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Post by jeffi on Jan 27, 2013 22:12:24 GMT -8
Cash flow from operations grew 30% from last year. That is not important but the fact that we generated 23 billion in cash and added 16 billion to the balance is. And the reason they did that was because they improved efficiency in operations. TC and OP are running a very well oiled machine that is generating cash. There is not other company on earth able to do this and get better each quarter. Forget iPhone and iPad numbers. Concentrate on the cash cow. The stock will eventually come back when the folks who wanted to get rich over night are gone. I am talking to anyone who bought shares and options in the last two years. I was one of them in options and learned my lesson. Buy and HOld the best company in the world. Ovi gets it. Ovi gets it? The Sponge has publically stated, because of leverage (and options) he is back to 2009 levels. That is approximately 1/3 of today's price (guess based on average price). In other words, his portfolio would be 3x higher without leverage. Then he states "The stock will eventually come back when the folks who wanted to get rich over night are gone." No offense, but Isn't that you?
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Post by jeffi on Jan 27, 2013 22:13:35 GMT -8
When does the Monday string start? It's Monday now for over an hour!
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Post by bryanyc on Jan 27, 2013 22:17:51 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED, PART 2. Now, Apple did not provide EPS guidance for the upcoming March quarter, this is because I believe management does not want its results to be measured by this one metric (which is the only metric a broad sector of the investing public focuses on). I also believe that management, in statements during the conference call, wants Apple performance to be judged differently that it has been in the past. WS clearly has a hardware bias in judging the value of products and competitor strength. I think, because of the realigning of revenue categories within Apple's Income Statement, that management wants the performance issue defined by two factors: hardware and software. In study after study, the iPhone dominates in online usage and app consumption (by both units purchased and dollars spent). Those are usage value added considerations addressed by software, that drives consumer buying decisions. Apple has the largest library of proprietary mobile software applications that consumers are spending their dollars on. More third party developers are writing for iOS and receiving far more compensation than they are from Android. Lastly, Apple is breaking out China as a separate geographic market. I think the issue here is that North America's, Europe's and Asia's (excepting China) market for premium handsets is bumping its head against a carrier technology ceiling. I'm referring to the rollout of LTE networks. LTE enhances the value of software and apps, without LTE the value of higher performing handsets are diminished in relation to lesser handsets not requiring LTE. This creates an impression that consumer prefer the lower priced handsets, resulting in market share growth in that sector. Certainly there is a segment that can't afford a premium handset. First blush is that Apple should release a lower cost iPhone for these emerging, non-LTE markets. But that low price market does not buy experience enhancing softwares/apps, an area that Apple clearly dominates and makes the iPhone more attractive (aspire to). The worldwide rollout of LTE (which makes those software products more usable) is in its infancy. As that rollout progresses, the market for premium handsets grows. I'm going to stop here, because my brain is almost fried. Bottom line is that I believe WS will set more reasonable expectations, and this will reset investor confidence. Whereas I felt Apple required 2 or more consecutive quarters in which it exceeded expectation to "redeem" itself, I now think April's report, combined with the history of July's, October's and January's reports (when looked at under management's revised guidance practices) will be enough. Gregg: you are doing better when your are not ignoring people. Thanks for the optimism. I think it will take until Oct. for the market to get it. By then, most 2014 options will be well toasted. But 2015, that is another story
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Post by mbeauch on Jan 27, 2013 22:18:15 GMT -8
The deferred amount of deferred taxes is 15.6 billion. That will bring a lot of cash back if they wanted to. Honestly I would prefer Apple to just say FU Washington and move the deferred taxes back and restate earnings. Info comes from the recent 10Q
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Post by bryanyc on Jan 27, 2013 22:26:30 GMT -8
Ovi gets it? The Sponge has publically stated, because of leverage (and options) he is back to 2009 levels. That is approximately 1/3 of today's price (guess based on average price). In other words, his portfolio would be 3x higher without leverage. Then he states "The stock will eventually come back when the folks who wanted to get rich over night are gone." No offense, but Isn't that you? Well, its sounds like a good response but 2009 varied between 78 and 210 so that is quite a range. Plus, some of us are enthusiastic and that makes us susceptible to high fluctuations in our net worth. But seriously, it finally comes down to when is, FINALLY, a time to walk away. This making a comeback is getting a little tiresome (after the third or fourth time). AAPL is not finished, it has more to run (want to bet ) But it definitely it is hard on the 'lil 'ol investor. Cheers to the Longs!!!!
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Post by jeffi on Jan 27, 2013 22:28:35 GMT -8
The deferred amount of deferred taxes is 15.6 billion. That will bring a lot of cash back if they wanted to. Honestly I would prefer Apple to just say FU Washington and move the deferred taxes back and restate earnings. Info comes from the recent 10Q As much as I agree with you in spirit it would have no impact on Washington.
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Post by leonb on Jan 27, 2013 22:28:52 GMT -8
You state you are "holding a large margined position"? I presume the margin is either small or a relative pittance of your asset base. Otherwise... Good luck! Margin is 7.5%. Not sure how you'd define pittance, but the position is an important one, so your good luck wishes are most welcome. On the repatriation tax - I was aware of the tax asset from partial early recognition, though thought this was much smaller for some reason - so maybe not such an issue after all.
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Post by sponge on Jan 27, 2013 22:36:30 GMT -8
Ovi gets it? The Sponge has publically stated, because of leverage (and options) he is back to 2009 levels. That is approximately 1/3 of today's price (guess based on average price). In other words, his portfolio would be 3x higher without leverage. Then he states "The stock will eventually come back when the folks who wanted to get rich over night are gone." No offense, but Isn't that you? You bet that's me. I learned the hard way. Could have simply hanged on to my position and not gotten into options. Otherwise I would have been forced to sell just a few shares when we hit $465. I started my margin calls at 517 instead. Had I not gotten into options I would have been back to Seven figures when we went back to 705. Now I will have half of that. I am young and will recover. Owning a few million less in 20 years won't kill me. I learned but not given up on my buy and hold plan. I was lucky but many don't have any money left to invest. And if they do they are much too scared to get back in. Most just complain that TC is not rescuing the stock but fail to understand how bright the future is. Everyone including me wanted to generate more money in short term. Bad move. The next rocket will grab a new batch of option players, I have no doubt. I just will stick to my plan.
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Post by jeffi on Jan 27, 2013 22:38:02 GMT -8
You state you are "holding a large margined position"? I presume the margin is either small or a relative pittance of your asset base. Otherwise... Good luck! Margin is 7.5%. Not sure how you'd define pittance, but the position is an important one, so your good luck wishes are most welcome. On the repatriation tax - I was aware of the tax asset from partial early recognition, though thought this was much smaller for some reason - so maybe not such an issue after all. IMO... Leverage of 7.5% sounds responsible (not reckless). Competitive rates are at historic lows. You are correct that if they repatriated today the cash asset would be reduced. Of course they aren't, and will only do so when they believe it's strategically beneficial.
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Post by jeffi on Jan 27, 2013 22:44:39 GMT -8
Ovi gets it? The Sponge has publically stated, because of leverage (and options) he is back to 2009 levels. That is approximately 1/3 of today's price (guess based on average price). In other words, his portfolio would be 3x higher without leverage. Then he states "The stock will eventually come back when the folks who wanted to get rich over night are gone." No offense, but Isn't that you? You bet that's me. I learned the hard way. Could have simply hanged on to my position and not gotten into options. Otherwise I would have been forced to sell just a few shares when we hit $465. I started my margin calls at 517 instead. Had I not gotten into options I would have been back to Seven figures when we went back to 705. Now I will have half of that. I am young and will recover. Owning a few million less in 20 years won't kill me. I learned but not given up on my buy and hold plan. I was lucky but many don't have any money left to invest. And if they do they are much too scared to get back in. Most just complain that TC is not rescuing the stock but fail to understand how bright the future is. Everyone including me wanted to generate more money in short term. Bad move. The next rocket will grab a new batch of option players, I have no doubt. I just will stick to my plan. That is a very humble response and hopefully beneficial to the less seasoned. Because markets can be irrational longer than we can remain solvent... Aren't you going to lower the amount of leverage/ buying on margin? IMO... You always gave the appearance of being deeply margined.
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Post by lovemyipad on Jan 27, 2013 23:27:20 GMT -8
Was it retail that dumped 800,000 shares the last 30 minutes of trading on Friday? WAG: margin liquidations.
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Post by mace on Jan 27, 2013 23:27:29 GMT -8
... Using the new guidance practice Apple exceeded its internal expectations for both the September and December quarters. Thank you for the good news. My gut feel said Apple missed its internal expectations this recent quarter. Believe they didn't plan to launch the new iMacs so late and anticipated the low yield of iPhone 5. Also underestimate the impact on sale of the leadership struggle for the retail stores.
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Post by Deleted on Jan 27, 2013 23:40:56 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED. Since discovering, about 20 minutes before Wednesday's conference call began (and about 9 months late) that Apple has changed its guidance practices, I've been poring over conference call transcripts and my own spreadsheets (doing a lot of regression analysis on what I believe I have found). This is what I have discovered (I will be using these discoveries for all of my future earnings analysis): Firstly, if you don't believe in the value of management's guidance, don't bother reading any further, go back to your lemonade stand, and restrict your investments to mutual funds (I am not going to attempt to broaden your knowledge by answering a myriad of questions you should already know the answers to). Is that harsh? No, its this class of investor that is a major cause of AAPL's wild swings. They don't know why they buy (someone recommended it), and they don't know why they sell (they read a rumor). When you analyze Apple's performance against its guidance, arbitrarily using the period FQ2/2010 through FQ2/2012 as the "historical" method, and the period FQ3/2012 through FQ1/2013 as the "new" method, you see some surprising results. Analysis: Average Delta (of all quarters in the period FQ2/2010 through FQ2/2012) Revenue Guidance to Actual Results is 18.22%. If you focus on the quarters that Apple clearly exceeded expectations, the Delta is 22.64%. From that I derived a factor that I believe Apple used to provide guidance of 20%. Andy Zaky performed the same exercise and arrived at a factor of 15%. Andy's factor is lower than mine because he did not eliminate those quarters I believe Apple missed its internal forecasts. Eliminating missed quarters establishes a high/low range which generated my 20% factor used by management. I did the same analysis for FQ3/2012, FQ4/2012 and FQ1/2013. For this period I find Apple has tightened its guidance by reducing the Revenue factor from 20% to 5%. Apple tightened the factors used in each guidance line item all the way down The amount of reduction varied but was consistent for each quarter in the period. What does this mean: It means that expectations based on historical Guidance to Results patterns failed us terribly for FQ3/2012, FQ4/2012 and FQ1/2013. Oppenheimer addressed this disconnect directly during the most recent conference call. Example: FQ3/2012 Revenue using historical guidance practices resulted in expectations of ~$40 Billion. Apple reported results of $35 Billion. On the surface it appears that Apple missed numbers by a wide margin (14.1%). However, if you used the revised factors Apple did not miss Revenue expectations by nearly as much (1.9%). The changes in Apples guidance factors shows up even more dramatically in EPS. EPS expectations vs results, using the historical factors, produced a miss of 23.3%. Using the revised, tighter factors reduced that miss to 2.4%. Using the new guidance practice Apple exceeded its internal expectations for both the September and December quarters. I have already posted my estimates for the March quarter using the new methodology, but will be refining it shortly. Gregg, you say apple has changed its revenue guidance from a 20% sandbag to 5% - what are you basing the 5% number on for the new guidance range? The low point, high point, or mid point?
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Post by Deleted on Jan 27, 2013 23:51:25 GMT -8
The high point. If Apple believed they will generate $45.150 Billion ($43 B X 1.05), then guiding $41 -$43 Billion gives them another $2 Billion cushion, while at the same time dampening expectations on the high side.
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Post by mace on Jan 28, 2013 0:19:56 GMT -8
... I have been pushing for a buyback for what, 5 years? I do not know if Mace remembers, but years ago I was standing alone (except for Mace's support) ranting about share dilution and the long term impacts. I do think there will be an increase in the buyback. The only question is, will it be meaningful? If less than 100 billion over 2-3 years I will be upset. During that period, investors care less because eps and revenue grew very fast. So share price also shooting up. Now, the growth is approaching the law of large numbers. Buying back share to compensate for current share dilution and share creep for the past few years is a good idea. It also brings down the market cap, ironically mean can grow bigger . Hidden wish, share price can go higher ;D.
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Post by Deleted on Jan 28, 2013 0:36:42 GMT -8
I have to disagree Gregg. Apple is unique in that it has - like no other company I have seen that didn't have some of its property explode and damage an aquatic ecosystem - succumbed to a ton of FUD despite terrific profitability. The fact is the best company on earth has just dropped $250 off its share price. That is either justified fundamentally, or it is not. If you believe it isn't, then there's a messaging problem. Would it be too much to ask of Cook to say on a conference call, "the recent share price action is 180 degrees at odds with Apple's performance and outlook, and if there is a company that is better suited to dominate and profit from the mobile revolution - let alone, caused it to occur - I'd love to hear the name of that company."? "When the eagles are silent, the parrots begin to jabber." You've said here repeatedly that retail doesn't control this stock, but now you are blaming its recent fall on retail dummies? Was it retail that dumped 800,000 shares the last 30 minutes of trading on Friday? I think a lot of pro analysts and fund managers were unimpressed with that earnings call. Analysts to Apple: Bend your knee to Wall Street In case you hadn't noticed, WHAT THEY ARE DOING AIN'T WORKING. Completely agree. The iPhone 5 was simply a rehash of iPhone 4 and 4S. It was not revolutionary or even new. It was a huge disappointment. Look at it....slightly longer, that's it. A huge disappointment. It needed to be GREAT....new...fantastic.... BOLD. Something you couldn't take your eyes off of....but it wasn't. And, then, when they could have sold more of these POS, they couldn't make enough because of very poor planning, very poor management with their supply chain. I've been a Apple user since 1988 and have tons of stuff and all I could say when I say the "new" iPhone was ....urgh! Nothing new here! But...maybe...with a smoke screen, it'll make it. It's no surprise that AAPL has had this reception since its introduction. They knew. And, I think they know more too. Like the infamous Apple TV...like, maybe leaks....which have in the last two years intensified.....maybe there's nothing there. Which is what I am starting to suspect. Nothing great there either. Really...how could there possibly be? Easy to bribe a Chinese worker making $150/month to tell you everything that they are doing at their company. Easy! Hense, the 300 point drop--give or take 50. It's not the same company with Tim "Let-Them_eat_Cake" Cook at the helm. He isn't Steve and neither is Jonny. Look at the new iMac...so precious and thin that it is impossible to make. Wonderful! Just what you want for a company. I've been with this company for a long time. I have two sets of the "Think Different" posters which were amazing when they came out in the late 90s. I bought the original iPod in 2001 --the 5G , white revolutionary dream--for $400. I have ipods for running, for working out in the gym, for my car....all separate. I've had iPhone original, 3GS, 4S and, I will never buy a 5 because it is not beautiful or revolutionary. I have three Apple computers--G5, MacPro and iMac 27". But, the company is so arrogant. Tim Cook is so arrogant. How could he truly think that iPhone 5 was the real deal? It was boring. And...that is why we are having this reaction. They settled for safe. They settled for mediocre. They thought the $$$ would come no matter what they put up there. BUt, too many people see through the smokescreen. Too bad. It's not Apple's best work. Maybe they are done. There has been so much mismanagement that it is hard to really know. But, one thing is very clear, Tim let-them-eat-cake Cook is not up to it. Get rid of him. We don't need a weepy, apologizing CEO. We need one with vision. We need one who is strong....as strong as Steve Jobs. And a visionary. So far, Tim has failed miserably in my book. And, I have been a longtime crusader for Apple. But, no more cool-aid for me. I disagree - the iPhone 5 is the lightest, thinnest, and most powerful smartphone ever created. The iPhone, like all smartphones that came after it, will essentially always be a rectangle handset with a big touchscreen - there is nothing radical that can be changed with the form factor - you can only make it lighter & thinner with innovative engineering, or be un-innovative by simply increasing or decreasing the size. I have a feeling what you are looking for is a revolutionary change to iOS itself rather than the hardware - which is a different story, and you might have a good point if you were arguing that.
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Post by rob_london on Jan 28, 2013 0:39:41 GMT -8
Now that Greater China has been stripped out of the Asian Pacific segment, it is interesting to note in the 10K that the new segment "Rest of Asia Pacific" has been the worst performing geographic region recently for Apple. For the last three quarters operating income Y/Y change was -24%, -10% and -16%. I read that in India, Apple has recently lowered the price for iTunes songs to $0.29 and are also planning to open an Apple retail store in Indonesia. You have missed the last quarter (Q1) which saw resumption of growth. From the 10-Q "Rest of Asia Pacific Net sales in the Rest of Asia Pacific segment increased $376 million or 10% during the first quarter of 2013 compared to the first quarter of 2012. The growth in net sales during the first quarter of 2013 was primarily driven by increased demand for iPhone following the launch of iPhone 5 and strong demand for iPad, partially offset by decreases in net sales of Mac and iPod. The Rest of Asia Pacific segment represented 7% and 8% of the Company’s total net sales for the first quarter of 2013 and 2012, respectively." Another thing to consider is the opening of new apple retail stores in Asia/Pacific during the year - sales through these stores are NOT included in the "rest of Asia Pacific" results, they are in the separate "Retail" Segment. I was referring to year on year growth in operating income. That has declined for the last three quarters in this geographic region.
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Post by mace on Jan 28, 2013 1:24:48 GMT -8
... It's no surprise that AAPL has had this reception since its introduction. They knew. And, I think they know more too. Like the infamous Apple TV...like, maybe leaks....which have in the last two years intensified.....maybe there's nothing there. Which is what I am starting to suspect. Nothing great there either. Really...how could there possibly be? Easy to bribe a Chinese worker making $150/month to tell you everything that they are doing at their company. Easy! What make so sure that Apple TV would be made in China?
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Post by Deleted on Jan 28, 2013 2:22:08 GMT -8
You have missed the last quarter (Q1) which saw resumption of growth. From the 10-Q "Rest of Asia Pacific Net sales in the Rest of Asia Pacific segment increased $376 million or 10% during the first quarter of 2013 compared to the first quarter of 2012. The growth in net sales during the first quarter of 2013 was primarily driven by increased demand for iPhone following the launch of iPhone 5 and strong demand for iPad, partially offset by decreases in net sales of Mac and iPod. The Rest of Asia Pacific segment represented 7% and 8% of the Company’s total net sales for the first quarter of 2013 and 2012, respectively." Another thing to consider is the opening of new apple retail stores in Asia/Pacific during the year - sales through these stores are NOT included in the "rest of Asia Pacific" results, they are in the separate "Retail" Segment. I was referring to year on year growth in operating income. That has declined for the last three quarters in this geographic region. Where do you get the operating income figures broken down by region from? Are you estimating that by using net sales x company wide gross margin %? Or are they listed in the report somewhere?
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Post by rob_london on Jan 28, 2013 3:06:29 GMT -8
I was referring to year on year growth in operating income. That has declined for the last three quarters in this geographic region. Where do you get the operating income figures broken down by region from? Are you estimating that by using net sales x company wide gross margin %? Or are they listed in the report somewhere? Page 20 of the latest 10K and also operating income figures in my spreadsheet obtained from earlier 10K's.
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Post by phoebear611 on Jan 28, 2013 4:45:36 GMT -8
Was it retail that dumped 800,000 shares the last 30 minutes of trading on Friday? WAG: margin liquidations. I will double check but I'm almost certain that market liquidations are done first thing in the morning. Since thing may have changed - I will reach out to the broker community and get back with a correct response to be sure.
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Post by Rupert on Jan 28, 2013 7:10:57 GMT -8
Resistance/Support Monday 01/28/2013
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Post by adamthompson32 on Jan 28, 2013 7:42:14 GMT -8
Proof that Apple's share is stagnating? Did you listen to the call? TC himself said iPhone share was flat YoY. I'll take his word for it. Stagnating is not the right word. Apple grew its market share significantly in the US. China is a different animal. Apple does not have to gain market share for its sales to grow substantially for years. I firmly believe the "smartphone" market has been expanded. Any device running Android now is probably considered a smartphone. Apple completely destroyed Android in the US this quarter. I see no reason for Apple to not do the same in China. I actually think China by itself will pass Europe by the end of the year in revenue. For whatever reason the media is misleading the public (Shocked face) that Apple SALES are declining by way of the earnings going flat. Does not matter if you use 13 or 14 weeks, sales wise, Apple kicked ass. The only problem was poor execution from the Mac line. Just a couple of 100k Macs and EPS is over 14 and rev are over 55, happy days again. Did Apple have a bad quarter, no way. For those who do not believe in the EO's, maybe you better start. I hear you all around. First, Mac doesn't matter at all really so I won't pontificate about it. As for iPhone share, you're right that it grew in the U.S. But Apple is a global company. Global share was flat. That is a problem because share had been growing. This means Apple's share growth is trending in the wrong direction (from up to flat to....). This is problematic when the overall smartphone market begins to mature. The high end may already be nearing maturity globally. This is the problem facing iPhone. If Apple launches a lower priced iPhone they can continue to grow share. If not, I'm not sure they can. I previously thought TC's (and likely originally SJ's) idea to get people to "pay up" for iPhone (a product nearing the status of food and water in terms of people's need to have it) was rock solid for a few more years. Now I don't see it. That's the only issue I have with AAPL. And it's a really big issue.
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