JDSoCal
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Post by JDSoCal on Apr 28, 2022 13:59:19 GMT -8
Ugh, so while no covid shutdown effects on last Q, they will affect this Q by $4-$8B. That's why we are down in AH. Tim said all factories are open full steam right now, if I heard that correctly. So maybe a surprise beat in June...
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ono
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Post by ono on Apr 28, 2022 14:07:19 GMT -8
Open but ramping. If all goes well, then maybe only $4B or less.
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ono
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Post by ono on Apr 28, 2022 14:22:18 GMT -8
Love this:
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ono
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Post by ono on Apr 28, 2022 14:28:41 GMT -8
A solid "tell" that board sees shares as undervalued. Apple’s board of directors has declared a cash dividend of $0.23 per share of the Company’s common stock, an increase of 5 percent. The dividend is payable on May 12, 2022 to shareholders of record as of the close of business on May 9, 2022. The board of directors has also authorized an increase of $90 billion to the existing share repurchase program.
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JDSoCal
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Post by JDSoCal on Apr 28, 2022 14:49:46 GMT -8
A solid "tell" that board sees shares as undervalued. Apple’s board of directors has declared a cash dividend of $0.23 per share of the Company’s common stock, an increase of 5 percent. The dividend is payable on May 12, 2022 to shareholders of record as of the close of business on May 9, 2022. The board of directors has also authorized an increase of $90 billion to the existing share repurchase program. Did you hear the bozo analyst on the call ask Tim, "dur hur, why you give money to pesky shareholders and not buy something?" I was just waiting for him to say Netflix. Analysts are the worst. Have never run a hot dog stand, but know how to run Apple. What I'd like one of these simpletons to ask Tim, maybe catch him off guard, "Any plans to do cloud computing with those neato low power Apple Silicon chips?" I think if you could catch Tim in a laugh, that'd be a no. But if he gave the boilerplate, "We don't discuss future products...blah blah blah" then than might be a yes. Obviously not going to launch tomorrow with all the supply chain issues. But MSFT just had 50% growth in cloud! Amazon in the 40's. Why cede that to bozos? Yeah low margins, but maybe Apple could do elegant front end stuff, plus the lower power makes them worth a premium. Just an idea. We need a new insanely great product or service someday... BTW, Apple announced 825M paid subscriptions. Would $100B+ be worth it to buy a mediocre brand for how many net users? Of Netflix's 200M, how many are already Apple subs? And how many don't have an iPad or a Mac TV? No thanks, we'll reach a billion paid subs in 1-2 years without throwing away 12 figures of shareholder wealth. I'd rather they buy Apple stock than NTFX stock with it.
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ono
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Post by ono on Apr 28, 2022 15:01:28 GMT -8
Yeah. Pretty sure the others in the room smiled when polite Tim said something like "I'm not going to go through my list with you over the phone".
And 1B subscribers in less than 2 years!!
They made their decision on data centers as an offering a long while back. I don't see it.
Could their next tech breakthrough be battery tech? They've got efficient processors. Add remote satellite comm (texting) to their Apple-designed iPhone modems along with requisite improved battery tech, and there is an iPhone 15 I would buy for every family member.
GSAT at ~ $2B. For $1B?
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4aapl
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Post by 4aapl on Apr 28, 2022 16:17:48 GMT -8
There's a lot fewer institutional analysts on that spreadsheet (full one on the link) than normal. Are there more that aren't making their quarterly predictions known? Judged solely by that sheet, Apple could come in at 1.60-1.63. Some independents would talk up how exact their guess was. Some would lose it all due to "price is right" rules. And the institutionals, who we've learned to generally dislike while at the same time they actually have a job and direct or indirect clients to worry about, come in 10-15% "low", right where they want to be, giving Apple a "beat". They talk it up, the market talks it up, the stock goes up some (but not too much, it's not FB here), and all are happy. Different people, different goals. Wishful thinking by the independents and the investors, whereas the "pros" have a margin of error built in. But yea, I want Apple to kick butt, though mainly because I don't have a bunch of cash sitting in my pocket to buy even more. Still, if trying to put probabilities on things, the bullish side looks pretty good in this economy and employment cycle. And that's not even considering all the new product updates Apple has pushed out that have been a bit more aggressive than normal, thus pushing the upgrade cycle to shorten a little. We just got a new SE for my daughter, replacing the 8 she had been using that had some microphone and lightning plug issues. It's good to keep on moving forward. So only 3 of 14 "independent analysts" were at or under the actual EPS. Sometimes investors get a little too hopeful. All 8 institutional analysts "under guessed", by 4 cents or more. But my opinion is they aim to have a margin of safety. I'm not saying I could do any better, and I was really thinking of 2-3 cent increase on the dividend instead of just a penny. But it looks like Apple is choosing to focus their "money back to the shareholder" on buybacks this time, which makes sense if you think the stock is too low now, or have much odds on it going lower in the future 12 months. I'd rather the stock was ready to hit it's ATHs again and even 190-200, especially since I'd like to trim off just a little bit of risk. But solid earnings with a little conservative guidance on some topics isn't a bad thing, when looking out months or years instead of days or weeks. Thanks Apple
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JDSoCal
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Post by JDSoCal on Apr 28, 2022 16:49:46 GMT -8
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4aapl
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Post by 4aapl on Apr 28, 2022 17:25:02 GMT -8
Hmmmm $250 sounds nice, but that would be 56% from the current $160 level. Or almost 40% from the ~180 high. Love to have it. But what's the probability on that, and what would it take to get there? I all depends. Fisher liked to show that the market often made fools of the masses, so times where people thought the market would be down a lot or up a little might be when it would instead go up a lot. Maybe it will happen. If it does, for the market along with AAPL, I think that would put us well into a frothy or even bubbly top. $200 seems pretty possible, maybe 50-70% odds. $210 for a bit of a stretch, 40%. $220 for those that prefer to push the limits, maybe a 20% chance within 12 months. $250? 5-10% chance? I'd love to see it, and am not likely to bet against it (even though I did write 250 Sept '22 calls for about 20% of our holdings...they are paying off very nicely). But I'm going to have to see the whole Munster video (sniper didn't have it), as $250 within 12 months just doesn't seem very likely in this environment. Maybe it's like Katy, where her base case is X ($205?), but she gives a 10% chance of a bull case ($250?), but a 20% chance of a bear case ($110?)
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Post by hledgard on Apr 28, 2022 17:54:24 GMT -8
Just don't buy 250 or even 210 in a year. Apple is so big now, it is much harder to move the needle.
It would have to be something completely new, e.g Apple car or a failure by some other competitor.
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Post by archibaldtuttle on Apr 28, 2022 18:10:14 GMT -8
In my opinion the prospect for AAPL at 200 is all about the broader market, the forecast for rate hikes, and the apetite for “risk” assets as a whole. AAPL is still a tech stock, so as long as tech is in the doghouse AAPL stock will suffer.
When that changes, and tech investing is in style again (maybe when the end of rate hiking is in sight), the AAPL will soar.
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mark
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Post by mark on Apr 28, 2022 19:19:44 GMT -8
There's a lot fewer institutional analysts on that spreadsheet (full one on the link) than normal. Are there more that aren't making their quarterly predictions known? Judged solely by that sheet, Apple could come in at 1.60-1.63. Some independents would talk up how exact their guess was. Some would lose it all due to "price is right" rules. And the institutionals, who we've learned to generally dislike while at the same time they actually have a job and direct or indirect clients to worry about, come in 10-15% "low", right where they want to be, giving Apple a "beat". They talk it up, the market talks it up, the stock goes up some (but not too much, it's not FB here), and all are happy. Different people, different goals. Wishful thinking by the independents and the investors, whereas the "pros" have a margin of error built in. But yea, I want Apple to kick butt, though mainly because I don't have a bunch of cash sitting in my pocket to buy even more. Still, if trying to put probabilities on things, the bullish side looks pretty good in this economy and employment cycle. And that's not even considering all the new product updates Apple has pushed out that have been a bit more aggressive than normal, thus pushing the upgrade cycle to shorten a little. We just got a new SE for my daughter, replacing the 8 she had been using that had some microphone and lightning plug issues. It's good to keep on moving forward. So only 3 of 14 "independent analysts" were at or under the actual EPS. Sometimes investors get a little too hopeful. But isn't that always the case? After all, if you're not hopeful, you may not want to invest! I thought 2 cents increase was the likely number, as I mentioned a few days ago. Now I suspect that Apple is hedging. Just as we do, they see the slightly increased level of turmoil around the world, and just like we see, they see a higher probability of some sort of wipeout in the markets. If there is a wipeout, it'll likely be a brief one, but it may give all of us, including Apple, some time to buy shares on the cheap. Now this probability is only a little higher right now, so it is nowhere near certainty, and not yet at the point of "likely", but it is increasing. I think the energy status (macro, not micro), the inflation status, and the growth status will be the main factors affecting that probability. And, as always, there's the black swan possibility, which by definition can't be predicted. So perhaps Apple wants to keep that penny or two (~$1B) in reserve in case their shares get stupid cheap over the next 18 months. But it doesn't really make much sense in the context of having $90B set aside for buybacks. So I don't know why they increased the dividend by such a small amount. [ EDIT: I just thought of another possibility. Maybe Apple doesn't want to be perceived as a "widows and orphans" stock to be held like a utility for the dividend.]
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4aapl
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Post by 4aapl on Apr 28, 2022 19:24:22 GMT -8
In my opinion the prospect for AAPL at 200 is all about the broader market, the forecast for rate hikes, and the apetite for “risk” assets as a whole. AAPL is still a tech stock, so as long as tech is in the doghouse AAPL stock will suffer. When that changes, and tech investing is in style again (maybe when the end of rate hiking is in sight), the AAPL will soar. Apple is that weird middle ground. It's not the stereotypical tech stock, a much more fickle beast that might not even make money most of the time. Instead it is really much closer to the likes of Microsoft, at least as far as longevity and steadiness. There's others out there like IBM, Cisco, and Oracle. Apple is a little like them, but with more growth. But it does come down to how people choose to value Apple. Even if a huge economic downturn was coming, Apple should do ok. And then there is the dividend. And the buybacks. How do you value that? There really is no easy compare, and so it just depends on how people and funds choose to value Apple when deciding what to do with their funds, compared to other options out there. If one or a couple things ease off in the next 1-6 months, $200 seem decently probable. Overall, maybe that is a 50% chance, or 60-70% if one or more wall of worry items simmer down.
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mark
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Post by mark on Apr 28, 2022 19:39:12 GMT -8
Just don't buy 250 or even 210 in a year. Apple is so big now, it is much harder to move the needle. It would have to be something completely new, e.g Apple car or a failure by some other competitor.Interesting thought experiment ... which competitor's removal would affect Apple significantly? I can't think of too many of them offhand. 1. I suppose if Samsung disappeared, Apple could sell more iPhones, but perhaps other Android makers would crank out some more instead. The market for iPhone versus Android seems bifurcated - many buy Android solely because of lower price, and some buy because they are in the google ecosystem. 2. If Intel disappeared, PC makers would be in deep trouble. While they redesign around a different chip (AMD, etc), Apple would sell many more Macs. Of course, it seems as if Apple is already selling all the Macs they can make! 3. Google? I suppose if they disappeared off the face of the earth, their ecosystem would be gone. That might force quite a few people into the Apple ecosystem instead. Could we quantify any of these? Like could we say "if Samsung disappeared, iPhone sales woud go up by XXM, with an additional $YB in revenue?" The Apple Car thing reminds me that someone on CNBC (?) said today that an Apple Car could provide more revenue than ALL Apple products today. I have to wonder if that is really true. Assume revenue of $400B or so, if the average price of an Apple car is $100,000, could they really sell 4 million cars at $100k average each? I doubt it. Even if 20% of the revenue comes from recurring services related to the car, I just don't think there is that much market for high-end right now. I could be wrong though, I've searched and I can't find stats regarding how many $100k+ cars are sold each year.
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4aapl
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Post by 4aapl on Apr 28, 2022 20:11:53 GMT -8
16,403,316 diluted shares outstanding. If my math is correct that ~500k shares retired in 12 months, or roughly $80M Looks like you are off by an order of 1000. The consolidated financial statement says most things are in millions, but that shares are in thousands: www.apple.com/newsroom/pdfs/FY22_Q2_Consolidated_Financial_Statements.pdfLooking at the first page, it looks like the number of diluted shares went down by about 526.xxx.xxx, so 526M. At today's $160 that would be $84B. Ono's spreadsheet is showing around $75B.
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4aapl
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Post by 4aapl on Apr 28, 2022 20:26:28 GMT -8
The Apple Car thing reminds me that someone on CNBC (?) said today that an Apple Car could provide more revenue than ALL Apple products today. I have to wonder if that is really true. Assume revenue of $400B or so, if the average price of an Apple car is $100,000, could they really sell 4 million cars at $100k average each? I doubt it. Even if 20% of the revenue comes from recurring services related to the car, I just don't think there is that much market for high-end right now. I could be wrong though, I've searched and I can't find stats regarding how many $100k+ cars are sold each year. It all depends on how many years out you are looking, and how many assumptions you make. FWIW, Google says Tesla shipped just under a million cars last year, and Ford shipped 781k F150's. Ford has 200k reservations for the F150 Lightning. So the trick seems like it would have to be to ship multiple models, likely at multiple price points. Apple generally makes great things (well thought out and highly usable), and it's easy to think they can do great at making anything. At the same time, they and their customers have set the bar very high, which makes getting into anything, even a new product, a lot tougher. It seems like it would be quite a while before Apple hit $400B a year in revenue from a vehicles division. That doesn't make it impossible, and certain areas might be ripe for attack. But I'm not going to hold out too much hope for instant gratification, and I'd be worried if Apple as a whole suddenly changed its priorities on a dime. Keep pumping out great products, especially those that already have a great following, while also keeping an eye on future possibilities. Which I think is what they are doing.
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mark
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Post by mark on Apr 29, 2022 5:43:24 GMT -8
The Apple Car thing reminds me that someone on CNBC (?) said today that an Apple Car could provide more revenue than ALL Apple products today. I have to wonder if that is really true. Assume revenue of $400B or so, if the average price of an Apple car is $100,000, could they really sell 4 million cars at $100k average each? I doubt it. Even if 20% of the revenue comes from recurring services related to the car, I just don't think there is that much market for high-end right now. I could be wrong though, I've searched and I can't find stats regarding how many $100k+ cars are sold each year. It all depends on how many years out you are looking, and how many assumptions you make. Well, comparing nominal numbers today to nominal numbers at some point in the future is useless. We could just as easily say that sometime in the future Apple will sell as much in meals at their company cafeterias as they sell ALL their products today. It just depends on which assumptions you make - how many years, and how much inflation during those years. 🤣 This is my exact point. Tesla sold about a million cars, the VAST majority of them less than $100k, and closer to $50k. Same for Ford, the vast majority ("all") of their F150 sales were lower than $100k, and the majority were under $50k. re "multiple price points" ... this is why I said "average" price. If they sell one car at $50k and a second at $150k, they need to sell equal amounts of each to reach an average of $100k ... so they could reach $400B annual sales from cars ... if they sell 4 million of them. My comment isn't related to quality or usability. I am quite sure that if Apple ever sells a car, it will be of good quality, and generally customer pleasing. My comment is solely about average price and size of market at that average price level. If you recall, "they" said the iPhone won't sell because of its very high price. And sales were slow-ish at first. But when people realized the utility, sales took off almost regardless of price. BUT that only works for products at a price level within stretch distance (i.e. you can stretch your budget and manage to acquire one, either with subsidies from a carrier, or payment plans, etc). BUT an average price $100k car isn't within the stretch distance, most people can't finance a $100k car, and nobody will subsidize it to the level necessary (because there is no economic model that can work, the carriers that subsidized iPhones made their money with higher monthly service fees and lock-ins for 2+ years until they earned back their initial subsidy). I will agree that it is entirely possible that someday in the future, if mobile devices/computers become devices like toaster ovens, with tiny margins, easily mass produced by anyone as a knockoff, REALLY cheap serviceable models available, etc, that $400B phone/computer will be sold and $400B vehicles would be sold in a given year. Inflation (either via price or improvements) for autos and deflation for mobile devices would easily accomplish that.
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4aapl
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Post by 4aapl on Apr 29, 2022 6:11:51 GMT -8
Yep, it sounds like we are thinking the same thing. Basically it's not likely in the short term, and to get there might take 2M a year, with multiple vehicles in the 50-100k range. One side thing that could make it happen quicker IMO is if there was an accessory car, something that is an add on for a family, or hits a different market. Taxis, rentals, delivery, etc. Something where you are sidestepping the normal slower turnover of vehicles. I'm not suggesting Apple go into those markets, as they mostly wouldn't be a good fit for Apple's normal core strengths. But if the goal was to ship a lot quickly, it would probably take a non-consumer level push, or at least not a normal automotive one.
(As a side note, there are some F150's now that stretch up to 100k. Mine, a mid-level model, has an MSRP of around 60k. Along with fancy-ifying them, a big price bump has been in making the cab bigger, now basically a SUV plus a pickup bed. There are still some new 3 seaters being sold, but it's pretty rare. At least here, with ones less than 10 years old. If the average price is below 50k (drop out 4x4 and max tow, and average out with more basic work trucks), it probably isn't much below.)
We'll see what Apple does. In most cases they stay close to their core strengths. Remember all of the speculation on an actual TV made by Apple.
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JDSoCal
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Post by JDSoCal on Apr 29, 2022 8:37:54 GMT -8
Correct, EV's are selling so poorly that most automakers would rather pay Tesla millions than make them. This is a classic example of how our elites try to ram their beliefs and priorities on the majority of Americans. There is Tesla - a hugely overpriced company - and there is everyone else. The market just isn't there. Maybe a good reason we won't see an Apple car for awhile - unless Apple thinks it can get the same sort of brand cache that Tesla currently enjoys. But it would have to have some insanely great features to differentiate it... BTW, all those poo-pooing $200, that is most analysts' target: Wamsi Mohan, BofA Securities: Buy. $215. Katy Huberty, Morgan StanleyTo $195 from $120. Matin Yang, Oppenheimer: $190. Abhinav Davuluri, Morningstar: $130 Kyle McNealy, Jefferies: $200. Daniel Ives, Wedbush: $200. Harsh Kumar, Piper Sandler: Target to $195 from $200. Amit Daryanani, Evercore: $210. Kyle McNealy, Jefferies: $200. Sidney Ho, Deutsche Bank: Buy. Target to $200 from $210. Sami Badri, Credit Suisse. Neutral. Target to $169 from $168.
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4aapl
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Post by 4aapl on Apr 29, 2022 15:03:22 GMT -8
Correct, EV's are selling so poorly that most automakers would rather pay Tesla millions than make them. This is a classic example of how our elites try to ram their beliefs and priorities on the majority of Americans. There is Tesla - a hugely overpriced company - and there is everyone else. The market just isn't there. Maybe a good reason we won't see an Apple car for awhile - unless Apple thinks it can get the same sort of brand cache that Tesla currently enjoys. But it would have to have some insanely great features to differentiate it... Right place, right time. That's the tough part. Tesla has managed what Apple did with the iPod, coming out with a product that was better than the other ones out there, in one way or another, and selling the premium product. And then selling a lot of them, while coming out with a few models to get most of the market. Or the profit....again, like Apple. From a "this is what the market really needs" perspective, theirs space for a small high efficiency vehicle, and it can even have a small range if the price makes it worth it. Most people drive less than 100 miles a day, and a vast number of cars in commutes only have one person. The problem is that it's a tough sale. It's the "what if I want to" dialog. What if I want to pick my kid, and her friend, up at school. Or go out to lunch with friends? What if I get in an accident, taking a little nudge from one of those giant vehicles, or even a head-on on a highway with net collision speeds of 120 mph. What if I want to go on a road trip, and not have to stop every X miles. Does a hotel even have a charging station? What about a campsite? If paying big money, people want it all. I'm not a good representation of the average buyer, driving my old 4runner for 16 years before upgrading, but even normal people don't upgrade too often, and when they do they are normally buying a replacement vehicle, not adding to the fleet. It's a tough market. On one hand, you know that there are plenty of people out there that will buy whatever is offered, if Apple comes to the table with something. On the other, sometimes the unknowns about a new vehicle manufacturer are tough. I'd be interested to look into the details on the Rivian, and the customers that are picking them. I've read 3500 have sold, and we just saw our first on Saturday. It was pulled over, but then caught up with us at the freeway and got onto 80. I'm not so sold on Apple making a car, but I have faith that if they decide to get into the market, that they have thought about it a lot and think it is worthwhile.
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