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Post by appledoc on Feb 7, 2014 2:00:55 GMT -8
Up big PM.
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Post by macwire on Feb 7, 2014 3:26:33 GMT -8
Proceeding carefully as we navigate the gap captain.
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Post by phoebear611 on Feb 7, 2014 4:02:11 GMT -8
JPM this morning - a few excerpts: We have a mixed view on the buyback bonanza. In our view, Apple sits on an enviable cash pile, and some of that cash needs to be returned to shareholders over time, which the company already has committed to. We are concerned, however, that Apple’s accelerated stock buyback activity could be in response to some investors focusing too much on capital allocation. We would prefer to see Apple assert a more balanced use of cash, across M&A, stock buybacks, and dividends.
Despite our mixed view on the buyback bonanza and the recent earnings disappointment, we think Apple still has 2014 catalysts that could restore meaningful, above-peer revenue growth to the model. he China Mobile launch stands to set the stage for a larger-sized iPhone rollout later this year, which could boost unit sales. Another silver lining is that we think Apple’s crossover to 64–bit processors, ahead of the competition, could usher in new features, potentially jumpstarting growth in the next 12-18 months.
Despite our mixed view on the buyback bonanza and the recent earnings disappointment, we think Apple still has 2014 catalysts that could restore meaningful, above-peer revenue growth to the model. The China Mobile launch stands to set the stage for a larger-sized iPhone rollout later this year, which could boost unit sales. Another silver lining is that we think Apple’s crossover to 64–bit processors, ahead of the competition, could usher in new features, potentially jumpstarting growth in the next 12-18 months.
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benoir
fire starter
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Posts: 1,318
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Post by benoir on Feb 7, 2014 4:39:50 GMT -8
one wonders whether it was premature to abandon this ship….. (the crew of the AFB that is...)
perhaps a little positive sentiment inducing news will entice some of those lost souls back on board
it is interesting to see the barometric mood swings here over time and it will be interesting to see if today marks the beginning of a paradigm shift in AAPL sentiment
lets hope there is an emphatic wheeeeeee by the end of the day…..
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Post by phoebear611 on Feb 7, 2014 4:58:48 GMT -8
Let's keep all in perspective - you just know that Icahn may send out a tweet giving himself accolades for "applying pressure" on TC to react more aggressively. Is he right? I dunno -- but one would question why he wasn't more aggressive at lower levels as well. And if he was, he didn't feel the "pressure" to convey his purchases publicly. On the other hand maybe TC was aggressive during certain dips in the past but didn't feel he needed to communicate it on a timely basis. I'll give him a pass. Sometimes there are growing pains as a CEO. He needs to find the right balance but I'm encouraged to see his comments from last night. The only ONE thing that I still found bothersome was that he was surprised to see the stock dip the way it did after earnings. He should be aware that for some reason the Street tends to punish AAPL much more harshly than any other stock. Don't know why he thought that the guidance he and Oppy gave would not affect the stock the way it did. He needs to learn the game and then beat the street at their own BS games. Oh - one last thing - I love his comments about the new categories (yes, remains to be seen) and demonstrating that AAPL is STILL a growth stock. (Ok...let's see what ya got, Timmy) Anyway, thanks Tim, for stepping up to the plate...hopefully by the close there will be joy in Mudville again this weekend.
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Post by artman1033 on Feb 7, 2014 5:15:29 GMT -8
By DAISUKE WAKABAYASHI CONNECT Updated Feb. 6, 2014 10:49 p.m. ET CUPERTINO, Calif.— Apple Inc. AAPL +1.62% has bought $14 billion of its own shares in the two weeks since reporting financial results that disappointed Wall Street, Chief Executive Tim Cook said in an interview.
Mr. Cook said Apple was "surprised" by the 8% decline in its shares on Jan. 28, the day after it reported lower iPhone sales than projected and warned that revenue in the current quarter might decline from the same period a year ago. Mr. Cook said he wanted to be "aggressive" and "opportunistic."
With the latest purchases, Mr. Cook said Apple had bought back more than $40 billion of its shares over the past 12 months, which Mr. Cook said was a record for any company over a similar span.
"It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do," said Mr. Cook, speaking in a conference room at the company's corporate headquarters here. "We're not just saying that. We're showing that with our actions."
Those purchases are part of Apple's previously disclosed plan to repurchase $60 billion of its own shares, Mr. Cook said. He said Apple bought $12 billion of the shares through an "accelerated" repurchase program, and $2 billion on the open market. He said Apple plans to disclose "updates" to its buyback program in March or April.
The revelation about the recent share purchases comes a few weeks before Apple's Feb. 28 shareholder meeting, where activist investor Carl Icahn is pressuring the company to be more aggressive with its $160 billion cash pile.
Mr. Icahn, who owns roughly $4 billion in Apple shares, is asking shareholders to vote on his proposal that Apple buy an additional $50 billion of its own shares by the end of September, above its current plan.
Responding to Mr. Cook's statement about his confidence in Apple, Mr. Icahn said, "So am I."
Apple's Mr. Cook said he wants to "be able to adjust for the long-term interest of the shareholders, not for the short-term shareholder, not for the day trader.
"We may see a huge company tomorrow that we want to acquire or something may happen in the stock market that's unpredictable," he continued.
Historically, Apple hasn't made big acquisitions; the company has never spent more than $1 billion on a single deal. Mr. Cook said Apple has bought 21 companies over the past 15 months.
That track record is a contrast to Google Inc., GOOG +0.63% which has been snapping up companies across the technology landscape, most notably its $3.2 billion acquisition of Nest, a maker of connected home devices founded by former Apple employees.
The Apple CEO said its history of opting for smaller deals doesn't mean that the company won't pull the trigger on a big acquisition if it makes sense.
"We've looked at big companies," said Mr. Cook. "We have no problem spending 10 figures for the right company."
Apple is fighting the perception that its best days are behind it. Revenue growth has dropped to less than 10% in the last three quarters, while net income fell 11% in the past fiscal year—its first annual decline in more than a decade.
An often-cited factor is that the company hasn't broken into a new product category—as it did with the iPod and iPhone—since introducing the iPad in 2010.
Thursday, Mr. Cook reiterated that Apple plans to enter a new category this year. Apple watchers are speculating about wearable devices or a new television platform.
"There will be new categories. We're not ready to talk about it, but we're working on some really great stuff," Mr. Cook said. When asked whether a new product category could mean an improvement on an existing product like an iPad Air, a lighter version of its tablet computer, or new services such as mobile payments, Mr. Cook declined to comment.
He said that anyone "reasonable" would consider what Apple is working on as new categories.
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Post by artman1033 on Feb 7, 2014 5:30:09 GMT -8
Yesterday the following trade caught our eye: AAPL delta one trade Feb 4th, from Bloomberg To break it down, the trader bought 9800 March 580 puts for 75.90, sold 9800 March 580 calls at 1.12, and bought 980,000 shares for $508.12 So what happened here? The buyer created what appears to be a riskless transaction as the long stock is covered by long in-the-money puts and short out-of-the-money calls, matching up the deltas. A long put position and a short call position of the same strike and maturity is essentially a short forward contract on that stock (read here for more on Forward Contracts). What could be the rationale for this offsetting transaction of long stock/short forward? It could be a bank locking in funding for the long stock position at a cheaper rate than the bank charged a client for funding a similar position. And the client? That might just be AAPL itself. The point here is that this activity likely suggests that a large bank has entered into “Accelerated Share Repurchase” program with AAPL whereby the bank(s) have committed to delivering a specified amount of shares to the company in a certain amount of time at a sort of average price during the period. So why is the options activity the tell that AAPL is conducting an ASR? Well, if you were a large bank out there buying AAPL’s stock, you have very little risk and you are getting paid handsomely to do this business, but there are also potential little tricks that can make the activity more profitable for the bank. So what does it mean for AAPL? They are likely buying a chunk of stock right here, which is better than the average price over the last quarter from October to December 31st. But maybe, just maybe AAPL is front running Carl Icahn’s request for increased capital return. In the quarter ended June 1 2013, AAPL purchased a total of $16 billion worth of shares, $12 billion of which was in the form of an ASR (read here). In the quarter just completed the company only bought $5 billion worth, and maybe they are keeping their powder dry to buy on pullbacks, like the one we just got! www.riskreversal.com/2014/02/05/morningword-2514-bobbing-for-aapl/
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Post by artman1033 on Feb 7, 2014 5:38:27 GMT -8
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Since84
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To infinity and beyond!
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Post by Since84 on Feb 7, 2014 6:08:38 GMT -8
Well has Tim Cook drawn a line in the sand and established a floor?
Interesting to watch the talking heads this morning conclude this is evidence of Apple's inability to innovate...
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Post by terps530 on Feb 7, 2014 6:11:18 GMT -8
very interesting artman thanks for posting that
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Post by po1nt on Feb 7, 2014 6:23:43 GMT -8
Very interesting to say the least. Either CM is a big success and Tim knows it so hes "buying the dip" or CM is soft and hes buying shares to help support the soft March quarter... Either way he did it before the divy and saved themselves a bunch of divy payments.
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Post by greyfox15 on Feb 7, 2014 6:27:15 GMT -8
very interesting artman thanks for posting that As charged him in a PM: Should change his name from ArtMan to InfoMan.
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Post by ericinaustin on Feb 7, 2014 6:42:03 GMT -8
Very interesting to say the least. Either CM is a big success and Tim knows it so hes "buying the dip" or CM is soft and hes buying shares to help support the soft March quarter... Either way he did it before the divy and saved themselves a bunch of divy payments. Or it could be exactly what he said it was. He was surprised by the big drop after the conf. call and saw a very cheap stock.
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Post by incorrigible on Feb 7, 2014 6:50:13 GMT -8
Sold half the $500 April calls I bought after the post earnings "crash". Will ride the other half.
Up over 25% on the position.
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Post by artman1033 on Feb 7, 2014 7:16:30 GMT -8
In terms of new product categories, specifically, if you look at the skills that Apple has from hardware, software, and services, and an incredible app ecosystem, these set of things is very, very unique, I think no one has a set of skills like this, and we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. www.macworld.com/article/2095780/cook-to-wsj-there-will-be-new-categories.html
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Post by artman1033 on Feb 7, 2014 7:20:16 GMT -8
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Post by macwire on Feb 7, 2014 7:33:46 GMT -8
What a whacky morning of trading.
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Post by rob_london on Feb 7, 2014 9:32:54 GMT -8
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Post by Zeke on Feb 7, 2014 12:33:08 GMT -8
one wonders whether it was premature to abandon this ship….. (the crew of the AFB that is...) perhaps a little positive sentiment inducing news will entice some of those lost souls back on board it is interesting to see the barometric mood swings here over time and it will be interesting to see if today marks the beginning of a paradigm shift in AAPL sentiment lets hope there is an emphatic wheeeeeee by the end of the day….. I went all cash right after earnings because I was afraid that $500 wouldn't hold as a floor price. Then Wednesday I went all AAPL at $500.50 when it became apparent that it would hold. I am a happy camper today. I just wish I had not gotten distracted Monday before earnings, when I was leaning toward going all cash, but didn't.
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JDSoCal
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Aspiring oligarch
Posts: 4,186
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Post by JDSoCal on Feb 7, 2014 12:59:45 GMT -8
Well, congrats, Tim, you killed pain - and my put spreads that were a hedge against your falling stock. Ironically, this attempt to lift the stock - released on a Thursday after close??? and thus killing pain range - will give the call buyers reinforcement that happy days are here again, and they will build more call walls! Not to be a buzzkill or anything. Now, let's hear more about these new product categories.
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Mav
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Post by Mav on Feb 7, 2014 13:12:39 GMT -8
Depending on the market's level of "disrespect", Apple could buy back 100M shares (net) before year-end. Apple has the technology - er, I mean maybe $18B left, with which it could easily buy 25M more shares even if you add in share-based compensation expense. Depends on when Apple buys.
Tim's probably got a decent boost in the program in March or April - so now I'm thinking 150-200M shares isn't out of the question longer-term...
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Post by mace on Feb 7, 2014 13:19:39 GMT -8
one wonders whether it was premature to abandon this ship….. (the crew of the AFB that is...). Is a good thing. Feel like the old AFB, quiet till 2003 when increasingly more folks realize iPod has kicked off a new era. The market is waiting for that "iPod" before we see a rally lasting 2-3 years. When it starts, plenty of time to jump in. Meanwhile, dabbles (day/swing trade and no position trading, holding common shares and hibernates is ok too) or look elsewhere e.g. many surprised leap such as LQMT, AKAM, etc.
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JDSoCal
Member
Aspiring oligarch
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Post by JDSoCal on Feb 7, 2014 13:51:44 GMT -8
Uncle Carl at it again: And Guy Adumbi being moronic again: I'm sure nobody here needs me to point out why Adami is a total fool. But my gawd man, National Socialism had tremendous visibility, what with all those red flags and all, not necessarily a good thing. ********** And BTW, here's a report on Maynerd Um's response to the recent buybacks: So what's the point of spending billions on buybacks to raise EPS if WS analysts are just going to raise their estimates the next day?
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Post by lovemyipad on Feb 7, 2014 14:18:20 GMT -8
one wonders whether it was premature to abandon this ship….. (the crew of the AFB that is...) perhaps a little positive sentiment inducing news will entice some of those lost souls back on board it is interesting to see the barometric mood swings here over time and it will be interesting to see if today marks the beginning of a paradigm shift in AAPL sentiment lets hope there is an emphatic wheeeeeee by the end of the day….. I'm saving my wheeee for 530+. Don't want to jinx anything!
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Deleted
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Post by Deleted on Feb 7, 2014 14:23:54 GMT -8
The point of the buyback is to increase EPS...if Analysts raise their estimates, that's fine with me. I'd much rather Analysts be raising estimates than lowering.
Think of it, with fewer shares, you own more of the business. Isn't that a good thing? Just theoretically, if Apple was able to buy back 50% of the company at $500, instead of FY Earnings of in the $40 - $45 range, EPS would be in the $80 - $90 range. If that was announced tomorrow, the price of AAPL would skyrocket.
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mark
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Post by mark on Feb 7, 2014 14:29:43 GMT -8
Very interesting to say the least. Either CM is a big success and Tim knows it so hes "buying the dip" or CM is soft and hes buying shares to help support the soft March quarter... Either way he did it before the divy and saved themselves a bunch of divy payments. This is actually a good point. Seems as if they saved more than $70M in div payments just this quarter alone from the big buyback just disclosed! That's a savings of more than $280M for the year. Wow.
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mark
fire starter
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Post by mark on Feb 7, 2014 14:33:46 GMT -8
Uncle Carl at it again: And Guy Adumbi being moronic again: I'm sure nobody here needs me to point out why Adami is a total fool. But my gawd man, National Socialism had tremendous visibility, what with all those red flags and all, not necessarily a good thing. ********** And BTW, here's a report on Maynerd Um's response to the recent buybacks: So what's the point of spending billions on buybacks to raise EPS if WS analysts are just going to raise their estimates the next day? Um ... is Icahn expecting $65.52 in earnings? Cuz 19 * 65.52 is what the number he mentioned is.
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Deleted
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Post by Deleted on Feb 7, 2014 14:52:59 GMT -8
I believe Icahn is estimating EPS of $65 with a $100B+ buyback he wanted.
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