Research archive for AAPL

The nerds of NASDAQ managed to only add 6 odd points, but is still the outperforming market in the US year to date, up 23 percent plus. And without the help of Apple inc. which is nearly 13 percent lower on the year. Apple has a market cap of 422 billion Dollars, twice the size of food giant Nestle. Wow, that is sizeable. On the list of global businesses listed in the US, Google is in third place and within a whisker of 300 billion Dollars in market capitalisation.

The big Apple announcement is coming today. Lower priced coloured phones to cater for the needs in emerging market? A deal with China Mobile as a carrier in mainland China? A faster processor and newer high end phone? All of those things? Because it is a huge consumer stock with a huge following, it is probably the most widely covered company that I can think of. There are many, many people who have been working at the rumour mill, trying to eke out more information.

What is going on with the Apple share price? Over the last five trading sessions the stock is up 7.21 percent. Over the last month the stock is up 16.88 percent, but year to date the stock is down 6.33 percent. And last evening the stock went through the 500 Dollar mark for the first time. Marc Ashton, who's day and night job is the editor of Finweek, tweeted an article from the BusinessInsider that he thought we might enjoy. And we sure did, thanks! It is an opinion piece from the founder of the now hugely popular finance website/blog, the Businessinsider's Henry Blodget: Can Someone At Apple Please Tell Tim Cook That He Doesn't Have To Waste Time Talking To Investors?

And then we had the results of Apple inc. for their third quarter last evening after the market closed. Possibly the most anticipated results of the "season" so far. Surprising on the upside, but truth be told, the expectations bar had been set pretty low. Possibly the chattering classes who are looking for newer gadgets and hoping that the cycles are shorter (like the full moon cycle, 28 days!) between products redesigned and new releases. The iPhone and the subsequent refreshers pushed the boundaries and at the fringes (seemingly) very little has been added, but that is not entirely true. New gadget seekers have just become more impatient and excitable. Google glasses, Apple watches and so on, these are the innovators that both investors and consumers demand something wow.

The Apple Worldwide Developer Conference (WWDC) takes place in San Francisco from Monday through Friday this week, geeks of the world unite. Of course you have to get a ticket to attend, I think all of them were sold out in less than three minutes. For this years event, I saw online that a bit of perspective is needed, the same tickets took 12 hours to sell out in 2011, and 2 hours in 2012. And just three minutes (or was it 71 seconds) in 2013. So tell me, do you think that the developers are keen to see the new products and platforms? You betcha!

Apple are always in the news but over the last few days they have hit the headlines slightly more than usual. Sasha did mention it yesterday but I found a WSJ article which explained the implications of the Samsung Court ruling very well. In case you missed it, Apple lost a legal ruling which has banned them from selling certain models in the US.

And on that note, let us speak the English that we know and look at a Vodacom trading statement that has been released this morning. Looks excellent at face value. However, this is comparing against a period where there were negative once off charges. But that is the way that it rolls, once offs are exactly that. Results for the year to end March are expected on the 20th of May. And when they arrive, it will show that HEPS will be between 20 to 25 percent more than the 709 cents reported last year. Between 850 to 886 cents, more or less for the full year. So that is good, right? Yes. I suspect that the market will have expected something around here, if not a little less, an upside surprise is always a good thing. More importantly, the yield at current prices is around 7.5 percent. Yowsers. That is excellent.

Wow. Apple got juiced last evening. The stock fell below 400 Dollars for the first time in a year and a half, ending the session down 5.5 percent to 402.8 Dollars. 52 week closing low. The dividend yield is now 2.63 percent. That is right. It now has cash as a percentage of market cap of 36 percent, that is about as high as it got in the financial crisis of 2008, cash as a percentage. And I am just guessing that they probably have more cash, not less. You would swear, as Cramer said on his show, that they were going to register a loss next week. Of course we are talking our own book.

I also found that announcement apologizing to the Chinese consumers a little laughable, because surely the most critical consumer in the world still has to be the one in the US? The government in China strong arming Apple to apologize for their warranty policy in that country. Arrogant company? Yes, probably, but the same warranty applies in the US, as it does in China. Tim Cook went a long way to dispel the notion that he didn't care about the consumer in China. Paul had some choice words in a tweet that said, until your air is fit to breathe and there aren't any dead pigs floating in your rivers, you basically should be directing your rage elsewhere about Apple and KFC.

He basically said that if he was Tim Cook he would ignore David Einhorn. And what he said made sense, you can't look to run the business to see the stock up every other day. Try and create as much value as you can over the next five to ten years. At the end of the last quarter, Apple had 137 billion Dollars worth of cash. Buffett reckons that they should buy back a whole lot of stock at these levels. The companies cash pile to market cap is nearly 35 percent. At the depths of despair in the market washout of 2008 and lows of March 2009, that percentage was at 37 percent. Surely the company is in far better shape now than it was then? That is a discussion for another day. To finish off, Apple have annual operating cash flows of nearly 51 billion Dollars. The stock trades nearly 21 million shares a day. At the current trade rate the entire company will turn over in 45 days. That is just nuts.

Why Tim Cook, Apple's CEO used this as a platform is perhaps beyond me, but I guess this one came with a little umpfff. The event was the Goldman Sachs technology conference, the place was San Francisco. Initially the stock was up, but it ended down around two and a half percent. In part due to the fact that Cook said that too many impatient investors spoil the broth the companies cash was not burning a hole in their pocket. And that the remarks and lawsuit from David Einhorn were a silly sideshow. And not a well thought out lawsuit following a detailed slideshow. I can understand the want and desire of David Einhorn to spruce up his returns, but I am guessing that if he is not patient enough, then find another investment with more juice. Or buy more shares and ruffle some feathers on the board. I guess his fund does not have the money to do that. BlackRock, the worlds biggest asset manager has been buying Apple shares like crazy, they own 5.31 percent, or 49.8 million shares. What do they think?

Yesterday Apple was in the news again. Actually Apple is in the news most days but this was quite an interesting turn of events. David Einhorn, the famous hedge fund manager who started Greenlight Capital, publicly requested Apple shareholders to vote against a proposal which would eliminate the company's ability to issue a preferred stock that pays a dividend.

Apple was a huge drag on the broader index which eventually ended as close to flat as one could possibly imagine. Down a whopping 12 percent is where Apple finished, we are reminded that this is a very widely owned stock and if the majors are pushing and getting out at any level, it will have an impact. 52 million shares traded yesterday, that is around 5.4 percent of the entire outstanding shares (938 million) of Apple. 5.4 percent? In one day? At that run rate the entire share capital of the company would swap hands in less than 19 trading days. Talk about making up your mind!

Sometimes when you are expecting Wagyu Kobe beef steak (the finest I am told, 258 Dollars per kg – 2321 ZAR per kg, it better be!) and instead you are slapped with a filet mignon. Apologies to my vegetarian, Hindi, Muslim and Jewish friends, you can send me another comparison. What I am talking about are the Apple results. You were expecting world class and all you got was enough to make the national team. Not all bad, because as the headline says: Apple Reports Record Results.

There is no doubt that Apple has lost market share. It was inevitable. When you have those kinds of margins as first movers in the high end smartphone market, it is standard economics 101 that competitors will see those abnormal returns and try and get their piece of the pie. Samsung have been worthy competitors responsible for 31.3% of shipments in the third quarter of 2012 compared to Apple's 14.6%. For Apple however it was never about market share of shipments, it was market share of profits of which they pulled in over 60% at the end of last year.