyback), then in the absence of other factors the price should go up. Econ 1.
I've recently tried shorting NFLX, on several occasions, using Schwab. Although the limit price order has been initially accepted, after a few minutes the order gets cancelled. After this happened for a third time, I called Schwab and I was told that shares for shorting are scarce and minute by minute. I looked at shortanalytics.com, and the % of short trades recently has almost always been 45% or above. I conclude that there is a short squeeze going on with NFLX, and that is part of the reason for the recent huge price jump after earnings.
Apple Just Invested In Shareholders [View article]
Institutional ownership of AAPL shares has declined from about 70% to 63%, approximately coinciding with the decline from $700 to $400. I believe that yesterday's buyback and dividend announcement was primarily directed at fund managers, and was an announcement to them that the downside risk of holding AAPL has just been substantially mitigated. Apple is in effect acting as its own price support for its shares by creating significant scarcity in the number available for sale. In addition, yesterday's report effectively squelched the doom and gloom prognostications about declining iPhone and iPad sales. Apple certainly needs new products, but it is nowhere near the emergency that some have recently claimed. Far from being the actions of a company that has run out of ideas, I interpret these moves as an indication of management's supreme confidence in the viability of upcoming products - why would they buy back shares with borrowed money in the expectation of losing money on them in the long run?
Heads: Apple Short Sellers Win, Tails: Apple Shareholders Lose [View article]
If someday the company were to go bankrupt (as it almost did in 1997) then it is self evident that it wouldn't be worth $150/share because reorganization under bankruptcy protection is only permitted if a company lacks the financial means to meet ongoing obligations.
The iPhone 5S launch has been pushed back to August-September from July, likely due to "volume production issues," says Citi's Glen Yeung, echoing last week's Jefferies note. Yeung, who downgraded Apple to Neutral on Dec. 16, is also worried iPad Mini demand is weakening, given "flattening production" (Digitimes reported something similar last week), and (like others) doesn't expect a larger iPhone to arrive this year. AAPL +0.3%, shaking off Yeung's note and supplier LG Display's soft Q1 report. [View news story]
News flash: Apple rumor fatigue will be included as a psychiatric diagnosis in the next edition of the DSM.
Restaurant visits by parties of adults grew by 1% last year to end four consecutive declines in the category but visits with children in tow showed flat growth once again, according to tracking from the NPD Group. A tripping point for the sector has been the lack of growth in visits by parties with kids. What to watch: Analysts see increased promotional activity sneaking in on the industry's margins. [View news story]
Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing weak demand for the 9.7" iPad - he thinks this is likely "a sustained trend" as demand shifts to smaller/cheaper tablets - and a demand pause ahead of a refresh, Hargreaves is cutting his FQ3 (June quarter) iPad forecast to 15M units from 18.5M. He also thinks "the high end of the smartphone market is quickly becoming saturated," and has lowered FQ2 and FQ4 revenue/EPS estimates further below consensus. Hargreaves cut Apple to Sector Perform on Jan. 16, when shares were at $503. [View news story]
Sentiment and future expectations changed, but whether or not the prevailing sentiment is reasonable remains to be seen. Google has had nine earnings misses in a row.
Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing weak demand for the 9.7" iPad - he thinks this is likely "a sustained trend" as demand shifts to smaller/cheaper tablets - and a demand pause ahead of a refresh, Hargreaves is cutting his FQ3 (June quarter) iPad forecast to 15M units from 18.5M. He also thinks "the high end of the smartphone market is quickly becoming saturated," and has lowered FQ2 and FQ4 revenue/EPS estimates further below consensus. Hargreaves cut Apple to Sector Perform on Jan. 16, when shares were at $503. [View news story]
Why didn't your sell order execute last week? AAPL crossed $445 on 3/18 and is now at about $452. It went up to $469.95 on Monday.
"The Street went from thinking Tim Cook has to provide some revolutionary product to now thinking he won’t even do the obvious things. I think it’s logical they will," asserts Walter Piecyk on CNBC (video), defending his upgrade of Apple (AAPL +1.1%). One of those "obvious" things is a cheaper iPhone, which Piecyk expects will add $11B to FY14 revenue while lowering Apple's gross margin by 200 bps. He sees total FY14 iPhone revenue growth of 15%, with units growing over 30% to 190M (152M high-end iPhones + 38M cheaper ones) and ASP falling below $550 from FQ1's $641. [View news story]
A cheaper iPhone will still be about 30-40% higher than same category offerings from other companies, and will have a very healthy margin built into the price. Look at the mini iPad and its pricing for clues as to how Apple will approach this problem. The Apple brand and iOS carries a certain cachet that allows them to charge top dollar and still be runaway best sellers. It will be released this year, it will have fully supported access to China Mobile, and sales won't be limited by production constraints the way the iPhone 5 was during the early going.
Don't look now but shares of Green Mountain Coffee Roasters (GMCR +2.6%) have shot right past $50 and continue to trek higher as many of the dire predictions from the bear camp seem to be falling away - in particular the death-by-Verismo argument. (Google Trends: Keurig/Vue vs. Verismo). Next phase: With Starbucks (SBUX +1.2%) not doing so bad itself, does this mean the market is plenty big enough for both companies to prosper in the coffee machine/consumables space? [View news story]
The market is big enough for both companies to prosper in coffee machine/consumables, plus there is a short squeeze going on with GMCR. The Verismo machine was not a new concept or game changing device, and the market initially overreacted to the competitive threat that it posed to GMCR.
Apple (AAPL -2.5%) has dived over the last 30 minutes of trading on heavy volume, without any news to explain the move. The decline comes with the NASDAQ still up 0.5% on the day. [View news story]
Chipotle: Overvalued And Uninviting [View article]
Monsanto: Seeds Planted For Successful Growth [View article]
Genetically Modified Food Investing [View article]
Apple's Valuation Is Not Rational [View article]
Legendary Short Seller Jim Chanos Likes Being Long Apple And Short Dell [View article]
Netflix Is A 'House Of Cards' [View article]
Apple Just Invested In Shareholders [View article]
Heads: Apple Short Sellers Win, Tails: Apple Shareholders Lose [View article]
The iPhone 5S launch has been pushed back to August-September from July, likely due to "volume production issues," says Citi's Glen Yeung, echoing last week's Jefferies note. Yeung, who downgraded Apple to Neutral on Dec. 16, is also worried iPad Mini demand is weakening, given "flattening production" (Digitimes reported something similar last week), and (like others) doesn't expect a larger iPhone to arrive this year. AAPL +0.3%, shaking off Yeung's note and supplier LG Display's soft Q1 report. [View news story]
Restaurant visits by parties of adults grew by 1% last year to end four consecutive declines in the category but visits with children in tow showed flat growth once again, according to tracking from the NPD Group. A tripping point for the sector has been the lack of growth in visits by parties with kids. What to watch: Analysts see increased promotional activity sneaking in on the industry's margins. [View news story]
Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing weak demand for the 9.7" iPad - he thinks this is likely "a sustained trend" as demand shifts to smaller/cheaper tablets - and a demand pause ahead of a refresh, Hargreaves is cutting his FQ3 (June quarter) iPad forecast to 15M units from 18.5M. He also thinks "the high end of the smartphone market is quickly becoming saturated," and has lowered FQ2 and FQ4 revenue/EPS estimates further below consensus. Hargreaves cut Apple to Sector Perform on Jan. 16, when shares were at $503. [View news story]
Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing weak demand for the 9.7" iPad - he thinks this is likely "a sustained trend" as demand shifts to smaller/cheaper tablets - and a demand pause ahead of a refresh, Hargreaves is cutting his FQ3 (June quarter) iPad forecast to 15M units from 18.5M. He also thinks "the high end of the smartphone market is quickly becoming saturated," and has lowered FQ2 and FQ4 revenue/EPS estimates further below consensus. Hargreaves cut Apple to Sector Perform on Jan. 16, when shares were at $503. [View news story]
"The Street went from thinking Tim Cook has to provide some revolutionary product to now thinking he won’t even do the obvious things. I think it’s logical they will," asserts Walter Piecyk on CNBC (video), defending his upgrade of Apple (AAPL +1.1%). One of those "obvious" things is a cheaper iPhone, which Piecyk expects will add $11B to FY14 revenue while lowering Apple's gross margin by 200 bps. He sees total FY14 iPhone revenue growth of 15%, with units growing over 30% to 190M (152M high-end iPhones + 38M cheaper ones) and ASP falling below $550 from FQ1's $641. [View news story]
Don't look now but shares of Green Mountain Coffee Roasters (GMCR +2.6%) have shot right past $50 and continue to trek higher as many of the dire predictions from the bear camp seem to be falling away - in particular the death-by-Verismo argument. (Google Trends: Keurig/Vue vs. Verismo). Next phase: With Starbucks (SBUX +1.2%) not doing so bad itself, does this mean the market is plenty big enough for both companies to prosper in the coffee machine/consumables space? [View news story]