AAPL - Apple Inc.

[DCG]

iPad mini commercial (is there really not a way to embed youTube videos on here?) : http://www.youtube.com/watch?feature=player_embedded&v=vM9U70HgLsQ

 

Well done.

[Smazz]

I honestly thought you were going to post this one:

 

 

2x more popular vid and 10x more entertaining!! ;D

[benchmark]

Incredible:

 

http://www.bloomberg.com/news/2012-11-02/apple-new-york-stores-sell-out-ipad-minis-after-sandy-hit.html

 

No transportation, no electricity.

 

Here is the reality check in sunny california

 

http://www.mercurynews.com/60-second-business-break/ci_21915689/biz-break-no-sales-frenzy-ipad-mini-wall

 

[DCG]

Now at around 12x trailing earnings.

[Guest rimm_never_sleeps]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

[DCG]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

right...because this makes sense.

[Guest valueInv]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

 

Do you ever bother with the facts?

[DCG]

And even if they returned the entire $101B to shareholders, the stock would still be at 12x earnings.

[Uccmal]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

 

Do you ever bother with the facts?

 

Some facts for you:

 

http://www.bloomberg.com/news/2012-11-07/apple-drops-20-percent-from-intraday-record-san-francisco-mover.html

 

ummm announced buybacks isn't buybacks.  10 B at several times book on a 500 B company is just BS.  I would be really impressed if they got clearance and announced 50 or 100 B in dividends and/or buybacks. 

 

BTW Smazz, great video.

[Guest rimm_never_sleeps]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

 

Do you ever bother with the facts?

 

lol. they are only going to be returning a fraction of the cash flow they earn over the next three years, let alone a single dime out of the mountain of excess cash that is sitting there earning zero.

http://www.mercurynews.com/business/ci_21916488/apple-mini-lines-mini-ipad-store-low-sales-turnout

[Guest valueInv]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

 

Do you ever bother with the facts?

 

lol. they are only going to be returning a fraction of the cash flow they earn over the next three years, let alone a single dime out of the mountain of excess cash that is sitting there earning zero.

http://www.mercurynews.com/business/ci_21916488/apple-mini-lines-mini-ipad-store-low-sales-turnout

 

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

 

They are returning $45B over the next three years. So what fraction do you think that is? 10%?  ;D

[Guest valueInv]

shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

 

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

 

Do you ever bother with the facts?

 

Some facts for you:

 

http://www.bloomberg.com/news/2012-11-07/apple-drops-20-percent-from-intraday-record-san-francisco-mover.html

 

ummm announced buybacks isn't buybacks.  10 B at several times book on a 500 B company is just BS.  I would be really impressed if they got clearance and announced 50 or 100 B in dividends and/or buybacks. 

 

BTW Smazz, great video.

Yeah, I noticed the stock price and have been adding. 10B buybacks at 12 times earnings for a company that grew 25% on a missed quarter is pretty good. The buybacks are in addition to their dividend.

 

Obviously, they are not going to return $100B when the cash they have is $120B.

 

Since you're back on the thread, here's a fact for you:

 

http://bgr.com/2012/11/05/ipad-mini-sales-opening-weekend/

 

No bad for a product that received "no coverage" and had no advertising. How many companies you know that can release a product in "secret" and move 3M in the opening weekend?

 

Here's another fact for you:

http://www.reuters.com/article/2012/11/01/us-apple-ipad-components-idUSBRE8A017220121101

 

#facts.

 

[Uccmal]

Valueinv,

 

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

 

 

[Olmsted]

Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

 

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup. 

[racemize]

Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

 

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

 

Unless the overall growth in the tablet/smartphone market offsets market share loss.

[DCG]

Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

 

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

 

At the moment, I'm more concerned with their continued supply issues than competition.

[Guest valueInv]

Valueinv,

 

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

 

If I were you, I wouldn't buy it at any price. This company is waaaay outside your circle of competence.

[Guest valueInv]

Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

 

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

 

At the moment, I'm more concerned with their continued supply issues than competition.

 

+1. Particularly concerning if we don't see wait times decline by Black Friday.

 

Every time I bought Apple, it was when they released a new product and the world crapped on them.

Essentially, I handicapped products, not the stock.

 

With all the attention and expectations surrounding them, I was resigned to the fact the I would never get a buying opportunity again. I thought that everyone figured out how to read the company and my advantage was lost. Boy, was I wrong!

 

The funny thing is I am a contrarian within a contrarian board :-)

[Guest rimm_never_sleeps]

 

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

 

They are returning $45B over the next three years. So what fraction do you think that is? 10%?  ;D

 

exactly. they will be taking in over $150b (if all your rosy projections come true) and will be returning $45b without so much as touching a dime of the $120b of Net Cash on the balance sheet (around 22% of market cap). Is it any wonder that it is selling for less than 11 times f2013 estimates?

[DCG]

 

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

 

They are returning $45B over the next three years. So what fraction do you think that is? 10%?  ;D

 

exactly. they will be taking in over $150b (if all your rosy projections come true) and will be returning $45b without so much as touching a dime of the $120b of Net Cash on the balance sheet (around 20% of market cap). Is it any wonder that it is selling for less than 11 times f2013 estimates?

 

They are selling at a low price because of concerns over supply and competition, NOT because they're not giving away their cash. Are you complaining that Berkshire isn't doing anything with their $48B of cash right now?

[DCG]

Article on Barrons today - just for you RIMM Never Sleeps (how much cash is RIMM returning to shareholders, by the way?):

 

Apple's Dividend Set to Surge

 

Apple stock has quietly sagged to valuation levels more commonly associated with slower-growth companies like Microsoft (MSFT). That's an opportunity for investors, but not ones who are looking for quick price gains. Rather, Apple (ticker: AAPL) should appeal to those who wish to turn savings into healthy and rising income.

 

This past summer, cash-rich Apple joined the ranks of companies that pay quarterly dividends to stockholders. Its first payment of $2.65 a share, made on Aug. 16, worked out to annualized yields of just under 1.7% when calculated by the share price at the time. But as share prices fall, yields rise. Apple stock is down 12% since that first dividend payment. The $2.65 payment set to go out on Nov. 15 makes for an annualized yield of 1.9%.

 

That's not an especially impressive number -- yet. The 10-year Treasury note yields 1.6% and the broad Standard & Poor's 500 stock index, 2%. The key for income investors, however, is that Apple's payment is likely to rise relatively quickly. Those who buy shares today could see their dividends double within three years.

 

There are three reasons. First, with bond yields at historic lows, investors are chasing after stock dividends, lifting valuations for companies that traditionally pay them, like utilities, consumer staples makers and real-estate investment trusts. That has made other companies keen to meet investor demand for dividends.

 

The number of S&P 500 companies that pay dividends recently hit 403, the highest since 1999. Analysts reckon third-quarter dividend payments for the S&P 500 rose 20% from a year earlier even though earnings didn't grow.

 

Dividend demand will be a major investment trend for years to come as baby boomers look to generate more investment income for retirement and find bond yields too stingy, according to Savita Subramanian, the top stock strategist at Bank of America Merrill Lynch. S&P 500 companies look capable of paying more; their current dividends cost about 30% of earnings, versus a historical average of more than 50%.

 

Apple, however, started paying dividends at a much lower rate than other big tech firms -- 20% of projected earnings, versus 32% for Microsoft and 29% for Cisco (CSCO). It's common for new dividend-payers to start small, but Apple is likely to make its payments more competitive in coming years. Cisco, for example, has more than doubled its quarterly payments since it began making them last year. That's the second reason Apple's payments are likely to rise quickly.

 

The third reason is that, although Apple's growth is slowing, it's not yet slow. Wall Street expects its earnings to jump 15% in its current fiscal year, which runs through September 2013. That's more than twice as fast as Microsoft or Cisco. Apple already sits on cash and investments worth $128 per share, or about 23% of its stock price (although much of that is held overseas for tax purposes, meaning it won't be paid as dividends for now). Judging by Wall Street forecasts, it should reel in another $175 per share in free cash over the next three years.

 

Apple stock isn't without risk. Part of the reason for its recent decline is that iPhone supplies are running low due to production problems. In the short term, that could cause Apple to miss earnings forecasts, which in turn could drag its stock price lower. And of course, Apple has plenty of competition for smartphones and tablet computers.

 

That aside, Apple's slide gives stock buyers a way to get a 4% yield on their initial investment without delving into low-quality companies. Simply buy Apple stock yielding 1.9%, and wait.

[Guest rimm_never_sleeps]

i agree 100% that competition is a huge problem for apple right now. as for berkshire, if current apple ceo had a glorious 60 year record of capital allocation that current Berkshire ceo has had, I would not be concerned at all about that $120b+. I can assure you that balance sheet is going to be an increasing area of focus now that apple is reverting to the mean as a business.

[DCG]

i agree 100% that competition is a huge problem for apple right now.

 

I didn't say that I thought competition is a huge problem. I said it's part of the reason the stock has declined recently, as analysts think that. There's always going to be competition.

 

Part of the decline is also due to people looking to lock in profits for taxes. Beside from you, I've yet to hear from 1 other person who thinks their dividend amount is the reason the stock has declined. The stock had a huge run. Stocks don't go straight up.

[Uccmal]

Valueinv,

 

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

 

If I were you, I wouldn't buy it at any price. This company is waaaay outside your circle of competence.

 

oh, and its in yours.  Edited.

[Guest rimm_never_sleeps]

I never said their "dividend amount" was the reason for the decline. please if you plan to quote me do it correctly and precisely.