Maybe it was the news about Dunkin' Donuts planning to shut down 100 stores this year and next that has markets jittery today. ????
"Wall Street logic"
It is bad news for only Apple. People get coffee and donuts at DD. while waiting in line, they play on their iPhones. With less stores, they'll be less people waiting and thus less need for an iPhone. It all makes "Wall Street" sense.
The 7-for-1 split was meant to reduce volatility IIRC.
The 7-for-1 was meant to position AAPL for inclusion in the Dow Jones index, which (in my opinion) was unwise. Dow connected companies tend to do worse after they're added.
In fact almost all of the stock related advice Apple has taken has turned out to be a bust.
Funny, they take a questionable report that can't be verified as fact, yet ignore that Apple is getting TSMC and Samsung to make their A9 processor.
If they knew anything about fabs they'd realize it would have cost Apple a LOT of money to produce their processor using two different fabs. There's no reason for Apple to outlay that much money on such an expensive endeavor if they weren't concerned with having enough processors to meet demand.
Here's a perfect example of actual verifiable facts (using two fabs) vs a rumor and the rumor having more traction.
If Apple is looking to buy back stock, now is a good opportunity. I'm not saying that Apple had anything to do with this rumor, but it certainly isn't in their best interest to respond to it right away.
Someone please correct me if I'm wrong, but as I understand it Apple realizes no benefit purchasing shares up or down. This isn't an investment to them, it's a return program for shareholders. Stocks they purchase are retired increasing the price for those still in the game, and increasing their share of ownership. Apple has absolutely no incentive for seeing share price fall. Ever.
As I've said before I'll be glad when Apple, Inc. is no longer iPhone, Inc. The stock price and sentiment all centers around one thing: iPhone sales. Many on Wall Street are convinced the iPhone bubble is going to burst so any rumor, no matter how vague or questionable, will send the stock downward.
You summarized my point with actual numbers. Buybacks are being exploited by speculators. I completely agree with you about increase dividend.
I disagree. A stock with a large dividend is a good indicator of a company that no longer knows what to do with their money. Considering most of that massive cash pile is overseas, a bigger dividend would have the net effect of adding debts and obligations for Apple. A bigger dividend weakens the company while "pandering" with handouts to flyby investors, not long term investors. The regular appreciation of the stock is the best indicator of a company that is still on track and is reward enough for investors committed to the long haul view of the company. I also think Cook needs to start bringing back more of the aggressive startup mentality to Apple and stop appeasing the critics.
At this point, I believe Apple should eliminate both the buybacks and the dividend.
The 7-for-1 was meant to position AAPL for inclusion in the Dow Jones index, which (in my opinion) was unwise. Dow connected companies tend to do worse after they're added.
In fact almost all of the stock related advice Apple has taken has turned out to be a bust.
Eric Jackson, who's claim to fame was going after Yahoo for many years thinks Apple's buyback program is a mistake and there's nothing much to show for it. Though he thinks Apple should have acquired a big company like Netflix or Twitter which I personally think would be a disaster. I can't think of one instance where a merger of two big companies worked out. AOL/Time Warner was a bust. HP/Compaq? Google/Motorola? Microsoft/Nokia? All pretty much busts.
So are you telling the rest of Apple's revenue stream is WORTHLESS?
I don't think so but apparently Wall Street does. Maybe once we get Apple Car things will be different. ?Watch and ?TV are too small for Wall Street to care.
The 7-for-1 was meant to position AAPL for inclusion in the Dow Jones index, which (in my opinion) was unwise. Dow connected companies tend to do worse after they're added.
In fact almost all of the stock related advice Apple has taken has turned out to be a bust.
I recall them initially saying that it will open up to more retail investors and in turn reduce volatility. The initial press release did not specify DOW interest.
Perhaps my logic is a little off, but it is hard to see how anyone *really* thinks that Apple will sell equal or less iPhones than last year's holiday quarter:
- Precedent. iPhone sales have always increased. Even when margins took a hit - from the fantastic 4s margins to more normal 5 (which is what caused the stock retreat of 2013) - units & revenue increased.
- As of end of Q2 CY 2015 (Apple's Q3), mgmt stated that only ~30% of installed base had upgraded to 6 series, despite the mammoth sales of past 3 quarters. Will see what that is at come end of this past quarter, but likely over 50% remain.
- mobile phone market itself continues to grow & has a few years left in it
- Apple is growing switchers, especially in more mature markets. Why would this change with an even better phone & better financing plans? What is the competition really at the higher end?
- Apple has the best (by far) retention/churn rate in the industry - once in, few leave for other smart phones - and expect this to improve with the large screen phones & ever increasing ecosystem
- iPhone 6s/+ is quite widely acclaimed to be the best smart phone on market for this holiday season
- The upgrade program & wireless carrier equivalents are mitigating the reduction in subsidies, and in fact this is considered to be more positive to upselling to newer model each year for some.
- Best lineup of iPhones - lowest is 5s (64-bit A7 with TouchID), with both 6/6+ at $100 less, and the highly advanced 6s/6s+
- Off to a great start with 13M sales on opening weekend (and on the China question, while not there last year's opening weekend, they were in 2013 - when 9M iPhones were sold, so that is a sizeable increase - 44% - from 2 years ago if looking at country comparable). And it would again seem to be a supplied constrained number.
All analysis points to a very good iPhone holiday quarter. And at the broader picture, Apple will have contributions from
- Services, led by Apple Music (overall services growth has been good & this + more Apple Pay is icing on the cake)
- iPad (hopefully) stabilizing on revenue with iPad Pro at high end, good prices for the Airs, and upgrade with Mini 4 (last year iPad was a negative number YoY, so just stabilizing for this year would be a positive overall).
- Apple Watch contributions (small but better than was there before)
- New AppleTV + iPods
- Continued Mac growth (looking for iMac updates this Q).
. I can't think of one instance where a merger of two big companies worked out. AOL/Time Warner was a bust. HP/Compaq? Google/Motorola? Microsoft/Nokia? All pretty much busts.
That's because we remember the failures. Success is too boring for coverage.
Eric Jackson, who's claim to fame was going after Yahoo for many years thinks Apple's buyback program is a mistake and there's nothing much to show for it. Though he thinks Apple should have acquired a big company like Netflix or Twitter which I personally think would be a disaster. I can't think of one instance where a merger of two big companies worked out. AOL/Time Warner was a bust. HP/Compaq? Google/Motorola? Microsoft/Nokia? All pretty much busts.
Yes, I have seen statistics that 80% of large scale acquisitions or mergers are considered failures when looking at the longer term. They are almost always done for reasons of ego or short-term stock benefits. Apple doesn't do either of those.
When a company manages is business with its primary focus on the stock price, they are truly doomed. Apple for the most part seems to have that long term vision, and leave the share price to itself, with the new addition of a capital return program (which is not about making operating level business decisions with an eye on the stock).
I recall them initially saying that it will open up to more retail investors and in turn reduce volatility. The initial press release did not specify DOW interest.
These things all happen for selfish reasons. What do I mean by "selfish"? I mean that when decisions are made which significantly impact the direction of a company, the regular reasons people make ANY decisions apply, that is to say that self-interest is always the primary motivator and fear or the rationalization of risk are a close second. Which person or persons inside Apple were attracted to the idea of encouraging more institutional investors? Obviously those with more experience or a stake in institutions, as they would benefit.
And don't say just hold and let Wall street do this bullshiit since it will go up EVENTUALLY.
Its been 3 years since Sept2012 and the stock is up a pathetic 8% while its EPS is up 45%.
Close to 70% of Apple's revenue comes from iPhone. Wall Street is convinced iPhone growth has stalled or will stall (because the premium smartphone market is saturated, growth in China is slowing, iPhone will be disrupted by cheaper options, etc. take your pick). I don't know what Apple can do about that. Even when they sell a record number of phones it doesn't matter as the sentiment is always bad news is coming (esentially the exact opposite of Amazon). Maybe once we get Apple car things will change though I suppose then the stock will live and die by how many cars were sold in a quarter.
Sometimes I think that AAPL will never have a meaningful break out. Anytime good news is announced it is tempered with negative spin and FUD. This cycle could really just repeat over and over. It makes being long AAPL seem like running in place.
Yeah. It would make you laugh if it weren't so sad.
The problem is that WS got no clue how many suppliers Apple have and just based on a rumor from a single supplier, it estimated the % of one supplier as the whole % supply. It totally BS. What if Apple reduced order from TMSC supply but increase from Samsung? No one knows and WS just love to manipulate the stock just based on an unknown bs rumor from the East.
I think they know that they don't know. The real problem is they don't care and use the shares as another toy in their playground.
I think the solution is for Apple to stop the buybacks and increase the dividend.
I have been a strong supporter of the buyback but I think its a waste of money at this point.
At its peak in FY2012 Apple was over $100. Today it's at $108. That is a stock appreciation of less than 3% a year. That is flatout ridiculous and criminal. Since FY2013 Apple has grown EPS by 45% and sales by 50%. Yet the stock is up only 8%.
Wall street will continue to disrespect Apple. It the same bullshiit cycle. Apple blows out earnings. But Wall Street says these earnings are not sustainable. They have been saying this since 2012! They keep pushing the goal post further and further. Blow out a quarter and they just say next quarter won't be a blow out. Its beyond frustrating.
I think Apple needs to increase the dividend to 4%-5%. Apple makes about $50 billion in free cash flows a year. A 4% dividend will be about $25 billion a year. I think that is a much better way to use the money instead of the $90 billion spent on buybacks that has had ZERO positive on the stock price (based on EPS growth vs price growth)
Comments
This !!
You summarized my point with actual numbers. Buybacks are being exploited by speculators. I completely agree with you about increase dividend.
It is bad news for only Apple. People get coffee and donuts at DD. while waiting in line, they play on their iPhones. With less stores, they'll be less people waiting and thus less need for an iPhone. It all makes "Wall Street" sense.
The 7-for-1 was meant to position AAPL for inclusion in the Dow Jones index, which (in my opinion) was unwise. Dow connected companies tend to do worse after they're added.
In fact almost all of the stock related advice Apple has taken has turned out to be a bust.
Funny, they take a questionable report that can't be verified as fact, yet ignore that Apple is getting TSMC and Samsung to make their A9 processor.
If they knew anything about fabs they'd realize it would have cost Apple a LOT of money to produce their processor using two different fabs. There's no reason for Apple to outlay that much money on such an expensive endeavor if they weren't concerned with having enough processors to meet demand.
Here's a perfect example of actual verifiable facts (using two fabs) vs a rumor and the rumor having more traction.
Someone please correct me if I'm wrong, but as I understand it Apple realizes no benefit purchasing shares up or down. This isn't an investment to them, it's a return program for shareholders. Stocks they purchase are retired increasing the price for those still in the game, and increasing their share of ownership. Apple has absolutely no incentive for seeing share price fall. Ever.
I disagree. A stock with a large dividend is a good indicator of a company that no longer knows what to do with their money. Considering most of that massive cash pile is overseas, a bigger dividend would have the net effect of adding debts and obligations for Apple. A bigger dividend weakens the company while "pandering" with handouts to flyby investors, not long term investors. The regular appreciation of the stock is the best indicator of a company that is still on track and is reward enough for investors committed to the long haul view of the company. I also think Cook needs to start bringing back more of the aggressive startup mentality to Apple and stop appeasing the critics.
At this point, I believe Apple should eliminate both the buybacks and the dividend.
Eric Jackson, who's claim to fame was going after Yahoo for many years thinks Apple's buyback program is a mistake and there's nothing much to show for it. Though he thinks Apple should have acquired a big company like Netflix or Twitter which I personally think would be a disaster. I can't think of one instance where a merger of two big companies worked out. AOL/Time Warner was a bust. HP/Compaq? Google/Motorola? Microsoft/Nokia? All pretty much busts.
I don't think so but apparently Wall Street does. Maybe once we get Apple Car things will be different. ?Watch and ?TV are too small for Wall Street to care.
I recall them initially saying that it will open up to more retail investors and in turn reduce volatility. The initial press release did not specify DOW interest.
Perhaps my logic is a little off, but it is hard to see how anyone *really* thinks that Apple will sell equal or less iPhones than last year's holiday quarter:
- Precedent. iPhone sales have always increased. Even when margins took a hit - from the fantastic 4s margins to more normal 5 (which is what caused the stock retreat of 2013) - units & revenue increased.
- As of end of Q2 CY 2015 (Apple's Q3), mgmt stated that only ~30% of installed base had upgraded to 6 series, despite the mammoth sales of past 3 quarters. Will see what that is at come end of this past quarter, but likely over 50% remain.
- mobile phone market itself continues to grow & has a few years left in it
- Apple is growing switchers, especially in more mature markets. Why would this change with an even better phone & better financing plans? What is the competition really at the higher end?
- Apple has the best (by far) retention/churn rate in the industry - once in, few leave for other smart phones - and expect this to improve with the large screen phones & ever increasing ecosystem
- iPhone 6s/+ is quite widely acclaimed to be the best smart phone on market for this holiday season
- The upgrade program & wireless carrier equivalents are mitigating the reduction in subsidies, and in fact this is considered to be more positive to upselling to newer model each year for some.
- Best lineup of iPhones - lowest is 5s (64-bit A7 with TouchID), with both 6/6+ at $100 less, and the highly advanced 6s/6s+
- Off to a great start with 13M sales on opening weekend (and on the China question, while not there last year's opening weekend, they were in 2013 - when 9M iPhones were sold, so that is a sizeable increase - 44% - from 2 years ago if looking at country comparable). And it would again seem to be a supplied constrained number.
All analysis points to a very good iPhone holiday quarter. And at the broader picture, Apple will have contributions from
- Services, led by Apple Music (overall services growth has been good & this + more Apple Pay is icing on the cake)
- iPad (hopefully) stabilizing on revenue with iPad Pro at high end, good prices for the Airs, and upgrade with Mini 4 (last year iPad was a negative number YoY, so just stabilizing for this year would be a positive overall).
- Apple Watch contributions (small but better than was there before)
- New AppleTV + iPods
- Continued Mac growth (looking for iMac updates this Q).
That's because we remember the failures. Success is too boring for coverage.
Do you have any instances of successful ones? I'm talking big mega mergers.
Eric Jackson, who's claim to fame was going after Yahoo for many years thinks Apple's buyback program is a mistake and there's nothing much to show for it. Though he thinks Apple should have acquired a big company like Netflix or Twitter which I personally think would be a disaster. I can't think of one instance where a merger of two big companies worked out. AOL/Time Warner was a bust. HP/Compaq? Google/Motorola? Microsoft/Nokia? All pretty much busts.
Yes, I have seen statistics that 80% of large scale acquisitions or mergers are considered failures when looking at the longer term. They are almost always done for reasons of ego or short-term stock benefits. Apple doesn't do either of those.
When a company manages is business with its primary focus on the stock price, they are truly doomed. Apple for the most part seems to have that long term vision, and leave the share price to itself, with the new addition of a capital return program (which is not about making operating level business decisions with an eye on the stock).
These things all happen for selfish reasons. What do I mean by "selfish"? I mean that when decisions are made which significantly impact the direction of a company, the regular reasons people make ANY decisions apply, that is to say that self-interest is always the primary motivator and fear or the rationalization of risk are a close second. Which person or persons inside Apple were attracted to the idea of encouraging more institutional investors? Obviously those with more experience or a stake in institutions, as they would benefit.
Close to 70% of Apple's revenue comes from iPhone. Wall Street is convinced iPhone growth has stalled or will stall (because the premium smartphone market is saturated, growth in China is slowing, iPhone will be disrupted by cheaper options, etc. take your pick). I don't know what Apple can do about that. Even when they sell a record number of phones it doesn't matter as the sentiment is always bad news is coming (esentially the exact opposite of Amazon). Maybe once we get Apple car things will change though I suppose then the stock will live and die by how many cars were sold in a quarter.
Yeah. It would make you laugh if it weren't so sad.
I think they know that they don't know. The real problem is they don't care and use the shares as another toy in their playground.
Somehow sounds like giving in to blackmail.
Does Disney and Pixar/Marvel/LucasFilm count?