Originally Posted by Mikeb85
Unless there's evidence of collusion between brokerages or some sort of insider trading, it's not illegal. As per the current rules, you can use your own trades to drive the price of a stock up or down as much as you want, although I wouldn't call it a great strategy (it can easily backfire).
That was my point. In this case, it looks like a valid trading strategy for them to make more money (because they'd pay out less on the bonds and more than make up for the loss on the stock).
Your first statement is wrong, though. You don't have to prove collusion or insider trading for something to be illegal. One can be charge (and convicted) for posting fales information about a company to drive the stock up or down - even if there's no collusion.
Originally Posted by JollyPaul "Apple's earnings for the winter quarter of 2012... involved an extra, 14th week."I watched a Bloomberg video where the talking head got it backwards. He said the current quarter had an extra week which made Apple's current quarter earnings worse than reported. I guess it is probably extreme incompetence, but combined with the WSJ's mysterious and now retracted 65 million iPhone expectation for the next quarter in their supply chain rumor article it sure looks like deliberate misinformation.
I cam across another interesting article today. It highlights the press' efforts to minimize Apple's accomplishments and maximize its weaknesses. The headline reads:
"Apple is Among the Companies in the Computer Hardware Industry With the Highest Free Cash Flow Per Share"
From that, you'd conclude that they're not #1 - and that there are other companies that are comparable. When you read clear to the bottom of the article, you learn:
Apple isn't just "among the companies with the highest fcf", but they're miles ahead of the competition.
Now, Free Cash Flow is not a very useful metric (share price as a multiple of free cash flow is a much better one), but the article is choosing to talk about FCF, so they should discuss it in an unbiased manner.
BTW, a great article to read
Reasons to buy Apple now
32 minutes ago - Dow Jones News
By Brett Arends
If you Google my name, you will see blog posts which accuse me of being part of an elaborate worldwide conspiracy to undermine Apple (AAPL) .
Like most things you read on blogs, the accusations, of course, are completely true. It was me, Jim Cramer and Henry Kissinger. We met in the Texas School Book Depository in Dallas to cook the whole thing up. The Bilderberg Group, the Davos World Forum and SPECTRE put up the money.
We'd have gotten away with it, too, if it weren't for those pesky bloggers -- and their dog, Scooby. Drat!
Yet today, I find myself in the unusual position of defending Apple stock from the sudden deluge of sellers.
If you haven't been living in a cave for the past week, you'll know Apple's stock price recently collapsed to $445, from a peak of $700 last year. Wall Street suddenly discovered that Apple faces competition from companies such as Samsung. And Apple didn't give a confident outlook for the year ahead.
But this is still a fantastically successful company, and the stock is dirt cheap by almost any measure.
No wonder the smart folks at Boston-based money manager GMO had Apple in the top 15 holdings in the portfolio of top-quality U.S. stocks. GMO has a long and excellent reputation of going against Wall Street fashion and buying value stocks. That Apple met its criteria, even at the higher prices seen a few weeks ago, is no guarantee of success, but it is reassuring.
Let's start with the basic numbers. Apple's latest quarterly earnings show the company has $169 billion in cash and liquid assets, and just $69 billion in total liabilities. So the company is basically sitting on $100 billion in cash or equivalents -- about $105 per share. (It has another $24 billion in commitments to buy components and pay leases on retail stores. Including those would change the numbers a bit, but not much.)
In short, Apple isn't really a $445 stock. Net of cash, it's a $330 stock.
That's just seven times forecast earnings of $45 per share for the current fiscal year, which runs through Sept. 30. That's half the rating of the rest of the stock market, which has historically traded at about 14 times forecast per-share earnings.
At current prices, Apple, net of cash, is less than six times forecast cashflow per share.
And that isn't just because margins are currently elevated. Apple, net of cash, is valued at less than twice forecast revenues. Apart from a brief period during the depths of the financial crisis, this is the lowest such rating seen since 2004.
Apple is simply gushing cash each month. The company's operating cashflow was $23 billion -- or $24 per share -- last quarter alone.
Tim Cook, the company CEO, doesn't seem to have the panache (or ability at spin) of his legendary predecessor, the late Steve Jobs. But none of that really matters. What matters is how well the business performs.
Last quarter, net sales were up 18%. Sales in China were up 67%. Revenues from selling iPhones rose 28%, those from selling iPads, 22%.
Apple shouldn't be viewed as a simple technology company. It should mainly be viewed as a luxury goods company -- the LVMH or Tiffany of tech. People pay extra to own an Apple product. Sometimes they pay a lot more. The company's gross margins were 39% last quarter.
It is certainly true that the company faces surging competition for its iPhones, iPads, computers and so on. If Apple stock were expensive, I wouldn't buy it in these circumstances, because that competition will inevitably pressure margins. But it isn't expensive; it's cheap.
Everyone I know who owns an iPhone loves it. Apple customers are fanatics. I know people who have dumped their smartphones from competing platforms and moved to Apple, but I know very few who have gone the other way. What seems to distinguish Apple is their execution. The products seem to be more reliable, and better, than the competition. This is why customers stick around.
For work purposes, I recently bought a tablet on a competing platform. It's been trouble. The software's buggy. I had to wipe the hard drive and reboot twice. The store won't take it back because it's outside the return period. The manufacturer will take it back, but I'll have to ship it off for six weeks. I wasted hours online with their overseas help desk.
There were sound reasons why, in the circumstances, an iPad wouldn't have suited my needs, but I did reflect that if I had purchased one, I'd have found it very easy to get my problem fixed, by going into my local Apple store.
This is a quality company with an amazing brand name, and the stock is cheap. Make of it what you will.
-Brett Arends; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 28, 2013 11:10 ET (16:10 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.