Asked on the earnings call if a large increase in hedging activity is a sign the company believes interest rates are set to rise, American Capital (AGNC +1.4%) CIO Gary Kain says not necessarily. The Fed's iron grip on the yield curve has driven bond volatility so low and made hedging so cheap, it doesn't make sense not to hedge - it's a nearly-free call on the chance of higher rates. This just in: Gary Kain knows his business. [View news story]
Gary "Coke" Kain is the man! Guy swaps rates like your mom swaps hair pieces.
David Einhorn's Interview About Apple's 'Cash Problem' [View instapost]
Hopefully the AAPL press release represents a change within AAPL management regarding their attitude towards shareholders. Many of AAPL's shareholders are also loyal customers. Return money to the shareholders and they will use it to buy more iStuff. For as good as the company is with marketing its brand, one would think they would have done more to stem the discontent with their cash allocation policies before now. AAPL has not marketed their stock well as of late. It's still too early to tell the stock's fate, but AAPL needs to follow-through beyond their $10billion buyback considering the stock is roughly flat YOY vs a double digit S&P return. I don't think that following through on better net cash management and "making products their customers love" is too much to ask.
Apple (AAPL +2.4%) responds to David Einhorn's letter opposing Proposal 2 within its shareholder meeting proxy by insisting the proposal won't prevent the issuing of preferred stock, but simply requires that such a move receive shareholder approval. The company adds it will "thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock," and has been "in active discussions about returning additional cash to shareholders." Shares spiked higher into the close. (Einhorn's letter) [View news story]
Hopefully this press release represents a change within AAPL management regarding their attitude towards shareholders. Many of AAPL's shareholders are also loyal customers. Return money to the shareholders and they will use it to buy more iStuff. For as good as the company is with marketing its brand, one would think they would have done more to stem the discontent with their cash allocation policies before now. AAPL has not marketed their stock well as of late. It's still too early to tell the stock's fate, but AAPL needs to follow-through beyond their $10billion buyback considering the stock is roughly flat YOY vs a double digit S&P return. I don't think that following through on better net cash management and "making products their customers love" is too much to ask.
This is the best SA article I have ever read. Michael, don't take the advice of random commenters on SA. You have a sound understanding of the most important facets of finance. I would invest with you as long as you kept an independent mindset, conducted the same organic research you provided to your readers, and had the same skin in the game. Good luck in the future, I look forward to your research.
How Much Does Apple Make? A DuPont Analysis [View article]
I think you are confusing the cheerleaders on CNBC with WS analysts. Media writes the tabloids. Cut and paste an example from one of your so called analysts.
How Much Does Apple Make? A DuPont Analysis [View article]
WS analysts do this analysis like it or not. Sure the WS guys predict incorrectly sometimes, but to assume they are idiotic is even more idiotic. I'm no defender of WS and don't believe the crooks should have been bailed out, but analysts that work on WS are almost always very bright, talented, and capable people.
Microsoft's Surface Pro Will Be A Success [View article]
I'm only engaging in an exercise that a customer would. MSFT is going to make office for iOS, because they know the surface is not going to be widely adopted.
Dissecting AutoZone's Earnings Growth (The Results May Surprise You) [View article]
I've thought that AAPL should buyback with their tremendous amount of cash. It would be interesting to extrapolate eps given a level of buybacks in the future or to have looked at EPS of past quarters given buybacks occurred at some point and some price in the quarter. I prefer buybacks to dividends, certainly apple has the cash and BS. I would even recommend AAPL take out debt to pay for buybacks because at the end of the day it would lower their cost of capital and increase EPS rather drastically. I look forward to your other articles, and think too little time is spent analyzing the drivers of the a business and the trends in those drivers relative to the price trend.
Dissecting AutoZone's Earnings Growth (The Results May Surprise You) [View article]
Really interesting article. Very good analysis backed up with graphs and explanation. It's no secret that AZO buybacks have been a boon for the stock, but it is reassuring to see management emphasize consistent operating margins, increasing store openings, and increasing SSS. Thank you for this insightful article.
Microsoft's Surface Pro Will Be A Success [View article]
The Surface Pro is DOA. Surface RT doesn't offer value either. I love my win 7 laptop that I got from walmart for $299. It offers acceptable performance at the right price. The surface is missing the value part of the equation. If the pro version cost more than an iPad it will be a niche product that will not be widely adopted by anyone.
Apple: Margin, Pricing And Product Strategy [View article]
The reason they will make low-spec low-cost iPhones is to increase their share of the total smartphone pie. AAPL will make the low-cost low-spec iPhone with relatively high margins. They will produce a better product than their competitors. It seems obvious AAPL management would not make the China only phone if the risk to the value of the brand was greater than the reward of expanding the market. Even before this month's ER I think it is safe to say that the iPad-mini has been a fantastic new product. Like the author stated, the mini canabalizes existing products. The question is to what extent? Apple's innovation and new products help Apple first and foremost, and hurt their competitors as a result. Apple's recent strategic actions capitalize on their historic competitive advantages with regard to ecosystem, manufacturing, and brand. Apple's products are far from perfect, but their execution of their core businesses is second to none. Maps is an utter disaster. However, at one point I owned a Samsung Droid Charge, and that POS could not stay charged long enough for me to use any app. Samsung has improved their products immensely and they have drastically closed the quality gap on Apple. I'm skeptical of their ability to build on their success without fuller vertical integration and having to compete with AAPL in more markets. AAPL's vertical integration: hardware, software, and retail is where my money is. MSFT sees it too. Surface, windows 8 RT, and retail channel are proof of this.
From a strategy and value standpoint it seems clear to me that Apple is doing what it takes so that fears concerning its future lack of growth are overblown.
U.S. retail Windows notebook sales ended up falling 11% Y/Y during the holiday season (Nov. 18-Dec. 22), estimates NPD; that's just a little better than the 13% drop estimated for Windows PC sales from the time of the Win. 8 launch to the first week of December, and suggests the OS hasn't don't much yet to halt tablet cannibalization. Touchscreen notebooks accounted for just 4.5% of Win. 8 sales. MacBook sales fell 6%, but their ASP rose nearly $100 to $1,419. Flat-panel TV sales fell 1.5%, and their ASP more than 8% to $364. [View news story]
U.S. retail Windows notebook sales ended up falling 11% Y/Y during the holiday season (Nov. 18-Dec. 22), estimates NPD; that's just a little better than the 13% drop estimated for Windows PC sales from the time of the Win. 8 launch to the first week of December, and suggests the OS hasn't don't much yet to halt tablet cannibalization. Touchscreen notebooks accounted for just 4.5% of Win. 8 sales. MacBook sales fell 6%, but their ASP rose nearly $100 to $1,419. Flat-panel TV sales fell 1.5%, and their ASP more than 8% to $364. [View news story]
MSFT has touted their touchscreen laptops as innovation. Netbooks are a type of tweener that has been replaced by tablets with bluetooth keyboards. Win 8 was designed for touchscreen hardware. The surface isn't that useful relative to other tablets. I wish MSFT would massively improve office instead of putting out a marginally better OS on marginal hardware that sells only to users on the margin.
What's In Store For Apple Investors In FY13 [View article]
I think buy backs to shrink the share count would be a good idea. With rates as low as they are and all the cash AAPL has overseas, AAPL should decrease their net cash position and issue a 30 year bond to fund the buybacks. Deferring their tax liability is smart, but it should not inhibit AAPL from buybacks that will improve their cost of capital. As opposed to raising their dividend they should initiate buybacks. Their net cash position and marketable securities are not earning the same after tax return that a well timed buyback could.
Asked on the earnings call if a large increase in hedging activity is a sign the company believes interest rates are set to rise, American Capital (AGNC +1.4%) CIO Gary Kain says not necessarily. The Fed's iron grip on the yield curve has driven bond volatility so low and made hedging so cheap, it doesn't make sense not to hedge - it's a nearly-free call on the chance of higher rates. This just in: Gary Kain knows his business. [View news story]
David Einhorn's Interview About Apple's 'Cash Problem' [View instapost]
Apple (AAPL +2.4%) responds to David Einhorn's letter opposing Proposal 2 within its shareholder meeting proxy by insisting the proposal won't prevent the issuing of preferred stock, but simply requires that such a move receive shareholder approval. The company adds it will "thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock," and has been "in active discussions about returning additional cash to shareholders." Shares spiked higher into the close. (Einhorn's letter) [View news story]
Lessons Learned From An Apple Bull [View article]
How Much Does Apple Make? A DuPont Analysis [View article]
How Much Does Apple Make? A DuPont Analysis [View article]
Apple Earnings Forecast: $55B Revenue And 48M iPhones Sold [View article]
Microsoft's Surface Pro Will Be A Success [View article]
Dissecting AutoZone's Earnings Growth (The Results May Surprise You) [View article]
Dissecting AutoZone's Earnings Growth (The Results May Surprise You) [View article]
Microsoft's Surface Pro Will Be A Success [View article]
Apple: Margin, Pricing And Product Strategy [View article]
Maps is an utter disaster. However, at one point I owned a Samsung Droid Charge, and that POS could not stay charged long enough for me to use any app. Samsung has improved their products immensely and they have drastically closed the quality gap on Apple. I'm skeptical of their ability to build on their success without fuller vertical integration and having to compete with AAPL in more markets. AAPL's vertical integration: hardware, software, and retail is where my money is. MSFT sees it too. Surface, windows 8 RT, and retail channel are proof of this.
From a strategy and value standpoint it seems clear to me that Apple is doing what it takes so that fears concerning its future lack of growth are overblown.
U.S. retail Windows notebook sales ended up falling 11% Y/Y during the holiday season (Nov. 18-Dec. 22), estimates NPD; that's just a little better than the 13% drop estimated for Windows PC sales from the time of the Win. 8 launch to the first week of December, and suggests the OS hasn't don't much yet to halt tablet cannibalization. Touchscreen notebooks accounted for just 4.5% of Win. 8 sales. MacBook sales fell 6%, but their ASP rose nearly $100 to $1,419. Flat-panel TV sales fell 1.5%, and their ASP more than 8% to $364. [View news story]
U.S. retail Windows notebook sales ended up falling 11% Y/Y during the holiday season (Nov. 18-Dec. 22), estimates NPD; that's just a little better than the 13% drop estimated for Windows PC sales from the time of the Win. 8 launch to the first week of December, and suggests the OS hasn't don't much yet to halt tablet cannibalization. Touchscreen notebooks accounted for just 4.5% of Win. 8 sales. MacBook sales fell 6%, but their ASP rose nearly $100 to $1,419. Flat-panel TV sales fell 1.5%, and their ASP more than 8% to $364. [View news story]
What's In Store For Apple Investors In FY13 [View article]