Senate Slams Apple On Tax Avoidance [View article]
Cook's answer to Congress grilling: "as a private company, Apple owes its shareholders the best possible way to innovate, to manage our operations and to manage our cash flows. Tax optimization comes as part of that duty, to do otherwise would mean breaching our corporate charter and the fiducial duty entrusted in the management team. Nothing we did was illegal, nothing we did was to move money outside of the US—as a matter of fact, we'd very much like to bring it back here. The Senate and Congress have the power to change the laws, to make American corporations more competitive on a global scale. It is now in your hands that you must implement those tax reforms, to level the playing field in the US. And stop blaming Apple."
Apple: Time To Get Optimistic Again [View article]
The spy isn't at Cupertino. The spy is in China. When you have ~10,000 relatively high-paid employees with a strong legal system, it's easy to control. But when you have 200,000 low-wage assembly worker, everything leaks. The iPhone 5 was entirely leaked before its introduction. Same with iPad 3 and iPad Mini.
Apple: Time To Get Optimistic Again [View article]
Let's change the timeframe of your questions to August 2012:
Has an analyst downgraded Apple in the last 10 business days? Plenty of upgrades in fact. Have investment vehicles such as funds divested of Apple shares in last 10 days? All time high institutional ownership. Funds keep buying. Has short interest increased in the last month? Yes Has Apple bought back stock and paid increased dividends to placate stock holders? Divy only. Has Apple's gross margin decreased more than 10% in the last quarter? Q-over-Q, yes. Has Apple's share in smart phone market decreased in the last quarter? Yes. Has Apple's share in the tablet market decreased in the last quarter? Yes. Has a competitor increased market share in last quarter? Yes, everybody except BlackBerry. Does Apple have any anti competition lawsuits pending? Yes Does Apple have a game changing product release pending next 90 days? Depending on how you count the iPhone 5. Does Apple have a top tier iPhone to wow customers and investors back to the fold in next 90 days? Yes Does Apple have anything coming out in next 90 days? Yes Does Apple have an answer to Blackberry MdM solution? Yes. The Apple Configurator.. Does Apple have an answer to BlackBerry BBM solution? Ever heard of iMessage? Available on iOS and Macs (does BBM work on Macs?) Does Apple have an answer to BlackBerry Automotive InfoTainment solutions? Please walk into a BMW showroom near you.
As you see, the answer ain't much different from today, yet it ran. Analysts are more backward looking than forward. If they do, most of them wouldn't have put a $900PT on Apple back then.
Apple: Time To Get Optimistic Again [View article]
Agree with your points, but I'd like to point out a few things which I think Apple was deservedly punished for:
* Bad execution: refreshing the entire product line between September and October were less than prudent. It lead to severe supply constraints and high ramp up costs. This also include manufacturing problems such as the hard-to-make iPhone 5, screen yields on the iPad Mini.
* Staying out of the spotlight: as the result of the point above, they had nothing new to introduce from October to June. That's 7 months of silence allowed competitors to leap ahead and create narrative against the Apple's story.
* Form over function: this one is debatable, but the iPhone 5 was significantly harder to make than previous iPhones, for the little gain in size that it offers. Apple could have simply extruded the iPhone 4's frame and fit the larger screen. This cause manufacturing costs to raise up substantially.
* Slow reaction: stocks have dropped off since September high but Apple did nothing for 3 months while the stock tanked. Then when things heat up with Einhorn's iPrefs in January, Tim Cook once again put out the flame by calling it a silly sideshow. Apple could have worked with Goldman Sachs in December and announced the capital plan in January to silence the critics. Instead, he bundled it with a moderately-bad ER by which time the momentum is almost gone.
* Product, product, product: what the market's seeing right now is bigger iPhone, smaller iPhone, and newer iPads. They are good products, but they don't provide the excitement that Apple has been known for. They need to show something entirely new to excite the market once more.
* Negotiation: the iBookStore was hard negotiation, but it's nothing compared to the media companies. The iRadio service and the fabled iTV (if it exists) are all constrained by the media company. Apple needs to sweeten the pot. Google just got it done today. And China Mobile is yet to sign up for the iPhone. The deal has been stale since Steve Jobs' last days.
I think the drop was intensified by management inaction and silence. A company can never lives with total secrecy about its future plan. It must feed some stories to the public to keep them interested. Apple's failed spectacularly in this regard.
More from Gundlach: Not concerned about inflation, he calls TIPS (TIP) "pretty bad" investments and says he'll be a buyer if the 10-year (TLT) yield bounces back to 2% (off 3 bps today to 1.94%). As for the inevitable Apple (AAPL -3.3%) question - he prefers the common stock to the just-issued bonds. Warren Buffett says he prays for stocks he owns to go down in price - it allows him and company repurchase programs to buy at better prices. Is Apple putting money to work the last couple of days? [View news story]
If there is any evidence, I'm not seeing it. Since the announcement of the buyback, Apple has traded in a familiar pattern: up on open, high around noon, then fade into close. I assumed it to mean Apple executed the buyback at the opening bell and noon to prime the market for the day.
Goldman Sachs is supposedly at the helms driving this buyback, but the results so far are lackluster at best. Apple struggled to gain a few points on an up day, but gave back all of May's gains in just 2 days.
The silence from Apple management is deadly. Since announcing the iPad Mini in October, Apple execs have not make any public statement other than on ER calls and investment conferences. Not a single word of support was given to the stock until the buy back plan.
Tim Cook said "trust us, we have great products in the pipeline", the market needs to see some to regain confidence. Google pre-announced their Glass a year in advance with great buzz. And today they showed some really great improvements in Maps. Apple needs to up their game. I know Apple Map is getting better, but it's too slow to catch up with the already market leader.
Opennheimer was (intentionally?) vague when asked about what price level the buyback will support. This doesn't put a floor into to the stock price and ordinary investors, 40% of them retail, are now feeling the crunch.
I'm losing confidence in the leadership team at Apple by the day. Granted stock price has little correlation with Apple's business, but those constant drops are causing real damage to the brand. Every one thought Apple has lost the cool factor, and that will affect the real business.
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
Apple may become a Microsoft story but there's an important distinction here: at peak, Microsoft's PE was over 100x; Apple's was 15x, in line with what Microsoft has been for the past 10 years.
At current pricing, Wall Street is completely discounting any new products in the pipeline, and assuming that Apple will lose its iPhone business. When one of those assumptions is broken, Apple's PE looks unreasonably low.
For my thesis, a stock with 9x forward PE, loyal customers, potential for new products, plenty of cash, willingness to go to debt to finance buy back, and 3% div make for a strong case of dividend growth.
Apple Earnings Preview: Guidance Achievable, Tim Cook Aims To Beat Expectations [View article]
A good article with decent analysis. I would like to add 2 things that I observed from last quarter's conference call:
1. Oppenheimer remarked that management guidance is based on sell-through, not sell-in:
"And as Tim talked about that was sell-in that was not sell-through, we are thinking about the business on a sell-through basis. So, don’t lose sight of the 1.6 billion"
2. The $1.6B Oppenheimer mentioned was the iPhone channel fill. This year they also have the iPad Mini, iPhone 4, iPhone 5, and iMac. Channel fill will obviously be bigger.
Apple Earnings Preview: Guidance Achievable, Tim Cook Aims To Beat Expectations [View article]
The Cirrus one got a little asterisk next to it that the market chose to ignore: "the customer moved on a new version of the product". Could be Apple playing rough and not to Cirrus about its update plan. Next, the 20 - 30% iPad mini demand drop was likely a Samsung's invention. The Digitimes article spends 1 paragraph citing an anonymous source with no further details, and 3 paragraphs on how good Samsung tablets are.
Like Tim Cook said: don't read too much into the supply chain. It's very complicated.
LG Display (LPL): Q1 net profit of 3.49B won ($3.1M) vs loss of 129B won a year earlier and vs consensus of 76B won. Sales +10% to 6.8T won. Operating profit -74% on quarter to 151B won, hurt by falling seasonal demand and weaker sales to Apple (AAPL), which accounts for a large part of LG's sales and is due to report its results tomorrow. Analyst Pak Yuak reckons that LG's panel sales for iPads rose 192% on year but that iPhone-screen sales dropped 33%. [View news story]
Did LG actually say that iPad panel orders were up and iPhone panels went down, or was that simply an analyst guestimate? Even then, the Reuter and WSJ seem to disagree with each other. Reuter said it was iPhone demand slowing, while WSJ says Apple is diversifying suppliers. So what is it?
I read last Quarter's conference call transcript and made the following observations: 1) Management guidance was based on sell-through (what sold to customers). Wall Street estimates are on sell in (sell through + channel inventory) 2) Apple had no iPhone 5 in channel for much of the quarter; and no iPhone 4 in the channel at all during the quarter. iMac, MacBook Pros, and iPad mini were supplied constrained for the quarter as well. iMac has a 700K backlog which may be captured this quarter. 3) Last year Mar Quarter inventory fill for iPhone alone was $2.6B. This year they have 5 products to fill, not to mention a bigger channel. 4) With one fewer week, supply constraints, and compressed margin (38.6% vs. 44.7%), Apple still delivered a flat EPS YoY in the Dec quarter. The Dec 2011 quarter's gross margin was 38.5%, and there was no iPad Mini, nor massive product refresh in the quarter. Nobody complained back then.
Those are all taken straight out of the CC. I didn't make any of those stuffs up. No assumptions involved. I leave you here to draw your own conclusions.
Having digested more bad news and 4 days away from an FQ2 report expected to show an 18% Y/Y EPS drop, "investors are suspicious about the ‘E’" in Apple's (AAPL) P/E, notes fund manager Lawrence Creatura. But for now, Apple (AAPL) trades at just 5.6x FY13 EPS after backing out cash. Or as BI puts it, Apple needs only 6 years to produce enough cash to match its enterprise value, if it was simply produced at FY12's rate. The FQ2 report could include light guidance for an FQ3 that's about to see Samsung's Galaxy S IV go on sale, and could see iPhone/iPad buyers delay purchases ahead of refreshes. Is that enough to justify a valuation lower than Dell's? [View news story]
Management is hasn't done anything during the whole ordeal but that's not to say that they will not. The issue is drummed loud enough now that Average Joe thinks there's something wrong at Apple (hints: there's not any with Apple the company).
The short interest recently shot to 1.28 days-to-cover. It historical average was 1 day. The last time it was this high was in mid-August 2012 (I can't remember anything happened then, other than the imminent release of the iPhone 5). So... shorties short on good news and bad.
When (not if) management decides to act, and jack up the dividends or announce they have authorized a new buy back plan, there will be a jam at the exit. Of course, Apple *may* also beat the estimates, now that it's low enough. Apple has not missed their own guidance for several years. They know their business better than anyone else.
Apple $395: Time To Give Up And Abandon Ship? [View article]
At 2.5% it's barely anything. High is anything above 4% these days. Apple generates more than enough cash in a single quarter to pay for the annual dividend.
Nano SIM is an industry standard. How else would you be able to buy it from every carrier in US, Europe and Asia? The nano SIM card wasn't initially available when the iPhone 5 launch, but you can now walk into every mobile phone store to get it. My Hong Kong friends told me about it some time ago.
About sharing photos: have you ever heard of Photo Stream? Available any place where there is a web browser. And contrary to your statement, a lot of people go all Apple for the integration. In fact, the halo effect of iPhone is stronger than any brand out there.
Senate Slams Apple On Tax Avoidance [View article]
Senate Slams Apple On Tax Avoidance [View article]
Big government is scarily terrible with money management.
Apple: Time To Get Optimistic Again [View article]
Apple: Time To Get Optimistic Again [View article]
Apple: Time To Get Optimistic Again [View article]
Has an analyst downgraded Apple in the last 10 business days? Plenty of upgrades in fact.
Have investment vehicles such as funds divested of Apple shares in last 10 days? All time high institutional ownership. Funds keep buying.
Has short interest increased in the last month? Yes
Has Apple bought back stock and paid increased dividends to placate stock holders? Divy only.
Has Apple's gross margin decreased more than 10% in the last quarter? Q-over-Q, yes.
Has Apple's share in smart phone market decreased in the last quarter? Yes.
Has Apple's share in the tablet market decreased in the last quarter? Yes.
Has a competitor increased market share in last quarter? Yes, everybody except BlackBerry.
Does Apple have any anti competition lawsuits pending? Yes
Does Apple have a game changing product release pending next 90 days? Depending on how you count the iPhone 5.
Does Apple have a top tier iPhone to wow customers and investors back to the fold in next 90 days? Yes
Does Apple have anything coming out in next 90 days? Yes
Does Apple have an answer to Blackberry MdM solution? Yes. The Apple Configurator..
Does Apple have an answer to BlackBerry BBM solution? Ever heard of iMessage? Available on iOS and Macs (does BBM work on Macs?)
Does Apple have an answer to BlackBerry Automotive InfoTainment solutions? Please walk into a BMW showroom near you.
As you see, the answer ain't much different from today, yet it ran. Analysts are more backward looking than forward. If they do, most of them wouldn't have put a $900PT on Apple back then.
Apple: Time To Get Optimistic Again [View article]
* Bad execution: refreshing the entire product line between September and October were less than prudent. It lead to severe supply constraints and high ramp up costs. This also include manufacturing problems such as the hard-to-make iPhone 5, screen yields on the iPad Mini.
* Staying out of the spotlight: as the result of the point above, they had nothing new to introduce from October to June. That's 7 months of silence allowed competitors to leap ahead and create narrative against the Apple's story.
* Form over function: this one is debatable, but the iPhone 5 was significantly harder to make than previous iPhones, for the little gain in size that it offers. Apple could have simply extruded the iPhone 4's frame and fit the larger screen. This cause manufacturing costs to raise up substantially.
* Slow reaction: stocks have dropped off since September high but Apple did nothing for 3 months while the stock tanked. Then when things heat up with Einhorn's iPrefs in January, Tim Cook once again put out the flame by calling it a silly sideshow. Apple could have worked with Goldman Sachs in December and announced the capital plan in January to silence the critics. Instead, he bundled it with a moderately-bad ER by which time the momentum is almost gone.
* Product, product, product: what the market's seeing right now is bigger iPhone, smaller iPhone, and newer iPads. They are good products, but they don't provide the excitement that Apple has been known for. They need to show something entirely new to excite the market once more.
* Negotiation: the iBookStore was hard negotiation, but it's nothing compared to the media companies. The iRadio service and the fabled iTV (if it exists) are all constrained by the media company. Apple needs to sweeten the pot. Google just got it done today. And China Mobile is yet to sign up for the iPhone. The deal has been stale since Steve Jobs' last days.
I think the drop was intensified by management inaction and silence. A company can never lives with total secrecy about its future plan. It must feed some stories to the public to keep them interested. Apple's failed spectacularly in this regard.
More from Gundlach: Not concerned about inflation, he calls TIPS (TIP) "pretty bad" investments and says he'll be a buyer if the 10-year (TLT) yield bounces back to 2% (off 3 bps today to 1.94%). As for the inevitable Apple (AAPL -3.3%) question - he prefers the common stock to the just-issued bonds. Warren Buffett says he prays for stocks he owns to go down in price - it allows him and company repurchase programs to buy at better prices. Is Apple putting money to work the last couple of days? [View news story]
Goldman Sachs is supposedly at the helms driving this buyback, but the results so far are lackluster at best. Apple struggled to gain a few points on an up day, but gave back all of May's gains in just 2 days.
The silence from Apple management is deadly. Since announcing the iPad Mini in October, Apple execs have not make any public statement other than on ER calls and investment conferences. Not a single word of support was given to the stock until the buy back plan.
Tim Cook said "trust us, we have great products in the pipeline", the market needs to see some to regain confidence. Google pre-announced their Glass a year in advance with great buzz. And today they showed some really great improvements in Maps. Apple needs to up their game. I know Apple Map is getting better, but it's too slow to catch up with the already market leader.
Opennheimer was (intentionally?) vague when asked about what price level the buyback will support. This doesn't put a floor into to the stock price and ordinary investors, 40% of them retail, are now feeling the crunch.
I'm losing confidence in the leadership team at Apple by the day. Granted stock price has little correlation with Apple's business, but those constant drops are causing real damage to the brand. Every one thought Apple has lost the cool factor, and that will affect the real business.
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
At current pricing, Wall Street is completely discounting any new products in the pipeline, and assuming that Apple will lose its iPhone business. When one of those assumptions is broken, Apple's PE looks unreasonably low.
For my thesis, a stock with 9x forward PE, loyal customers, potential for new products, plenty of cash, willingness to go to debt to finance buy back, and 3% div make for a strong case of dividend growth.
Apple Earnings Preview: Guidance Achievable, Tim Cook Aims To Beat Expectations [View article]
1. Oppenheimer remarked that management guidance is based on sell-through, not sell-in:
"And as Tim talked about that was sell-in that was not sell-through, we are thinking about the business on a sell-through basis. So, don’t lose sight of the 1.6 billion"
2. The $1.6B Oppenheimer mentioned was the iPhone channel fill. This year they also have the iPad Mini, iPhone 4, iPhone 5, and iMac. Channel fill will obviously be bigger.
Apple Earnings Preview: Guidance Achievable, Tim Cook Aims To Beat Expectations [View article]
Like Tim Cook said: don't read too much into the supply chain. It's very complicated.
LG Display (LPL): Q1 net profit of 3.49B won ($3.1M) vs loss of 129B won a year earlier and vs consensus of 76B won. Sales +10% to 6.8T won. Operating profit -74% on quarter to 151B won, hurt by falling seasonal demand and weaker sales to Apple (AAPL), which accounts for a large part of LG's sales and is due to report its results tomorrow. Analyst Pak Yuak reckons that LG's panel sales for iPads rose 192% on year but that iPhone-screen sales dropped 33%. [View news story]
Apple Is Where The Value Is At [View article]
1) Management guidance was based on sell-through (what sold to customers). Wall Street estimates are on sell in (sell through + channel inventory)
2) Apple had no iPhone 5 in channel for much of the quarter; and no iPhone 4 in the channel at all during the quarter. iMac, MacBook Pros, and iPad mini were supplied constrained for the quarter as well. iMac has a 700K backlog which may be captured this quarter.
3) Last year Mar Quarter inventory fill for iPhone alone was $2.6B. This year they have 5 products to fill, not to mention a bigger channel.
4) With one fewer week, supply constraints, and compressed margin (38.6% vs. 44.7%), Apple still delivered a flat EPS YoY in the Dec quarter. The Dec 2011 quarter's gross margin was 38.5%, and there was no iPad Mini, nor massive product refresh in the quarter. Nobody complained back then.
Those are all taken straight out of the CC. I didn't make any of those stuffs up. No assumptions involved. I leave you here to draw your own conclusions.
Having digested more bad news and 4 days away from an FQ2 report expected to show an 18% Y/Y EPS drop, "investors are suspicious about the ‘E’" in Apple's (AAPL) P/E, notes fund manager Lawrence Creatura. But for now, Apple (AAPL) trades at just 5.6x FY13 EPS after backing out cash. Or as BI puts it, Apple needs only 6 years to produce enough cash to match its enterprise value, if it was simply produced at FY12's rate. The FQ2 report could include light guidance for an FQ3 that's about to see Samsung's Galaxy S IV go on sale, and could see iPhone/iPad buyers delay purchases ahead of refreshes. Is that enough to justify a valuation lower than Dell's? [View news story]
The short interest recently shot to 1.28 days-to-cover. It historical average was 1 day. The last time it was this high was in mid-August 2012 (I can't remember anything happened then, other than the imminent release of the iPhone 5). So... shorties short on good news and bad.
When (not if) management decides to act, and jack up the dividends or announce they have authorized a new buy back plan, there will be a jam at the exit. Of course, Apple *may* also beat the estimates, now that it's low enough. Apple has not missed their own guidance for several years. They know their business better than anyone else.
Apple $395: Time To Give Up And Abandon Ship? [View article]
Apple Should Pay Its Tax Bill [View article]
About sharing photos: have you ever heard of Photo Stream? Available any place where there is a web browser. And contrary to your statement, a lot of people go all Apple for the integration. In fact, the halo effect of iPhone is stronger than any brand out there.