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Higher dividend viewed as 'safety net' that could help turn around Apple stock - Page 2

post #41 of 87
3/19/13 at 10:30am
Quote:
Originally Posted by MJ Web View Post

Did you enjoy the $270 bath you took in the last 6 months due to missed executions on Main Street and miscommunications with Wall Street? I didn't and I've been invested un AAPL a lot longer than you.

Did you enjoy the $270 rise before the fall based on miscommunications from the same Wall Street analysts?
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post #42 of 87
3/19/13 at 10:31am
Quote:
Originally Posted by herbapou View Post

Quote:
Originally Posted by anantksundaram View Post

What is your logic for why Apple needs to "bring the income funds"? 

 

1. Apple is shiftting from growth ownership to value ownership. 

You don't even the see the circularity I referred to, do you? lol.gif

 

'Nuff said.

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post #43 of 87
3/19/13 at 10:33am
Quote:
Originally Posted by pedromartins View Post

1º the link did not work.

2º -miss expectations for the quarter-let the round of negative rumors continue-let the owner of WSJ keep spreading FUD and the stock collapses. Then, Apple has enough money to go private. 

Sorry about that. Here's another one, with the same story: http://www.reuters.com/article/2013/03/11/us-dell-icahn-idUSBRE92A0FV20130311

 

(If that does not work either, just search for "Dell Icahn").

 

Your second point still makes no sense whatsoever.

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post #44 of 87
3/19/13 at 10:34am
Quote:
Originally Posted by jragosta View Post

A stock buyback has a permanent effect of reducing the number of shares. No matter what the earnings, they are divided by a smaller number of shares.

A stock buyback has no effect unless the company cancels the shares. Apple stated its intent with the buyback was to obtain shares for employee compensation, not to cancel them. The opposite is also true: a company can always issue new shares, which dilutes the value of current shares.
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post #45 of 87
3/19/13 at 10:36am
Quote:
Originally Posted by pedromartins View Post

That only happens when they introduce new products, like the ton of products they introduced.

 

Margins will grow, like they always do. But even if growth was negative, the stock price still is too low based on any reasonable metric.

 

 

I hope that margins will improve. The problem is Apple did'nt guide an improvement in margins, Apple actually guided even lower margins in fiscal Q2.

http://www.apple.com/pr/library/2013/01/23Apple-Reports-Record-Results.html

 

Quote:

Apple is providing the following guidance for its fiscal 2013 second quarter:

• revenue between $41 billion and $43 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $3.8 billion and $3.9 billion
• other income/(expense) of $350 million
• tax rate of 26%
 

 

Lower revenue on top of lower margins = negative YoY EPS growth in Q2.

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post #46 of 87
3/19/13 at 10:37am
Quote:
Originally Posted by msuberly View Post

A stock buyback has no effect unless the company cancels the shares. Apple stated its intent with the buyback was to obtain shares for employee compensation, not to cancel them. The opposite is also true: a company can always issue new shares, which dilutes the value of current shares.

This is not true. Treasury stock cannot be counted as part of the calculation number of shares outstanding. A company cannot "own itself." If and when the shares are given to employees, that would be like a new share "issue."

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post #47 of 87
3/19/13 at 10:47am
Quote:
Originally Posted by msuberly View Post

A stock buyback has no effect unless the company cancels the shares. Apple stated its intent with the buyback was to obtain shares for employee compensation, not to cancel them. The opposite is also true: a company can always issue new shares, which dilutes the value of current shares.

Anantksundaram is correct. Treasury shares do not affect outstanding shares or P/E. So if they buy back 10% of the shares, the EPS immediately goes up by 11.1%.

They could, of course, give some shares out later and reduce the EPS, but they can do that anyway, so that doesn't count against the buyback.
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post #48 of 87
3/19/13 at 10:57am
Quote:
Originally Posted by herbapou View Post

 

Quote:

Apple is providing the following guidance for its fiscal 2013 second quarter:

• revenue between $41 billion and $43 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $3.8 billion and $3.9 billion
• other income/(expense) of $350 million
• tax rate of 26%
 

 

Lower revenue on top of lower margins = negative YoY EPS growth in Q2.

Lower revenue!? That is clueless.

 

No pun intended, but I truly wish you'd have the basic knowledge to compare apples to apples. In other words, guidance for 2nd fiscal quarter to guidance for 2nd fiscal quarter (not silly, pointless comparisons like 2nd quarter to 1st quarter, or guidance to actuals).

 

Apple's guidance in January 2012 for its 2Q12 was $32.5B in revenue (they did not provide gross margin or operating margin guidance last year, only revenue and EPS; http://www.apple.com/pr/library/2012/01/24Apple-Reports-First-Quarter-Results.html). That is a 26% - 32% increase for 2013 over last year's (2012) guidance.

 

Stop the FUD. Please.


Edited by anantksundaram - 3/19/13 at 12:33pm
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post #49 of 87
3/19/13 at 11:27am
I'm an AAPL long and while I am grateful for the quarterly cash, I'd much rather Apple sink the money into some blue-sky, long-range technology projects. Where's my flying car or personal robot? Why is home automation still so complicated and unpopular?
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post #50 of 87
3/19/13 at 1:18pm

Here is why a larger dividend will help Apple stock in the long run.  It will attract value/income investors if the return is 3.5%-4.0%.  These types of investors will not bail out on Apple after a few rumors like growth investors.  If they can sell 100-200M shares to value investors at 450-475 that will provide a stable base so the stock does not fluctuate so much.
 

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post #51 of 87
3/19/13 at 2:40pm
Quote:
Originally Posted by sog35 View Post

Here is why a larger dividend will help Apple stock in the long run.  It will attract value/income investors if the return is 3.5%-4.0%.  These types of investors will not bail out on Apple after a few rumors like growth investors.  If they can sell 100-200M shares to value investors at 450-475 that will provide a stable base so the stock does not fluctuate so much.

 

Your evidence?

Oh, and btw, perhaps you'd like to explain why the stock has dropped 40% since they started offering dividends. How is that "attract value/income investors" working out for you?

A smart investor knows that the dividend doesn't change the value of the company. Well, technically, it reduces the value of the company because it has less cash after paying a dividend. Plus, you have to pay taxes on the dividends you receive.

A share buyback makes far more sense - Apple should never have caved in to the people whining for a dividend. At least they stood up to the ones demanding preferred shares.
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post #52 of 87
3/19/13 at 2:49pm
Quote:
Originally Posted by sog35 View Post

Here is why a larger dividend will help Apple stock in the long run.  It will attract value/income investors if the return is 3.5%-4.0%.  These types of investors will not bail out on Apple after a few rumors like growth investors.  If they can sell 100-200M shares to value investors at 450-475 that will provide a stable base so the stock does not fluctuate so much.

This has to be a decision made by Apple though so what does Apple gain by doing this? Is Apple in need of more people telling them how to run the company? After everything that's happened, wouldn't they have a stronger incentive to get rid of as many outside investors as possible?

They don't need cash, they don't need more armchair management, they don't need to maintain the constant barrage of criticism so it seems like staying the course and buying back shares would be their best plan of action (edit: as noted above). If outside investors and staff are genuinely long term, it won't matter because it will right itself in due time.

It might slowly put an end to the purposefully negative reports but they seem to be running out of FUD anyway.
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post #53 of 87
3/19/13 at 5:35pm
Quote:
Originally Posted by igriv View Post

Shareholders? Because they own the company. Suppose you hired a maid, and she redecorated your house the way SHE liked it. Do you think that would be acceptable?

I think some people might assume you mean the maid is the shareholder. I gather you are suggesting Tim is the maid looking after the house that shareholders have paid for. The trouble with that analogy is that the house owner has to make a sacrifice too and take responsibility for the upkeep of the home. Financial investment is a very euphemistic term for what is effectively a button press to transfer a money sequence with the intention of other people raising its value. In that respect it's closer to gambling because there's a disconnect between the value generation and the investment and the term 'investing in' can be replaced with 'betting on'.

The other major factor in that is the proportion of ownership. People who own 0.0001% of the company often use analogies that equate to 100% ownership and express opinions under the assumption of the latter. Tim Cook himself is one of the largest individual shareholders in Apple so by all rights his decisions should outweigh those of minority stockholders.
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post #54 of 87
3/19/13 at 5:46pm
Quote:
Originally Posted by Marvin View Post

I think some people might assume you mean the maid is the shareholder. I gather you are suggesting Tim is the maid looking after the house that shareholders have paid for. The trouble with that analogy is that the house owner has to make a sacrifice too and take responsibility for the upkeep of the home. Financial investment is a very euphemistic term for what is effectively a button press to transfer a money sequence with the intention of other people raising its value. In that respect it's closer to gambling because there's a disconnect between the value generation and the investment and the term 'investing in' can be replaced with 'betting on'.

The other major factor in that is the proportion of ownership. People who own 0.0001% of the company often use analogies that equate to 100% ownership and express opinions under the assumption of the latter. Tim Cook himself is one of the largest individual shareholders in Apple so by all rights his decisions should outweigh those of minority stockholders.

It goes beyond what you are stating.

If one wants to use this analogy (as bad as it is), one would have to say that the homeowner told the maid that she has full authority to redecorate the house any way she wishes and that they will remove her if they don't like it.

Shareholders do NOT have decision making authority for a company. They give that authority to the board of directors - which delegates much of it to the management team. The shareholder's sole rights are to remove the BOD if they don't like them or to vote on some very specific proxies that management chooses to present to them (or as are required by the bylaws).

In another thread, someone cited a Supreme Court case that said that the BOD is obligated to do what is best for the company, not individual shareholders. While the goals are shared 99% of the time, the board does not have to follow shareholder wishes in the cases where the goals diverge (again, unless required by the bylaws and or decided by a proxy vote).
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post #55 of 87
3/19/13 at 7:08pm
Quote:
Originally Posted by anantksundaram View Post

Lower revenue!? That is clueless.

No pun intended, but I truly wish you'd have the basic knowledge to compare apples to apples. In other words, guidance for 2nd fiscal quarter to guidance for 2nd fiscal quarter (not silly, pointless comparisons like 2nd quarter to 1st quarter, or guidance to actuals).

Apple's guidance in January 2012 for its 2Q12 was $32.5B in revenue (they did not provide gross margin or operating margin guidance last year, only revenue and EPS; http://www.apple.com/pr/library/2012/01/24Apple-Reports-First-Quarter-Results.html). That is a 26% - 32% increase for 2013 over last year's (2012) guidance.

Stop the FUD. Please.

Would made sense if Apple didnt said they are doing guidance diffently now. No more lowballing it. We will see how they do in Q2, but according to them they will be in that range.
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post #56 of 87
3/19/13 at 7:33pm
Quote:
Originally Posted by herbapou View Post


Would made sense if Apple didnt said they are doing guidance diffently now. No more lowballing it. We will see how they do in Q2, but according to them they will be in that range.

Why don't you look up -- idiotic as it may be, but even accepting your silly argument -- look up the actual 2Q12, compare it against the "no-more-lowballing" range for 2Q13 and come back to let us know if that is a projected revenue increase?

The pity with guys like you is you are relentless, and don't really don't care much that you continue to wallow in your ignorance.
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post #57 of 87
3/19/13 at 7:53pm
Quote:
Originally Posted by igriv View Post

After I wrote the above, I looked at http://investing.money.msn.com/investments/institutional-ownership?symbol=aapl

You will see that institutions (almost all mutual funds and pension funds) have been dumped 25 MILLION shares of AAPL recently (I assume this is over Q4 2012).

Which is why I've been suggesting that they need to do a stock split to encourage individual ownership.
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post #58 of 87
3/19/13 at 10:53pm
Brian white sounds like he became an expert in corporate strategy While not all his ideas are bad, some just don't make sense.
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post #59 of 87
3/20/13 at 5:39am
Quote:
Originally Posted by igriv View Post

How would this encourage individual ownership? Your broker will be happy to sell you one share of apple for the $7.95 commission (the broker's cost is $0.001), and if someone can't afford to buy one share, then they probably are not a viable long-term investor -- they will need to sell their holding once rent time comes around.

This has been explained repeatedly.

First, if you have $1,000 to invest, a lot of people shy away from buying 2 shares of anything for $500 each. They're more likely to buy 20 shares at $50.

Second, a lot of people invest in small increments. They may have a plan set up to invest $400 per month. At $500 per share, they can't buy even one share per month - and have to start skipping months. At $50 per share, they can easily fit it into their plan.

While there's no real difference, the psychological difference is huge.
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post #60 of 87
3/20/13 at 7:52am

In the last six months, Apple has lost more value than the total market cap of 490 of the 500 companies in the S&P index.  Yet, management has said very little to reassure investors and has done nothing to bolster the stock price.  I realize that Tim Cook seems to be following the super secret operating method established by Steve Jobs.  But that gets old when the stock is falling like a rock for no good reason.  Call me silly, but I become concerned when the value of my portfolio bleeds away on a daily basis for six months and management says nothing.  Sure, I can sit on my stock because I do believe in Apple products; but that won't work for the options I hold that have an expiration date.  I just feel that the management could do a lot more to reassure people that the company is on solid footing and will continue to increase in value.  

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post #61 of 87
3/20/13 at 7:56am
Originally Posted by insider7 View Post
I just feel that the management could do a lot more to reassure people that the company is on solid footing and will continue to increase in value.  

 

They sell more product every single quarter and make almost 100 billion a year. Revenue.

 

What else could they POSSIBLY need to do?

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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post #62 of 87
3/20/13 at 9:12am
Quote:
Originally Posted by insider7 View Post

In the last six months, Apple has lost more value than the total market cap of 490 of the 500 companies in the S&P index.  Yet, management has said very little to reassure investors and has done nothing to bolster the stock price. .  

Apple has increased by 70 since cook took over. Remember when Apple dropped by 40 points in 2008 in two weeks? Why no fuss then?
Quote:
Originally Posted by Tallest Skil View Post

They sell more product every single quarter and make almost 100 billion a year. Revenue.

What else could they POSSIBLY need to do?

Free Appletinis!
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post #63 of 87
3/20/13 at 10:38am
Originally Posted by igriv View Post
insider7 nailed it: they need to assure the investing public that they have a plan going forward. Their keeping the GNP of Belgium in a sock is not very reassuring.

 

… They have a plan. This has been evident for a decade. That some choose not to see it is their problem and their fault.

 

I was speaking nothing of their cash holdings.

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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post #64 of 87
3/20/13 at 10:42am

One thing that immediately comes to mind is that Tim and the rest of the team could buy for stock for their own accounts.  Also, they could give some indication of the kinds of things they are working on.  They could do a much better job on PR in general.   


Edited by insider7 - 3/20/13 at 10:50am
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post #65 of 87
3/20/13 at 11:00am
Originally Posted by insider7 View Post
Also, they could give some indication of the kinds of things they are working on.

 

So you've never followed Apple, then?

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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post #66 of 87
3/20/13 at 11:17am
Originally Posted by igriv View Post
The fact that they are wasting shareholders' money by doing the exact same thing they've been doing for the past fifteen years is a VERY bad sign.

 

This is you.


Originally Posted by igriv View Post
What have they actually said?

 

Nothing. That's the point. 

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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post #67 of 87
3/20/13 at 12:04pm
Quote:
Originally Posted by igriv View Post

Earlier in the decade that had a different CEO, who is no longer with us. There is no question that Tim Cook is a very good supply chain guy, and his execution of Steve Jobs' strategy is very good. What is not clear is what their vision is going forward. The fact that they are wasting shareholders' money by keeping it in a sock without a word of explanation is a VERY bad sign. If you don't think so, please feel free to add to your Apple holdings (I have actually increased mine lately, but am living to regret it so far).

That's ridiculous.

Jobs, more than anyone, kept his mouth shut about future products. If anything, they're talking more now than they used to.
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post #68 of 87
3/20/13 at 12:49pm
Quote:
Originally Posted by igriv View Post

Apple has increased by (almost) seventy WHEN Cook took over, since the uncertainty about Jobs' role went away together with Jobs himself. Just before their blockbuster Q1 2012 results (remember, their Q1 is calendar Q4 of the previous year, so Steve was alive for half of it) their stock was trading at $420, so not much below today's price. Two months later Cook sold basically ALL of his stock at $550. The rest of us should have paid attention, I guess.
It's at 450 now. 30 points is nothing to sneeze at.
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post #69 of 87
3/20/13 at 1:12pm
Originally Posted by igriv View Post
The bold face text is yours, not mine.

 

I see you've completely missed the point of what I was saying. That's fine.

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
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post #70 of 87
3/20/13 at 3:54pm

Ah the perils of being an Apple investor... information-wise we live in the dark most of the time and in times like these when the stock is in the tank we just have to trust that Apple will continue to innovate and execute in amazing ways. The problem is that since Steve Jobs has been gone, we have not really seen that. It's harder to trust. 

 

Tim Cook has talked about how the product pipeline is "chock full" for 2013, but he also said that 2012 was an incredible year of innovation for the company. Apple has definitely slipped in my opinion, but I am still hopeful they will regain their footing - both as an investor and as a fan. With that said, I wouldn't be betting the farm on them. Things change too fast in the mobile space. 

 

As far as dividends and buybacks... revenue growth takes care of lots of problems. People will not be having these conversations if sales start back in the right direction again! 

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post #71 of 87
3/20/13 at 4:14pm
Quote:
Originally Posted by golfman View Post

Ah the perils of being an Apple investor... information-wise we live in the dark most of the time and in times like these when the stock is in the tank we just have to trust that Apple will continue to innovate and execute in amazing ways. The problem is that since Steve Jobs has been gone, we have not really seen that. It's harder to trust. 

Tim Cook has talked about how the product pipeline is "chock full" for 2013, but he also said that 2012 was an incredible year of innovation for the company. Apple has definitely slipped in my opinion...

How?

Jobs has been gone 20 months.
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post #72 of 87
3/20/13 at 4:35pm
Quote:
Originally Posted by igriv View Post

Your response is completely orthogonal to my post you were responding to.

Not in the least. You said that Apple was screwing up in recent days by not disclosing what they're working on.

Since that was standard behavior under Jobs - and appears to be loosening up, your statement was just plain wrong.
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post #73 of 87
3/20/13 at 4:38pm
Quote:
Originally Posted by Tallest Skil View Post

So you've never followed Apple, then?
Yes, I follow Apple, but I'm not sure what you are asking. What I'm saying is I can't understand why Apple has to be so secretive about what they are doing. There were many portable players before the iPod, there were cell phones before the iPhone, there were tablet computers before the iPad. And there are TVs before the iTV and computer wrist devices before the iWatch. What Apple does is make things better than anyone else. So unless they have some brand new product that no one ever imagined, I don't see why they can't let us know what's in the pipeline and what the target date is.
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post #74 of 87
3/20/13 at 4:56pm
Quote:
Originally Posted by insider7 View Post

Yes, I follow Apple, but I'm not sure what you are asking. What I'm saying is I can't understand why Apple has to be so secretive about what they are doing. There were many portable players before the iPod, there were cell phones before the iPhone, there were tablet computers before the iPad. And there are TVs before the iTV and computer wrist devices before the iWatch. What Apple does is make things better than anyone else. So unless they have some brand new product that no one ever imagined, I don't see why they can't let us know what's in the pipeline and what the target date is.

Easy, competitive advantage. Also they still need to sell what they make now. They rarely announce a product unless it'll be shipping within weeks.
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post #75 of 87
3/20/13 at 8:16pm
Quote:
Originally Posted by jungmark View Post

Easy, competitive advantage. Also they still need to sell what they make now. They rarely announce a product unless it'll be shipping within weeks.
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post #76 of 87
3/20/13 at 8:23pm
I guess my bottom line is that Apple's management should do and say SOMETHING more to reassure investors when the company is losing so much market value. It seems to me that they see their stockholders with very little regard. They have a lot of very smart people working at Apple. Some of them should be involved with PR.
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post #77 of 87
3/20/13 at 8:35pm
Originally Posted by insider7 View Post
What I'm saying is I can't understand why Apple has to be so secretive about what they are doing.

 

http://en.wikipedia.org/wiki/Osborne_effect


There were many portable players before the iPod, there were cell phones before the iPhone, there were tablet computers before the iPad.

 

That's meaningless. They all sucked. Know why they all sucked? Because Apple didn't give them a head start. NOTHING like what Apple releases existed before they released it, and that's partially because Apple didn't give anyone a heads up that they were about to release them.


Telling people about a product before release lets competitors make said product and steal sales.


What Apple does is make things better than anyone else. So unless they have some brand new product that no one ever imagined…

 

Like a music player with a wheel, a smartphone without a keyboard, and a tablet without a desktop OS, you mean? 

 
Originally Posted by insider7 View Post
I guess my bottom line is that Apple's management should do and say SOMETHING more to reassure investors when the company is losing so much market value. It seems to me that they see their stockholders with very little regard.

 

"We have more actual cash than most countries. We make higher profits YoY every year. We sell more product YoY every year. Keep whining and we'll go private." lol.gif

 

You're right that they don't care much about their shareholders. It's because they don't need them as anything but customers (and even then, not at all).

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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post #78 of 87
3/20/13 at 8:41pm
Quote:
Originally Posted by insider7 View Post

I guess my bottom line is that Apple's management should do and say SOMETHING more to reassure investors when the company is losing so much market value. It seems to me that they see their stockholders with very little regard. They have a lot of very smart people working at Apple. Some of them should be involved with PR.

Imagine if Apple announced the iPad 6-9 months in advance. Google wouldn't have been scrambling to release Android 3.0. And maybe they would have a competent tablet OS for cheap tablets and steal Apple's thunder. Or the critics would have had 6-9 months to crap on the iPad, driving customer interest down and setting the iPad as a failure.
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post #79 of 87
3/20/13 at 9:06pm
Quote:
Originally Posted by igriv View Post

Let me paraphrase your first paragraph:

"There is no lord but Apple, and Steve Jobs is its prophet"

As for your last paragraph, you have just explained why people are busy dumping their stock. Nice work.

Not sure how you read that. Apple reinvented those markets. You can't deny that. MP3 players were difficult to use prior. Tablets sucked prior. Smartphones too.
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post #80 of 87
3/20/13 at 9:33pm
Originally Posted by igriv View Post
Let me paraphrase your first paragraph: "There is no lord but Apple, and Steve Jobs is its prophet"

 

As for your last paragraph, you have just explained why people are busy dumping their stock. Nice work.

 

Well, you're just full of nonsense today, aren't you?

PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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PhilBoogie
That's Google alright. For a stupid company they sure do dumb things.
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