With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
Aha, someone has touched the 3rd rail - class warfare. Blaming the 2% of taxpayers, that pay well over 50% of all taxes, for our budget deficits is the height of class deceit.
Nobody wants to pay taxes, but the US's deficit problem comes from the class of politicians that will spend any amount of our children's future to get re-elected.
The facts are that taxing the top 2% of taxpayers 100% of income would barely make a dent in the deficit. Spending is the US's problem, not tax revenue.
With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
The amount of ignorance about international tax laws, and the impact of repatriating those funds, shown here is staggering.
The US doesn't have a tax collecdtion problem, it has a massive spending problem.
With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
If the US confiscated all profits from all US corporations it wouldn't be enough to cover the annual "budget" deficit.
The US economy is collapsing, but it isn't tax avoidance that is doing it. It is out of control spending, something the UK experienced first hand before Thatcher became Prime Minister.
2 Undervalued Dividend Stocks To Buy After Recent Pullbacks [View article]
Its amazing the number of so called "experts" that fail to read reports from network service companies that clearly show the iOS platform is taking share away from Android.
Or market share reports that show the iPhone 5 and iPhone 4S both outselling Samsung's Galaxy IIIS (worldwide).
The only area that Android is "beating" iOS is in markets that Apple has chosen not to compete. Those would be low cost, non-existent margin, products in backwoods economies that do not consume content. These are strictly hardware plays, and Apple is a software firm (as stated by TC in Apple's latest conference call).
Hardware tech is a no where competitor. Just look at those that followed this path vs the value added software firms: Dell (HP?), Olivetti, IBM, Gateway, Nokia, Sony/Erickson, HTC, iRiver, DEC, Compaq, Creative Solutions, Archos, eMachines, Packard/Bell, Singer, Northern Telecom (Nortel), ROLM, Hitachi, Toshiba, and many more. Now look who survived: Microsoft and Apple (and maybe RIMM).
Apple's resurgence (and industry leadership) comes from a model that eschews licensing, instead relying on consistently much better than average hardware, design and customer service to exploit its software superiority.
Are Apple's Margin Risks Overblown? [View article]
Apple's hardware, as good as it is, is only the media used to deliver the real value added proposition to the customer. This becomes readily apparent when you note that delivery of upgraded software does not require new hardware.
Hardware sales are only necessary to increase the user/customer base. The software is important because it provides more utility and access to money making content. Apple supports its hardware for 5 years, making each unit a powerful magnet for future generations of new users/customers.
Products sporting alternative OSs are technically user obsolete within 12 months, and have no appeal to future generations os users.
Consider that a near 1 1/2 year old iPhone 4S outsells Samsung's latest/greatest Galaxy IIIS TODAY. Samsung's new IVS may close the gap, but it will be followed in short order by the iPhone 5S/6.
No. the iPhone is not "hardware stuff" it is software that can be supported by multiple generations of hardware going backward and forward (a potential 8-10 year period).
Are Apple's Margin Risks Overblown? [View article]
I think, given all the unknowns that exist pertaining to Apple in general and its products in particular, that attempting to discern Gross Margins by product is misdirected energy.
OVERALL Gross Margins are the important metric, as they do not rely on accurate unit sales numbers of the individual products that make up Company Gross Margins.
Taking the average Company wide Gross Margin for the 12 quarters preceding FQ1/2012, you get an historical GM% of 40%. FQ1 and FQ2 of 2012 were outliers in the extreme.
Adjusting FQ2/2013 Guidance by the seeming average delta between Guidance and actual results for FQ3/2012, FQ4/2012 and FQ1/2013, you arrive at 40% Gross Margins, which appears to be a return to the historical average.
The Real Obstacles To Increasing Apple's Share Price [View article]
Of all the arguments about AAPL's valuation, the only one that makes sense to me is what happens when the investor no longer thinks of AAPL as a growth equity, but rather as a dividend equity.
When you capitalize Apple's revenue/earnings growth (30% per annum) you get a much different valuation than when you capitalize a $11 annual dividend at 5%.
Apple is either a growth story, or a dividend play, it isn't/can't be both.
I was anti-dividend because Apple doesn't make soap, furniture, tires, or work boots. Apple is a rapidly growing technology developer with a proven penchant for entering/creating markets, then dominating them. In other words, Apple doesn't rely on market growth to expand revenue or earnings. Because Apple does not, it should not be paying dividends (also known as giving in to self-centered, short-sighted shareholders).
"The chatter about Apple’s broader television plans has been picking up. And if that chatter is to believed, something is happening this fall — likely late fall," says Apple (AAPL) uber-fan MG Siegler, who seems to have a source or two in Cupertino. Siegler isn't sure whether a TV or a new set-top will arrive - the most recent rumors suggest the latter - and expects an SDK ahead of a product launch. The comments come shortly after Xbox (MSFT) co-founder Nat Brown bemoaned the Xbox's failure to appeal to small developers the way iOS and Android have. [View news story]
It may be a rumor at this point, but it makes sense.
Why in the world would Apple jump into a low margin hardware play like TVs? The real money will be made with what your TV can do, and that's software. Further, content doesn't have to be traditional TV programming, ie., sports and movies. It could just as likely (more likely?) be gaming. That fits perfectly with TC's comment about Apple being a software company and PO's recent change to Apple's Income Statement format, wherein software is being highlighted/emphasized.
By unleashing hundreds of independent gaming developers via AppleTV set top box, Apple sells many millions of boxes (which also give you access to a ton of traditional content), but also to a slew (couple hundred thousand) of free and paid games optimized for the digital TV. Remember, you don't have to compile a version of your game for each screen size. iOS is screen size agnostic.
How many of the current crop of iPad games could be recompiled for a games ready AppleTV between June and Christmas, with more powerful games to follow?
Rumor it may be, but of all I've seen in the past 15 years, this one seems the most realistic.
Apple's New Financial Guidance Will Reduce The Volatility Of The Shares [View article]
If WS needs two more quarters to confirm management's new guidance formula, then those that do are lazy in the extreme. All that has to be done to see the new formula in action is to apply it to guidance given in April, July and October for July, October and January results.
A startlingly clear picture emerges where Apple missed estimates in July (by a small amount), but exceeded them in October and January. That's 3 quarters right there, April 2013 makes quarter number 4...in a row. If analysts need more evidence than that they aren't earning their pay, and should be dealt with accordingly.
The only people that should need more evidence are mom/pop retail accounts that don't do any due diligence in the first place.
Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
Has anybody noticed that all the pundits oozing out of the woodwork have been examining Apple/AAPL, using the same metrics used to measure all other firms? Each comes to some conclusion, widely varying, that Apple/AAPL is either going to the moon, or fall flat on its face.
That's the problem with group think emanating from institutions teaching the same thing, the same way.
What ALL of them, including the right honorable Sal Marvesti, don't realize, is that Apple is not a 3 year old startup growing at 50% per annum, and neither is it a mature, 30+ year old, dividend paying Blue Chip growing at 8% per annum. When did Harvard, Wharton or Chicago teach valuation of $500+ Billion Companies growing 40+% per annum (for 5+ years)? Where did they teach what happens to portfolios, limited by holding's per cent of the total, when they own an equity like AAPL? etc, etc, etc.
The deal is that all these "experts" refuse to think in any manner that crosses sacred lines, even though the firm they claim to 'know' hasn't operated between the lines for the last 16 years.
None of the sacred ratios reflect Apple's performance when compared to its competitors. Amazon has a PE of 3,600, IBM has a PS of 2.08, GOOG has a PC of 5.0. Meanwhile AAPL has a PE of 12, a PS of 3.24, and a PC of 17.4. Yet, Apple's gross revenue for calendar is larger than GOOG, NOK and DELL...combined, EPS is 30% higher than GOOG, INTC and AMZN...combined, Op Mar is 45% higher than GOOG, INTC and AMZN...combined. All of the S&P 500s growth during 2011 was attributed to APPL (went negative without Apple). The iPhone and iPad control 2/3s of smartphone and tablet profits. Finally Apple has a debt/equity ratio of ZERO, an ROE of 43% (same as AMZN, GOOG and INTC combined) and is expected to grow 30+% YoY during 2013 (higher than any of its competitors).
But that doesn't stop those with wall paper (or those looking for employment via articles submitted to Seeking Alpha) from proclaiming Apple's/AAPL's demise. Lord save us from the educated unemployed.
Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
Why oh why to the pundits put so much importance in growth RATES, when actual growth is greater than the competition...combined.
No market is limitless, therefor no market can sustain exponential growth. However, all markets can sustain actual growth (by the leader) that is greater than the growth of all other players. Declining growth rates are not, in and of themselves, harbingers of doom, especially when the leader's actual growth is greater than the competition's.
Arguments of large fund "manipulation" of AAPL is like finger nails over a blackboard to me. Everyone trades to their own benefit. The difference is that institutions have access to resources retail traders do not. That means the institutions have a good idea whether Apple is going to meet their expectations, or not, well before earnings, and that their trading strategy changes before the retailer sees it, making the retailer a follower in the best of circumstances.
Right now, the institutions are accumulating AAPL, both the stock and Call options (do the math on Put/Call ratios going back to Sept 21). Almost a million more Calls have been written, than have Puts. Retail accounts don't have the buying power, or knowledge, to generate this level of positive sentiment.
The impact of last year's 14 week quarter is a myth. Yes, there were 14 weeks in last years December quarter. BUT, and this is a very big but, the iPhone4S was only available for TWELVE weeks of that quarter, having been launched mid October.
With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
Nobody wants to pay taxes, but the US's deficit problem comes from the class of politicians that will spend any amount of our children's future to get re-elected.
The facts are that taxing the top 2% of taxpayers 100% of income would barely make a dent in the deficit. Spending is the US's problem, not tax revenue.
With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
The US doesn't have a tax collecdtion problem, it has a massive spending problem.
With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
The US economy is collapsing, but it isn't tax avoidance that is doing it. It is out of control spending, something the UK experienced first hand before Thatcher became Prime Minister.
2 Undervalued Dividend Stocks To Buy After Recent Pullbacks [View article]
Or market share reports that show the iPhone 5 and iPhone 4S both outselling Samsung's Galaxy IIIS (worldwide).
The only area that Android is "beating" iOS is in markets that Apple has chosen not to compete. Those would be low cost, non-existent margin, products in backwoods economies that do not consume content. These are strictly hardware plays, and Apple is a software firm (as stated by TC in Apple's latest conference call).
Hardware tech is a no where competitor. Just look at those that followed this path vs the value added software firms: Dell (HP?), Olivetti, IBM, Gateway, Nokia, Sony/Erickson, HTC, iRiver, DEC, Compaq, Creative Solutions, Archos, eMachines, Packard/Bell, Singer, Northern Telecom (Nortel), ROLM, Hitachi, Toshiba, and many more. Now look who survived: Microsoft and Apple (and maybe RIMM).
Apple's resurgence (and industry leadership) comes from a model that eschews licensing, instead relying on consistently much better than average hardware, design and customer service to exploit its software superiority.
Are Apple's Margin Risks Overblown? [View article]
Hardware sales are only necessary to increase the user/customer base. The software is important because it provides more utility and access to money making content. Apple supports its hardware for 5 years, making each unit a powerful magnet for future generations of new users/customers.
Products sporting alternative OSs are technically user obsolete within 12 months, and have no appeal to future generations os users.
Consider that a near 1 1/2 year old iPhone 4S outsells Samsung's latest/greatest Galaxy IIIS TODAY. Samsung's new IVS may close the gap, but it will be followed in short order by the iPhone 5S/6.
No. the iPhone is not "hardware stuff" it is software that can be supported by multiple generations of hardware going backward and forward (a potential 8-10 year period).
Are Apple's Margin Risks Overblown? [View article]
OVERALL Gross Margins are the important metric, as they do not rely on accurate unit sales numbers of the individual products that make up Company Gross Margins.
Taking the average Company wide Gross Margin for the 12 quarters preceding FQ1/2012, you get an historical GM% of 40%. FQ1 and FQ2 of 2012 were outliers in the extreme.
Adjusting FQ2/2013 Guidance by the seeming average delta between Guidance and actual results for FQ3/2012, FQ4/2012 and FQ1/2013, you arrive at 40% Gross Margins, which appears to be a return to the historical average.
The Real Obstacles To Increasing Apple's Share Price [View article]
When you capitalize Apple's revenue/earnings growth (30% per annum) you get a much different valuation than when you capitalize a $11 annual dividend at 5%.
Apple is either a growth story, or a dividend play, it isn't/can't be both.
I was anti-dividend because Apple doesn't make soap, furniture, tires, or work boots. Apple is a rapidly growing technology developer with a proven penchant for entering/creating markets, then dominating them. In other words, Apple doesn't rely on market growth to expand revenue or earnings. Because Apple does not, it should not be paying dividends (also known as giving in to self-centered, short-sighted shareholders).
"The chatter about Apple’s broader television plans has been picking up. And if that chatter is to believed, something is happening this fall — likely late fall," says Apple (AAPL) uber-fan MG Siegler, who seems to have a source or two in Cupertino. Siegler isn't sure whether a TV or a new set-top will arrive - the most recent rumors suggest the latter - and expects an SDK ahead of a product launch. The comments come shortly after Xbox (MSFT) co-founder Nat Brown bemoaned the Xbox's failure to appeal to small developers the way iOS and Android have. [View news story]
Why in the world would Apple jump into a low margin hardware play like TVs? The real money will be made with what your TV can do, and that's software. Further, content doesn't have to be traditional TV programming, ie., sports and movies. It could just as likely (more likely?) be gaming. That fits perfectly with TC's comment about Apple being a software company and PO's recent change to Apple's Income Statement format, wherein software is being highlighted/emphasized.
By unleashing hundreds of independent gaming developers via AppleTV set top box, Apple sells many millions of boxes (which also give you access to a ton of traditional content), but also to a slew (couple hundred thousand) of free and paid games optimized for the digital TV. Remember, you don't have to compile a version of your game for each screen size. iOS is screen size agnostic.
How many of the current crop of iPad games could be recompiled for a games ready AppleTV between June and Christmas, with more powerful games to follow?
Rumor it may be, but of all I've seen in the past 15 years, this one seems the most realistic.
Apple's New Financial Guidance Will Reduce The Volatility Of The Shares [View article]
A startlingly clear picture emerges where Apple missed estimates in July (by a small amount), but exceeded them in October and January. That's 3 quarters right there, April 2013 makes quarter number 4...in a row. If analysts need more evidence than that they aren't earning their pay, and should be dealt with accordingly.
The only people that should need more evidence are mom/pop retail accounts that don't do any due diligence in the first place.
The Real Truth Behind Apple's Growth [View article]
Yes, growth rate is slowing, but actual growth continues to accelerate, and that is the metric that investors should be looking at.
Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
That's the problem with group think emanating from institutions teaching the same thing, the same way.
What ALL of them, including the right honorable Sal Marvesti, don't realize, is that Apple is not a 3 year old startup growing at 50% per annum, and neither is it a mature, 30+ year old, dividend paying Blue Chip growing at 8% per annum. When did Harvard, Wharton or Chicago teach valuation of $500+ Billion Companies growing 40+% per annum (for 5+ years)? Where did they teach what happens to portfolios, limited by holding's per cent of the total, when they own an equity like AAPL? etc, etc, etc.
The deal is that all these "experts" refuse to think in any manner that crosses sacred lines, even though the firm they claim to 'know' hasn't operated between the lines for the last 16 years.
None of the sacred ratios reflect Apple's performance when compared to its competitors. Amazon has a PE of 3,600, IBM has a PS of 2.08, GOOG has a PC of 5.0. Meanwhile AAPL has a PE of 12, a PS of 3.24, and a PC of 17.4. Yet, Apple's gross revenue for calendar is larger than GOOG, NOK and DELL...combined, EPS is 30% higher than GOOG, INTC and AMZN...combined, Op Mar is 45% higher than GOOG, INTC and AMZN...combined. All of the S&P 500s growth during 2011 was attributed to APPL (went negative without Apple). The iPhone and iPad control 2/3s of smartphone and tablet profits. Finally Apple has a debt/equity ratio of ZERO, an ROE of 43% (same as AMZN, GOOG and INTC combined) and is expected to grow 30+% YoY during 2013 (higher than any of its competitors).
But that doesn't stop those with wall paper (or those looking for employment via articles submitted to Seeking Alpha) from proclaiming Apple's/AAPL's demise. Lord save us from the educated unemployed.
Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
No market is limitless, therefor no market can sustain exponential growth. However, all markets can sustain actual growth (by the leader) that is greater than the growth of all other players. Declining growth rates are not, in and of themselves, harbingers of doom, especially when the leader's actual growth is greater than the competition's.
Why Apple Will Beat The Street [View article]
Right now, the institutions are accumulating AAPL, both the stock and Call options (do the math on Put/Call ratios going back to Sept 21). Almost a million more Calls have been written, than have Puts. Retail accounts don't have the buying power, or knowledge, to generate this level of positive sentiment.
Why Apple Will Beat The Street [View article]
Why Apple Will Beat The Street [View article]