Since84
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To infinity and beyond!
Posts: 3,933
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Post by Since84 on Feb 1, 2016 3:29:09 GMT -8
Good morning everyone. The Nikkei is GREEN, but RED everywhere else. AAPL is RED trading at 96.68 -0.66 (-0.68%). It's Monday morning, nothin in the news... unless you count Will Apple Go From Darling to Dud? ...which happens to rhyme with Fact or FUD? The latest round brought to us by Andrew Cave at the Forbes Contributor Network. Have a great day. Let's make money.
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Feb 1, 2016 3:58:04 GMT -8
Context is always important. This morning Bloomberg has Marissa Mayer to Make Case That Yahoo Can Be Turned Around. Some key tidbits from the article: "[Mayer] has overseen falling sales in 7 of the past 10 quarters" "While boasting more than 1 billion users, Yahoo has struggled to keep pace with growth in online advertising, with Yahoo’s share of the U.S. market projected to shrink to 3.5 percent in 2017 from 5.1 percent in 2014, according to EMarketer Inc. Analysts project 2015 revenue, minus sales passed on to partners, will fall 8.2 percent to $4.04 billion, its biggest decline since 2009." "Mayer has already been trimming costs, reducing the workforce by more than 30 percent since she joined and closing some sites." So how do the gods of wall street value Yahoo? In all fairness share price has dropped about 1/3 since April 2015, but its current PE? 118.04. Still believe in Karma? Think AAPL is 'fairly' valued? Context is always important.
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Post by phoebear611 on Feb 1, 2016 4:41:30 GMT -8
I look at Sandberg and Mayer and see two people who could not be more opposite. Mayer should be replaced - she had her shot and produced nothing. What a mess over there.
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Feb 1, 2016 6:32:34 GMT -8
Kiplinger has Apple’s Stock Is Becoming Too Cheap to Ignore. Starts from oft repeated truisms like "so many people now own the [iPhone]—with more than 500 million sold around the world—that sales growth may have peaked" to reach the conclusion that "[Apple] is not the buy-and-hold stock it was 10 years ago. But it’s lined up nicely for the next 12 to 18 months.” Meanwhile Kirk Burgess published Apple Inc, going for free within 8 years. Could we be in the midst of a stealth LBO by Apple Management? The number of shares outstanding is down over 15% from the October 2012 peak of 6.585B.
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Post by sponge on Feb 1, 2016 8:28:39 GMT -8
I don't see the stock staying the same for 8 years.
Also Apple is paying a premium for the stock. For all of 2015 they paid 25% more then market price. So no matter how aggressively they buy back, they can't buy back enough to go private.
Glad to see the buyback, and they wisely saved the ammo for more this quarter and even the next. These buybacks will be well worth it in the next decade.
We could see a bigger then usual dividend increase to help stop the bleeding. But in the end only growing earnings will get us back on track. At this point it is too early to say when that quarter of increased earnings will happen.
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Post by rob_london on Feb 1, 2016 9:18:15 GMT -8
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Post by macster on Feb 1, 2016 9:21:42 GMT -8
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Post by deasys on Feb 1, 2016 9:55:30 GMT -8
But in the end only growing earnings will get us back on track. At this point it is too early to say when that quarter of increased earnings will happen. I'm pretty sure Apple has done nothing but increase both earnings and EPS for the last 40 quarters or so. Are we talking about the same company?
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Post by chasmac on Feb 1, 2016 10:10:38 GMT -8
But in the end only growing earnings will get us back on track. At this point it is too early to say when that quarter of increased earnings will happen. I'm pretty sure Apple has done nothing but increase both earnings and EPS for the last 40 quarters or so. Are we talking about the same company?
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Post by sponge on Feb 1, 2016 10:13:36 GMT -8
But in the end only growing earnings will get us back on track. At this point it is too early to say when that quarter of increased earnings will happen. I'm pretty sure Apple has done nothing but increase both earnings and EPS for the last 40 quarters or so. Are we talking about the same company? Yes for the past. But they guided 15% drop and we will see what they guide for July.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,429
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Post by chinacat on Feb 1, 2016 10:23:47 GMT -8
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Post by rob_london on Feb 1, 2016 11:16:13 GMT -8
Argus Research report on Apple: "Our more forward-looking, two-stage discounted free cash flow model renders a value north of $250 per share. Our blended fundamental valuation model points to a price above $235, in a rising trend." Neil Cybart: "Apple's broken narrative" www.aboveavalon.com/notes/2016/2/01/apples-broken-narrative
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Post by deasys on Feb 1, 2016 11:34:48 GMT -8
I'm pretty sure Apple has done nothing but increase both earnings and EPS for the last 40 quarters or so. Are we talking about the same company? Thanks for the graphic confirmation.
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Post by archibaldtuttle on Feb 1, 2016 11:39:54 GMT -8
I'm pretty sure Apple has done nothing but increase both earnings and EPS for the last 40 quarters or so. Are we talking about the same company? Yes for the past. But they guided 15% drop and we will see what they guide for July. No for the past either - in 2013 they had some quarters of decreasing y/y growth, as you can see if you look at the charts closely.
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Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Feb 1, 2016 11:49:41 GMT -8
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Post by sponge on Feb 1, 2016 12:15:42 GMT -8
Yes for the past. But they guided 15% drop and we will see what they guide for July. No for the past either - in 2013 they had some quarters of decreasing y/y growth, as you can see if you look at the charts closely. I am not disagreeing with the chart. WS anticipated a slowdown last June and we have confirmed that last week. When we start to see revenue and earnings grow after reaching bottom, we will start to move up. I am talking above the 200 MA. Today it is around 118, but by Oct if we don't get to 115 and hold it, the 200 MA will be at 100 pps. The world and US economy will keep us in check no matter how cool the new iPhone 7 is or how undervalued we complain about being.
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Post by Luckychoices on Feb 1, 2016 12:28:24 GMT -8
I'm thinking it's Chowdry and Wall Street that's insane... Is Apple CEO Tim Cook Insane...or Is Wall Street? (Or is Trip Chowdry of Global Equities Research?) www.fool.com/investing/general/2016/02/01/is-apple-ceo-tim-cook-insane-or-is-wall-street.aspx?source=eogyholnk0000001&utm_source=yahoo&utm_medium=feed&utm_campaign=articleShare buyback programs have been hugely popular in the post-crisis era. Unfortunately, they're one the most misunderstood topics when it comes investing and corporate finance.
Many corporate managements don't understand them (or they act as if they don't) and neither do many Wall Street analysts, despite often having an academic background in finance.
That misunderstanding sparked one analyst, Trip Chowdry of Global Equities Research, to suggest that Apple chief finance officer Luca Maestri and, by implication, CEO Tim Cook, are behaving like lunatics.
Obviously, share buybacks and dividends are not working. And somehow, the current CFO thinks doing the same thing over and over again may generate different results.
Why does Chowdry believe "share buybacks and dividends are not working"? === Apple stock has fallen from $132 to $115, thereby erasing about $110 Billion in shareholder value, and Apple's management has done nothing to address the erosion of shareholder value. Apple's Management Team and Board have embarked on a huge share buyback program, but the buyback program is not working. [...] hareholders have lost $110 Billion. === Indeed, anyone with an Internet connection can observe Apple's stock price on a second-by-second basis. In that context, there is a quick and straightforward litmus test for whether or not a buyback is working: Is the stock higher or lower than it was before the share repurchase program was announced?
The problem is that while this "quick and straightforward" litmus test is quick, it's also completely wrongheaded. Why? The following observation is crucially important:
The first objective of an intelligent share buyback program isn't to raise the company's share price, nor is it simply to reduce the number of shares outstanding. Perhaps that sounds counterintuitive to you; perhaps you even think it's an outright falsehood -- in which case I urge you to think about the following statement:
An intelligent share buyback program is the result of a capital allocation process that identifies the company's own shares as a superior use of shareholders' capital, i.e., repurchasing shares has an expected return that is at least equal to that of the firm's other possible uses of cash (including returning the cash to shareholders via dividends). It comes down to this simple question (simple conceptually, that is): Is the company getting a "good" expected return on its investment if it decides to repurchase its own shares? The answer to that question depends on a comparison between the stock's market price and its intrinsic value.
(If you'd like to learn more about the topic, I strongly recommend you review Warren Buffett's 1999 Chairman's Letter to shareholders of Berkshire Hathaway.)
Apple is actually one of the smartest companies out there in terms of the way in which it thinks about and implements its share repurchase program.
For example, a year ago, when the stock fell 8%, following the release its quarterly results, the company was "aggressive" and "opportunistic" (Tim Cook's words) in buying back $14 billion worth of shares over a two-week period.
Chowdry has it backwards: When it comes to share buybacks, Apple's management are no lunatics. In corporate America at large, and on Wall Street, however, the lunatics have overrun the asylum.
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SomeJuan
Member
Taking a nap…
Posts: 321
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Post by SomeJuan on Feb 1, 2016 13:06:00 GMT -8
2nd largest market cap, sigh!
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Post by dreamRaj on Feb 1, 2016 13:07:18 GMT -8
Seeing the AH action, is Google bigger than Apple and the most valuable company now?
Unfreakinbelievable!
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Post by appleaddict on Feb 1, 2016 13:11:42 GMT -8
Seeing the AH action, is Google bigger than Apple and the most valuable company now? Unfreakinbelievable! But what about the law of large numbers? Anyone? Melissa Lee?
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Post by phoebear611 on Feb 1, 2016 13:19:58 GMT -8
Seeing the AH action, is Google bigger than Apple and the most valuable company now? Unfreakinbelievable! But what about the law of large numbers? Anyone? Melissa Lee? It only applies to Apple and to NO OTHER company in this universe.
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Post by artman1033 on Feb 1, 2016 13:39:47 GMT -8
Seeing the AH action, is Google bigger than Apple and the most valuable company now? Unfreakinbelievable! YES! GOOG = 697,025,000 X $797.00 = $554,908,573,000 AAPL = $534,660,000,000
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Post by incorrigible on Feb 1, 2016 13:53:22 GMT -8
Seeing the AH action, is Google bigger than Apple and the most valuable company now? Unfreakinbelievable! YES! GOOG = 697,025,000 X $797.00 = $554,908,573,000 AAPL = $534,660,000,000 Makes sense ... Revenue 12 months ending 2014-12-31 GOOGL 66,001.00 AAPL 233,715.00 Net Income 52 weeks ending 2015-09-26 GOOGL 14,444.00 AAPL 53,394.00 :/
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Post by tuffett on Feb 1, 2016 14:01:45 GMT -8
The following companies have outperformed AAPL over the last 5 years.
GOOGL AMZN NFLX FB MSFT
AAPL has also been more volatile than any of the above. I consider 5 years a long enough time to form some conclusions. AAPL has been dead money in the face of its competitors. Profits don't matter. It's all about Wall Street believing in the narrative and Apple's management has clearly failed epically in getting the message across.
It's time for something to change. Enough with the secrecy and the cute one-liners about making the best products. Open up and show us what you're working on. It's impossible to keep it a secret anyway with all the leaks.
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Post by incorrigible on Feb 1, 2016 14:26:34 GMT -8
The following companies' STOCK have outperformed AAPL over the last 5 years. FIFY
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Post by tuffett on Feb 1, 2016 15:10:18 GMT -8
The following companies' STOCK have outperformed AAPL over the last 5 years. FIFY That's really all I care about. This is the Apple Finance Board.
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Post by david on Feb 1, 2016 15:25:50 GMT -8
Open up and show us what you're working on. Not gonna happen.
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Post by macwire on Feb 1, 2016 15:51:55 GMT -8
Argus Research report on Apple: "Our more forward-looking, two-stage discounted free cash flow model renders a value north of $250 per share. Our blended fundamental valuation model points to a price above $235, in a rising trend." Neil Cybart: "Apple's broken narrative" www.aboveavalon.com/notes/2016/2/01/apples-broken-narrativeConfirmation bias confirmation bias confirmation bias
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Post by macwire on Feb 1, 2016 15:52:46 GMT -8
The following companies have outperformed AAPL over the last 5 years. GOOGL AMZN NFLX FB MSFT AAPL has also been more volatile than any of the above. I consider 5 years a long enough time to form some conclusions. AAPL has been dead money in the face of its competitors. Profits don't matter. It's all about Wall Street believing in the narrative and Apple's management has clearly failed epically in getting the message across. It's time for something to change. Enough with the secrecy and the cute one-liners about making the best products. Open up and show us what you're working on. It's impossible to keep it a secret anyway with all the leaks. Ex f'n actly
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Post by deasys on Feb 1, 2016 17:19:16 GMT -8
No for the past either - in 2013 they had some quarters of decreasing y/y growth, as you can see if you look at the charts closely. I am not disagreeing with the chart. WS anticipated a slowdown last June Actually, Wall Street has been anticipating a slowdown since 2007* and next quarter, it may finally arrive—my, those Wall Streeters are so prescient! * That's when share price began to fail to track EPS.
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