Channel-check analysts warning of Peak iPhone are priming Apple shares for monster buybacks

245

Comments

  • Reply 21 of 81
    foggyhillfoggyhill Posts: 4,767member
    Those were the same "analysts" who were off by 10M in Q1 2015... Yep. Lets trust them now... (sic)
  • Reply 22 of 81
    foggyhillfoggyhill Posts: 4,767member
    mvigod said:
    I think the best course is to simply sell the stock and buy something else that isn't a broken or hated ticker like Apple.  No matter what apple does their stock isn't going to get the respect shareholders want it too.  Just look at the returns the last couple years to see that.  So you can stick with Apple and 'hope" that the market all of a sudden thinks it is worth much more or simply reinvest the proceeds into other more "loved" stocks and stories with more upside.  Plenty of choices there.  

    I sold all my Apple stock some time ago and redeployed into Google, S&P 500 index and some biotechs which have all done well.  Had I stuck with apple I would be a very frustrated shareholder.  I just knew from how the street and media treated the stock constantly it wasn't going to ever escape this sentiment.  So apple will continue to trade at very low "cheap" multiples.  At such time when iphone YOY sales drop or margins fall (or both) the stock will have a big leg down as investors think the story is over in terms of apple's profit growth.  So goes iphone so goes apple is the mantra.

    Remember, Apple has to sell an unprecedented number of phones at least for the next 5 to 7 years to justify today's 7B market cap.  That is no easy hurdle.  If you think somewhere on that timeline there is a risk that maybe, just maybe, the unit sales or margins fall then there is going to be more pain and stagnation in the Apple ticker.

    Hoping that Apple stock will be loved by Wall Street and not be manipulated is just not a realistic investment strategy anymore.  I watched it for too long and got out because I knew things were going to flatline, underperform and eventually underperform even the index.  In the end the index is your bogey.  If your stock can't outperform that then there is no reason to own it.

    Huh!! WTF. And what justification does Google need for its POS valuation. You make no sense.

    You bought Google despite it making NO SENSE if you look at its bottom line. Don't even try.

    Even if Apple's Profit growth merely followed inflation, it would still be plenty to justify its current valuation.
    radarthekatDan Andersen
  • Reply 23 of 81
    cornchipcornchip Posts: 1,252member
    eriamjh said:
    Could you diagram what you find wrong with the above sentence and identify the incorrectness of it?  Unless I fail english, I see nothing seemingly incongruent.
    It's like two incomplete sentences separated by a comma. 
    edited December 2015
  • Reply 24 of 81
    think of the end game for a peak iPhone scenario. massive profits continue but growth stagnates. apple continues to buy back shares. p/e ratio goes down. each stock becomes worth a greater ownership stake in the company. ultimately the apple can go private in this way.
    radarthekat
  • Reply 25 of 81
    foggyhillfoggyhill Posts: 4,767member
    foggyhill said:
    mvigod said:
    I think the best course is to simply sell the stock and buy something else that isn't a broken or hated ticker like Apple.  No matter what apple does their stock isn't going to get the respect shareholders want it too.  Just look at the returns the last couple years to see that.  So you can stick with Apple and 'hope" that the market all of a sudden thinks it is worth much more or simply reinvest the proceeds into other more "loved" stocks and stories with more upside.  Plenty of choices there.  

    I sold all my Apple stock some time ago and redeployed into Google, S&P 500 index and some biotechs which have all done well.  Had I stuck with apple I would be a very frustrated shareholder.  I just knew from how the street and media treated the stock constantly it wasn't going to ever escape this sentiment.  So apple will continue to trade at very low "cheap" multiples.  At such time when iphone YOY sales drop or margins fall (or both) the stock will have a big leg down as investors think the story is over in terms of apple's profit growth.  So goes iphone so goes apple is the mantra.

    Remember, Apple has to sell an unprecedented number of phones at least for the next 5 to 7 years to justify today's 7B market cap.  That is no easy hurdle.  If you think somewhere on that timeline there is a risk that maybe, just maybe, the unit sales or margins fall then there is going to be more pain and stagnation in the Apple ticker.

    Hoping that Apple stock will be loved by Wall Street and not be manipulated is just not a realistic investment strategy anymore.  I watched it for too long and got out because I knew things were going to flatline, underperform and eventually underperform even the index.  In the end the index is your bogey.  If your stock can't outperform that then there is no reason to own it.

    Huh!! WTF. And what justification does Google need for its POS valuation. You make no sense.

    You bought Google despite it making NO SENSE if you look at its bottom line. Don't even try.

    Even if Apple's Profit growth merely followed inflation, it would still be plenty to justify its current valuation.
    BTW, Apple just crapped out a potential 10B in annual revenue a year with the Apple Watch, there has been a constant rise in service revenues and well, there is always the Apple TV which has switched from Hobby to full product... Not to mention Ipad pros selling really well.

    All that together, could easily compensate for a slightly slower growth in Iphones.
  • Reply 26 of 81
    Apple's one-two punch against the competition is the Apple iPhone Upgrade program, and the fact that future iPhones will have features or abilities the analysts don't know about yet.
    Dan Andersen
  • Reply 27 of 81
    Are these bankers ignoring the iPhone Upgrade Program? It might only be a couple years before billions of people are getting a new iPhone every September.
    caliDan Andersen
  • Reply 28 of 81
    sog35 said:
    Apple needs to take its stock out of the public market. How?
    1. BOD approval and shareholder approval to take the stock off of the public market
    2. Establish a private market place to buy/sell shares. 
    3. Institute rules that limit manipulation. Such as stock must be held for at least 90 days. These type of limitations are common place with Mutual funds.
    4. Continue to act as a Quasi-public company by reporting quarterly financials to the SEC
    Notice that there is no mention of a buyout of the shareholders. The reason is there is no buyout. Shareholders are simply agreeing to take the shares off of the public market.

    If you take the stock out of the market, most of the mutual funds and institutional holders will need to liquidate.  They will be asking for a premium to buy them out.  By their own by-laws, they are not allow to invest in these non public companies.

    Cannot establish a private market place.  Other security companies can establish private markets to exchange, but what will happen is it gets listed on pink sheet.  Apple cannot interact with small investors.  Only accredited investors are allowed, so this means that people have to have over 500k investable income to qualify or what the law deems as accredited investors.

    They cannot institute rules that limit manipulation, but probably can do other things that may result in similar behavior changes.  

    Majority of shareholders of apple are held by institutions who cannot hold a non public company in their funds.  So a buyout is necessary.

    If you take a stock private, most of the folks here will not be able to partake in the company's good times.
    Your retirement account will not be able to participate.  Unless you are trading pink sheet, you will not be able to buy/sell.  
    Anytime there is liquidity in this stock, then there will be market makers and it will be categorized as public traded and all the so call "bad actors" will be back in business.  

    There is no solution for Apple.  Only Congress can solve this problem.

  • Reply 29 of 81
    Apple's one-two punch against the competition is the Apple iPhone Upgrade program, and the fact that future iPhones will have features or abilities the analysts don't know about yet.

    Ben Bajarin tweeted that his data suggests YOY increase in iPhone sales for China but flat or down elsewhere. If that's the case I'm a little surprised since on the last earnings call Cook said the % of install base that had upgraded to the latest phones is still quite low. The question then is why aren't people upgrading. Unless he has bad data, but he's a pretty pro-Apple analyst so I don't think he'd tweet that if he didn't think it was accurate.
  • Reply 30 of 81

    5150iii said:
    I'm not looking for Apple to start being an open book but what about reaffirming fullyear guidance or something like that to push back at these reports.
    Why care?

    Are investors hurt by these short term gyrations?
  • Reply 31 of 81
    calicali Posts: 3,495member
    5150iii said:
    Thanks for the insight. If you are going to go forward with shareholder action you really can't sign off for your year ban now!! Any of us who are longs absolutely agree with you on some level no matter what we may or may not say. 
    I, for one, think the Sog self-ban should be set aside.  These little bets we make with one another are silly and having a meaningful, albeit sometimes controversial, participant forced to leave the board does not serve the community.  I have no reason to support Sog specifically on this issue, and I don't entirely agree with his campaign to see Apple remove itself from the public markets (seems like its borne of an expression of valid frustration rather than a valid idea, otherwise it would be appropriate for all companies to do so and then we'd have no public markets).  But I vote we collectively agree to drop the notion of posters here banning themselves from the entire community based upon disagreements-turned-bets between individuals.  I didn't bet Sog, so why should he be banned from my interaction with him.  Let's leave these playground games for the kids.
    The sad thing is Sog was right, Wall Street was wrong.
  • Reply 32 of 81
    5150iii said:
    I'm not looking for Apple to start being an open book but what about reaffirming fullyear guidance or something like that to push back at these reports.
    Didn't work when Tim Cook responded to that email from Jim Cramer back in November. Apple suffers from Tim Cook not being great at articulating vision. Until Apple is viewed as more than iPhone, Inc. the stock will go nowhere.

    nonsense. their vision is clear -- make amazing goods people want to buy. even if you took away iPhone their other lines of business are each bigger than other entire companies. major companies at that.
  • Reply 33 of 81
    proapple said:
    sog35 said:
    Apple needs to take its stock out of the public market. How?
    1. BOD approval and shareholder approval to take the stock off of the public market
    2. Establish a private market place to buy/sell shares. 
    3. Institute rules that limit manipulation. Such as stock must be held for at least 90 days. These type of limitations are common place with Mutual funds.
    4. Continue to act as a Quasi-public company by reporting quarterly financials to the SEC
    Notice that there is no mention of a buyout of the shareholders. The reason is there is no buyout. Shareholders are simply agreeing to take the shares off of the public market.

    If you take the stock out of the market, most of the mutual funds and institutional holders will need to liquidate.  They will be asking for a premium to buy them out.  By their own by-laws, they are not allow to invest in these non public companies.

    Cannot establish a private market place.  Other security companies can establish private markets to exchange, but what will happen is it gets listed on pink sheet.  Apple cannot interact with small investors.  Only accredited investors are allowed, so this means that people have to have over 500k investable income to qualify or what the law deems as accredited investors.

    They cannot institute rules that limit manipulation, but probably can do other things that may result in similar behavior changes.  

    Majority of shareholders of apple are held by institutions who cannot hold a non public company in their funds.  So a buyout is necessary.

    If you take a stock private, most of the folks here will not be able to partake in the company's good times.
    Your retirement account will not be able to participate.  Unless you are trading pink sheet, you will not be able to buy/sell.  
    Anytime there is liquidity in this stock, then there will be market makers and it will be categorized as public traded and all the so call "bad actors" will be back in business.  

    There is no solution for Apple.  Only Congress can solve this problem.

    It's not going to get him.
    On top of that, APPL has domestic cash of only $19B vs domestic Debt of $67B dollars.
    All other cash that APPL have  ($187B out of $206B) is stored outside US and can't be brought back without hefty penalty.
    So, no APPL doesn't have cash to buy back their own stock at 50-100% premium to convince MFs to sell their holding.

    Top it with 60% Institutional ownership, which means 60% of 630B$ = ~$380B is owned by institutional investors.

    I don't know why even I wasted time to reply but couldn't resist how dumb a person could be.

    edited December 2015
  • Reply 34 of 81
    sog35 said:
    mvigod said:
    I think the best course is to simply sell the stock and buy something else that isn't a broken or hated ticker like Apple.  No matter what apple does their stock isn't going to get the respect shareholders want it too.  Just look at the returns the last couple years to see that.  So you can stick with Apple and 'hope" that the market all of a sudden thinks it is worth much more or simply reinvest the proceeds into other more "loved" stocks and stories with more upside.  Plenty of choices there.  

    I sold all my Apple stock some time ago and redeployed into Google, S&P 500 index and some biotechs which have all done well.  Had I stuck with apple I would be a very frustrated shareholder.  I just knew from how the street and media treated the stock constantly it wasn't going to ever escape this sentiment.  So apple will continue to trade at very low "cheap" multiples.  At such time when iphone YOY sales drop or margins fall (or both) the stock will have a big leg down as investors think the story is over in terms of apple's profit growth.  So goes iphone so goes apple is the mantra.

    Remember, Apple has to sell an unprecedented number of phones at least for the next 5 to 7 years to justify today's 7B market cap.  That is no easy hurdle.  If you think somewhere on that timeline there is a risk that maybe, just maybe, the unit sales or margins fall then there is going to be more pain and stagnation in the Apple ticker.

    Hoping that Apple stock will be loved by Wall Street and not be manipulated is just not a realistic investment strategy anymore.  I watched it for too long and got out because I knew things were going to flatline, underperform and eventually underperform even the index.  In the end the index is your bogey.  If your stock can't outperform that then there is no reason to own it.

    You sound like a Wall Street lackey.

    So you say Apple needs to keep revenue flat for the next 7 years just to justify today's $600 billion market cap (you said $7 billion which is wrong)?

    Apple has $250 billion in cash right now.
    They make $60 billion in free cash flows each year.
    So in 7 years with FLAT GROWTH they will have $670 billion in cash.

    So you are saying Apple needs to have $670 billion in CASH to justify their $600 billion market cap?
    Do you even hear what you are saying?

    On the other hand Google has a PE of 33.  To justify their PE they need to GROW revenue 20% for the next 7 years.  Really?  They already own 85% of the internet ad dollars and you want then to grown revenue 20% each year and 250% compounded the next 7 years?  Give a break.  You are a trader and not an investor.  
    Wrong on all counts as far as your AAPL numbers go.

    AAPL has only $19 usable domestic Cash out of total cash of $206B and not $250B
    On top of that AAPL has domestic debt of $64B, so Actual local Cash that AAPL has is 206-64= $142B and as said $187B is locked outside US and can't be brought back
    Check yourself: http://forums.appleinsider.com/discussion/189795/apple-inc-snatches-up-14-billion-of-its-own-shares-in-massive-q4-buyback-surge/p1

    Now, if you take 2015 results, While AAPL made $53B  Net Profit in latest year, AAPL spent $12B for dividend  and $30B for Stock Buyback, so they only kept only $11B in their kitty for year ending 2015.

    Institutional investors hold $380B of AAPL Stock, which will demand hefty premium even to think about selling their holding, and AAPL has net debt of $45B locally (If they can't bring outside cash because of hefty penalty) and by what basis you are again suggesting for AAPL to go private?


  • Reply 35 of 81
    5150iii said:
    I'm not looking for Apple to start being an open book but what about reaffirming fullyear guidance or something like that to push back at these reports.
    Didn't work when Tim Cook responded to that email from Jim Cramer back in November. Apple suffers from Tim Cook not being great at articulating vision. Until Apple is viewed as more than iPhone, Inc. the stock will go nowhere.

    nonsense. their vision is clear -- make amazing goods people want to buy. even if you took away iPhone their other lines of business are each bigger than other entire companies. major companies at that.
    What company doesn't have that vision? What about that is unique to Apple?
  • Reply 35 of 81
    5150iii said:
    I'm not looking for Apple to start being an open book but what about reaffirming fullyear guidance or something like that to push back at these reports.
    Didn't work when Tim Cook responded to that email from Jim Cramer back in November. Apple suffers from Tim Cook not being great at articulating vision. Until Apple is viewed as more than iPhone, Inc. the stock will go nowhere.

    nonsense. their vision is clear -- make amazing goods people want to buy. even if you took away iPhone their other lines of business are each bigger than other entire companies. major companies at that.
    What company doesn't have that vision? What about that is unique to Apple?
    Dan Andersen
  • Reply 37 of 81
    sog35 said:
    shahhet2 said:
    sog35 said:
    mvigod said:
    I think the best course is to simply sell the stock and buy something else that isn't a broken or hated ticker like Apple.  No matter what apple does their stock isn't going to get the respect shareholders want it too.  Just look at the returns the last couple years to see that.  So you can stick with Apple and 'hope" that the market all of a sudden thinks it is worth much more or simply reinvest the proceeds into other more "loved" stocks and stories with more upside.  Plenty of choices there.  

    I sold all my Apple stock some time ago and redeployed into Google, S&P 500 index and some biotechs which have all done well.  Had I stuck with apple I would be a very frustrated shareholder.  I just knew from how the street and media treated the stock constantly it wasn't going to ever escape this sentiment.  So apple will continue to trade at very low "cheap" multiples.  At such time when iphone YOY sales drop or margins fall (or both) the stock will have a big leg down as investors think the story is over in terms of apple's profit growth.  So goes iphone so goes apple is the mantra.

    Remember, Apple has to sell an unprecedented number of phones at least for the next 5 to 7 years to justify today's 7B market cap.  That is no easy hurdle.  If you think somewhere on that timeline there is a risk that maybe, just maybe, the unit sales or margins fall then there is going to be more pain and stagnation in the Apple ticker.

    Hoping that Apple stock will be loved by Wall Street and not be manipulated is just not a realistic investment strategy anymore.  I watched it for too long and got out because I knew things were going to flatline, underperform and eventually underperform even the index.  In the end the index is your bogey.  If your stock can't outperform that then there is no reason to own it.

    You sound like a Wall Street lackey.

    So you say Apple needs to keep revenue flat for the next 7 years just to justify today's $600 billion market cap (you said $7 billion which is wrong)?

    Apple has $250 billion in cash right now.
    They make $60 billion in free cash flows each year.
    So in 7 years with FLAT GROWTH they will have $670 billion in cash.

    So you are saying Apple needs to have $670 billion in CASH to justify their $600 billion market cap?
    Do you even hear what you are saying?

    On the other hand Google has a PE of 33.  To justify their PE they need to GROW revenue 20% for the next 7 years.  Really?  They already own 85% of the internet ad dollars and you want then to grown revenue 20% each year and 250% compounded the next 7 years?  Give a break.  You are a trader and not an investor.  
    Wrong on all counts as far as your AAPL numbers go.

    AAPL has only $19 usable domestic Cash out of total cash of $206B and not $250B
    On top of that AAPL has domestic debt of $64B, so Actual local Cash that AAPL has is 206-64= $142B and as said $187B is locked outside US and can't be brought back
    Check yourself: http://forums.appleinsider.com/discussion/189795/apple-inc-snatches-up-14-billion-of-its-own-shares-in-massive-q4-buyback-surge/p1

    Now, if you take 2015 results, While AAPL made $53B  Net Profit in latest year, AAPL spent $12B for dividend  and $30B for Stock Buyback, so they only kept only $11B in their kitty for year ending 2015.

    Institutional investors hold $380B of AAPL Stock, which will demand hefty premium even to think about selling their holding, and AAPL has net debt of $45B locally (If they can't bring outside cash because of hefty penalty) and by what basis you are again suggesting for AAPL to go private?



    Apple's company wide tax rate is 25%
    Before income tax they make about $75 billion in profit.
    Now lets say they tax the entire $75 billion at 35% USA rate
    That leaves $48 billion in cash after ALL TAXES PAID.

    Your calculation is wrong because you assume all the cash Apple holds in foreign countries will be taxed at 35%.  That is wrong.  It will be taxed at the difference of what they paid in foreign tax less the 35%.  So if they already paid 25% tax in China, they would only pay 10% when they brought the money back to the USA.

    Thus even at a full 35% tax rate on all income Apple would have $48 billion in cash a year.

    $48 billion x 7 years = $336 billion
    Apple has $250 billion in cash now.  Remember their company wide tax rate is 25%.  So that $250 billion would only face a 10-15% tax penalty if they brought it back to the USA. So that gives you $212 billion.

    In 7 years they would have $548 billion in domestic cash. 
    Now minus 7 years of dividends and you get $470 billion in cash.


    1)You still can't read, can you?
    ~$50 profit - $12B Dividend - $xx on BuyBacks = ~$20-30B Net Cash (2015 was only $11B due to $30B Buyback)

    2)Do you know that Yahoo cancelled Alibaba(Which is also based on China) cashout, which has value holding of $33B?
    They even tried to trick US Govt by making it separate holding company for Alibaba shares to avoid tax penalty and still got denied.
    APPL is not bringing cash back to US without major tax holiday, period. If they could have, they would have done it already.
    Now you don't have to keep going to explain why/how AAPL can bring cash back to US to just prove your other worthless point of going private.

    3)Again AAPL have $206B Cash - $64B debt = $142B Cash and not $250B Cash.

    4)AAPL keeps spending money on dividend and buybacks, They are not netting more then 20-30B on average each year, forget about making $48 x  = $336B. 
    First let it happen for one year without dividend or cashback for any single year and then count it.

    5)Whatever Net Profit AAPL, makes it still staying outside US and not coming back to US.
    That is the the one of the major reason AAPL is buying DEBT locally to pay for dividend and buy backs. (Addition to low interest rates)
    So Whatever Profit AAPL is earning is still staying outside and domestic net profit gets spent on Dividend/buybacks.

    so again No, AAPL doesn't have any cash to buy any stock and no AAPL is not bringing it's cash from international market without any tax holiday.
    So again stop your rant.




    edited December 2015
  • Reply 38 of 81
    Anything that causes a collapse in AAPL would be a result of the wider, global economic collapse, not Apple alone. Peak iPhone? Come on. Plenty of Chinese still need iPhones, and then there’s India and most of the rest of the second and third worlds to serve.

    Anything that forces Apple to make us some upgrades we can’t refuse would be great, but is there really reason to assume that will happen on its own anytime soon?
  • Reply 39 of 81
    proapple said:

    5150iii said:
    I'm not looking for Apple to start being an open book but what about reaffirming fullyear guidance or something like that to push back at these reports.
    Why care?

    Are investors hurt by these short term gyrations?
    I see where you're going with this but I don't appreciate seeing my sound investment strategy getting kicked around by this "market." It certainly feels like a full-court press with the media these last couple days doing their best to bash and doubt. 
  • Reply 40 of 81
    The author of this article said, "Who's winning the most from Apple's irrationally low stock price? Ironically, it's Apple and its shareholders. That's because Apple has been burning through its capital return program, buying back billions worth of shares at prices that are stupidly low."

    For all practical purposes, I don't see how Apple's share buyback program is helping me at all.  When you have 5.5B shares on the market, retiring 700 million shares will increase the EPS and lower the PE; but so what?  The stock price won't necessarily go up, as we have seen.  In contrast, if that money were paid out to shareholders, I would get a clear benefit.  

    Apple used $80B to buy back its stock between August 2012 and March 2015;  over the same period, they paid out about $32B in dividends (an annual rate of roughly 2% of the stock price). If they had used that $80B to increase dividends, the rate would be so high (~5-6.0%) that AAPL would be an extremely attractive stock.  I believe it's per share value would be much higher under that scenario.  
    palomine
Sign In or Register to comment.