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  • GT Advanced Technologies' Sapphire Wind-Down A Game Changer For Wafer Prices, Rubicon [View article]
    Digitimes ran an article talking about the booming growth of fingerprint sensors.
    We will likely see them move to tablets today, if rumors are right, but they could see a number of new applications in the next five years. Think of all the applications from appliances to cars to locks. Digitimes predicted almost 1.5Bn by 2020 in smartphones! So, even though that is usually the cheaper, 2" core, it all helps the overall market. RBCN's emphasis on vertical integration and their recent work to qualify for patterned substrates may help differentiate them.
    Oct 16, 2014. 12:32 PM | Likes Like |Link to Comment
  • Morgan Stanley adds Apple to Best Ideas list [View news story]
    That math just doesn't work for me, rich. How are they going to have a "great" Q1, and then miss their estimates for the year so badly? Right now analysts have about a 6Bn increase in Q1 over last year programmed. Assuming ASPs are up 10% on the phones, we are over half way there with flat iPhone units from last year! Amazing. The analysts are just off imo. Assuming Apple sells in the 60s, say 62.5MM iPhones, the increase will almost double over the current estimates! That is no increases for iPad, Mac, services, nada. That is very high margin, too. It is very possible that they could beat 62.5, too. So that would add 5+ Bn in high margin revs just next quarter--all added to the current estimates without any help from elsewhere. There is so much interest in these phones and there are billions of potential new customers they didn't address, even 12 months ago. Plus, smartphones are still growing rapidly. Believe it or not, there are still tens of millions of customers in the US that haven't upgraded to a smartphone yet. They will sell a lot of watches to the Apple faithful, too, and the ASP on the Watch is going to be higher than many think (because of the high dollar options and accessories). All of that is accretive. And, many new products and categories are rumored for next year. With the large reduction in shares that is coming, $7/share is an implosion, rich. I don't see how we can get there without some type of disaster. I have been wrong before, but I am having a hard time getting anywhere close to your numbers. Maybe they will level off in 16, but 15 looks to be a blockbuster year, assuming the wheels don't come off the economy.
    Oct 15, 2014. 07:23 PM | Likes Like |Link to Comment
  • Google launches Android 5.0, new Nexus mobile and TV hardware [View news story]
    I agree, that sounds crazy. $649 for a Nexus phone is like $2000 for an iPhone. Who would buy that? The nice thing about the Nexus line is that Google subsidizes them, virtually giving them away.
    Oct 15, 2014. 01:05 PM | 1 Like Like |Link to Comment
  • Morgan Stanley adds Apple to Best Ideas list [View news story]
    Oct 15, 2014. 12:45 PM | Likes Like |Link to Comment
  • Morgan Stanley adds Apple to Best Ideas list [View news story]
    She has been one of the most accurate over the past few years--this is one analyst we ought to listen to, imo. Funny, I agree with her assessment on FYQ4 almost exactly. I see 37-38MM iPhones because China got knocked out of the rollout. So, I think we are likely to just be near the top on revs and profits. They might not even beat the street. FQ1 is way above expectations, though, because of good volume and higher ASPs. Apple should have a tremendous Q1 and Q2. I think the mediocre Q4 will be ancient history come Tuesday. GLTA.
    Oct 15, 2014. 11:11 AM | 9 Likes Like |Link to Comment
  • The Good, The Bad And The Ugly Of Falling Oil Prices [View article]
    I agree; very timely. I have read that American uses about 350 million gallons of jet fuel a month. When we see oil prices dropping like this, the unhedged airlines are printing money. People are so used to airlines burning money, they are in denial over prosperity! American could well have gotten down to 3-4 X 15 earnings this week! They do have a lot of varied risk, but that is pretty ridiculous. When you are thinking pain on your energy stocks, think transpo stocks! I like the REITs, too, especially the value names like ARCP.
    Oct 15, 2014. 10:04 AM | 2 Likes Like |Link to Comment
  • Commodities Today: Ways To Hedge In Case Oil Does Not Bounce Back Quickly [View article]
    American uses about 1 Bn gallons a quarter (very rough and rounded). They have less than 1 Bn shares outstanding. ~70 cents a gallon is ~ an extra $1 a share in pretax earnings each quarter! That would be a big move. Assuming other risks are accounted for, and they are significant, there is no better place than AAL to take advantage of the drop. Current estimates are 5.38/sh this year, and 6.89 next year. If oil stays here or drops, those numbers will go up dramatically. American may have been selling at 3-4 times next year's earnings yesterday! The other airlines have the same exposure...some may be hedged, so there is less upside. GLTA.
    Oct 14, 2014. 04:19 PM | Likes Like |Link to Comment
  • Have Airlines Become A Speculative Investment? [View article]
    I agree with your caution, but oil is so powerful for their profit/loss statement. I think the trend for US oil is down, and that would be a huge tailwind.
    Oct 14, 2014. 02:24 PM | Likes Like |Link to Comment
  • Have Airlines Become A Speculative Investment? [View article]
    Dollar headed north, oil headed south, airlines full, airline stocks selling for 20%-50% of the PEs of the major indexes--I'm a bull, but while remembering airlines have different risks. The panic party is just way, way overdone imho.
    Oct 14, 2014. 02:03 PM | 1 Like Like |Link to Comment
  • Rubicon Probably Won't Replace GT Advanced Technologies [View article]
    I disagree with the basic idea behind this article. Apparently, a lot of people are unaware that sapphire's big use is for LED production chips--the Apple thing is new and additive to the business. LED lighting/BLU production is forecast to explode with growth. RBCN is vertically integrated for that market, even offering large, patterned substrate to mfrs, and that is totally different from Apple's use of sapphire on their electronics. Apple buys sapphire for the BLU already. It is all growth, but the point is that RBCN doesn't need to run Apple's AZ ops to be successful. Apple's use of sapphire would dramatically expand the market, and RBCN is and has been one of the leaders in this business, so using them is possible, but unlikely.
    Oct 14, 2014. 06:48 AM | 2 Likes Like |Link to Comment
  • Apple Is Worth Much More On A Discounted Cash Flow Basis [View article]
    Currently there is a huge disconnect between expectations and reality (assuming the numbers you mention are close to correct). If Apple sells 20MM iPhones for the *whole quarter* in China, estimates are going to have to explode higher! They generated over 22Bn in CF last year's holiday qtr, and 20MM phones, along with some growth in the rest of the company could get them over 30Bn in cash flow this quarter. Needless to say, those numbers are almost silly. It just doesn't agree with what the analysts expect at all! This is going to be interesting.
    Oct 13, 2014. 06:35 PM | 11 Likes Like |Link to Comment
  • There's Reason To Be Pessimistic And Optimistic On Rubicon Technology [View article]
    Joe, not only that, but Apple might own that sapphire at the end of the day. It might get complicated. Also, RBCN is really going after a completely different market, and a lot of people don't get that. They are vertically integrated, and will deliver large wafers for patterned substrate LED use. Basically, it enables higher efficiency and lower cost for mfrs. An LED chipmaker doesn't have to buy the furnaces, equipment, and expertise--they can buy the patterned wafer straight from RBCN. GTAT was going after a different market with Apple--watch/phone covers. It is a big market out there, and LED chips are booming. Whether RBCN can be successful is still in question, but imo they are very advanced wrt expertise. So was GTAT, though.
    Oct 13, 2014. 03:10 PM | 1 Like Like |Link to Comment
  • Chinese iPhone 6 pre-orders reportedly top 20M [View news story]
    25% of that number would be a blowout! 5MM phones in the whole first weekend would mean we are up over 55% from last year. 8MM first weekend sales means we are growing 100% YOY in iPhone worldwide sales. Needless to say, these numbers are ridiculously high.
    Oct 13, 2014. 02:44 PM | 14 Likes Like |Link to Comment
  • Why Carl Icahn Is (Kinda) Right About Apple Stock [View article]
    wd, If Apple is growing earnings again in the 20-30% range, then I think 19 is cheap. That was about the forward PE on the NSDQ 100 last week when I looked. Apple is the chief constituent of that index, so the rest of the weighting has to be more expensive right now, as AAPL is way below that. Thx for the well written thoughts.

    Chuck, I kind of took Carl's letter as a pep talk on increasing the buyback--intended to make the case that Apple can be more aggressive. Obviously, if they make anywhere close to $16+/share in three years, the stock will likely be much higher. I think you are correct to question the inputs. In fact, we don't know much past this quarter. The persistent watch rumors have been around 5MM/mo.! I find that hard to believe, but I also found the iPhone rumors hard to believe, and now I am beginning to think they were correct. And, I am reading the ASP might be a lot higher than many are figuring on the watch. The next two quarters (FY Q1&2) look unusually strong to me. Thx, and nice columns!
    Oct 13, 2014. 02:04 PM | 1 Like Like |Link to Comment
  • There's Reason To Be Pessimistic And Optimistic On Rubicon Technology [View article]
    Paulo, I might have thrown in that it is selling for about half the book value. They are a leader in sapphire technology, too. The numbers do stink right now, but Mr. Market is giving away the shares. I just checked, and RBCN still has a lower EV than GTAT today! Apple and others will still need covers for fingerprint and camera applications. Sapphire is also used as a substrate for LED chips and it offers some unique capabilities for radio chips, and of course, it likely has a future in wearables. Thx for writing!
    Oct 13, 2014. 12:48 PM | Likes Like |Link to Comment