Myth465 Posted January 22, 2011 Share Posted January 22, 2011 The thing that got me was, if you think buybacks are stupid then why do you own at that level. Link to comment Share on other sites More sharing options...
given2invest Posted January 22, 2011 Share Posted January 22, 2011 The thing that got me was, if you think buybacks are stupid then why do you own at that level. That's basically my point all along. Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 23, 2011 Share Posted January 23, 2011 Apple still has some uses for its cash: - Ensuring production capacity- http://www.asymco.com/2011/01/23/the-bank-of-apple-using-capital-to-ensure-additional-capacity-and-supply/ - Acquisitions - They built one of the largest data centers in the world in North Carolina. Possibly need additional capex - There are a number of lawsuits pending that may require large payments Link to comment Share on other sites More sharing options...
S2S Posted January 27, 2011 Share Posted January 27, 2011 Great discussion. NYU professor Damodaran recently posted his thought on the topic. I copied and pasted his conclusion below, but to find out his (very well thought-out, IMHO) reasoning, do read the full article: http://aswathdamodaran.blogspot.com/2011/01/buybacks-and-stock-prices.html ... here is what I would expect to see in response to a stock buyback: The most positive impact on stock prices should be at mature firms that have a history of earning poor returns on operating assets and are under levered. You get a triple whammy at these firms: the market probably is discounting cash at these firms because it does not trust the management, the firm is under levered and there is little likelihood of the buyback being viewed as a negative signal (since expectations for growth were low to begin with). The most negative impact on stock prices will be at high growth firms with a history of generating high returns on operating assets and little debt capacity. Cash at these firms is unlikely to be discounted (and may be even be viewed as a strategic asset), there is little potential for value gain from financial leverage and the buyback is more likely to be viewed as a negative signal about future growth potential. In my earlier post on Apple, this is why I argued against a buyback. Apple meets two of the three criteria for the second group: superb returns on operating assets and perceptions that there is still growth potential. It is true that Apple has some debt capacity (though its effect on value is muted). The debate about whether and when Apple should use this debt capacity is a good one to have, but I think that the argument for using debt right now is weak. That will change, as the debt capacity continues to grow, and returns on operating assets weaken (as they inevitably will). Link to comment Share on other sites More sharing options...
given2invest Posted January 27, 2011 Share Posted January 27, 2011 Apple can't deploy its 60b in cash let alone its "debt" capacity which is probably another 50b if they needed it. It is self funding generating billions in excess cash a month. Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 Myth - to your point above - I would have gladly invested in BRK as a $30 million company (of course in hindsight) knowing that Buffett wouldn't do buybacks (into a shitty textile business) but instead to the best sources. So the question of whether or not to own a stock isn't measured by the willingness of the buyback, but rather the capital allocation. If a buyback is good (and I'll cave on this for now) b/c the stock is trading much below IV, so be it. If the buyback is bad (like my company right now, like SHLD in the 100's, like GS in the 200's, like MSFT in the 30's, etc) then it is bad. I am not really saying this right but my point is I can own a stock and not want a buyback (BRK is best example and impossible to argue IMO). And with tax deferred accounts, a dividend is great. Fantastic and much better than a buyback. And please, no more with the synthetic buyback comments...I will vomit on the spot. Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 A side point - if Jobs never returns to Apple (draw your own conclusions) - what is your purchase price for AAPL? I am going with $280, maybe $300. Good weekend to all. And let's go Flyers (best team in sports???) Link to comment Share on other sites More sharing options...
Liberty Posted July 19, 2011 Share Posted July 19, 2011 Very smart of AAPL if true: http://alexblom.com/blog/2011/07/forget-acquisitions-apple-control-the-supply-lines/ Put simply, new components are not cheap. The upfront capital requirement to build manufacturing plans is huge, and the margins shrink so quickly as technology moves that manufacturers cannot raise capital. According to the anonymous responder, Apple pay a significant portion of the factory construction cost in exchange for exclusive rights to the output for a set period of time, and then for a discount once this period expires. Not only does this allow Apple to come out with new components long before rivals, but these components are impossible to duplicate (think of how long Apple had the touch screen monopoly for). By the time competitors catch up on component production, Apples lower cost period is in play. That means that every time a competitor buys a component, they are potentially overpaying so that the factory can subsidize Apples discount. Link to comment Share on other sites More sharing options...
DCG Posted July 19, 2011 Share Posted July 19, 2011 Another incredible quarter from Apple. Link to comment Share on other sites More sharing options...
Liberty Posted July 19, 2011 Share Posted July 19, 2011 Very impressive indeed: http://blogs.wsj.com/marketbeat/2011/07/19/apple-earnings-a-big-beat/?mod=e2tw Link to comment Share on other sites More sharing options...
Parsad Posted July 19, 2011 Share Posted July 19, 2011 Just nuts! What a quarter...what a nine months! Cheers! Link to comment Share on other sites More sharing options...
given2invest Posted July 19, 2011 Share Posted July 19, 2011 What a company. Link to comment Share on other sites More sharing options...
DCG Posted July 19, 2011 Share Posted July 19, 2011 cash and securities is up to $76 billion. Link to comment Share on other sites More sharing options...
Parsad Posted July 19, 2011 Share Posted July 19, 2011 And of course, the stock sells off in after hours trading! Cheers! Link to comment Share on other sites More sharing options...
Liberty Posted July 19, 2011 Share Posted July 19, 2011 And of course, the stock sells off in after hours trading! Cheers! You see it down? I see it up 5.7% on Google Finance. Link to comment Share on other sites More sharing options...
Guest valueInv Posted July 19, 2011 Share Posted July 19, 2011 This was a quarter where they had supply constraints due to Japan. And delays in launching the iPhone 5. Link to comment Share on other sites More sharing options...
DCG Posted July 19, 2011 Share Posted July 19, 2011 And of course, the stock sells off in after hours trading! Cheers! It went us to $405 US before pulling back a bit. Trading was halted around the time of the earnings release (it was down a bit after hours before being haulted) but has been up since trading resumed. Link to comment Share on other sites More sharing options...
Parsad Posted July 19, 2011 Share Posted July 19, 2011 Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20. Cheers! Link to comment Share on other sites More sharing options...
DCG Posted July 19, 2011 Share Posted July 19, 2011 Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20. Cheers! Yahoo Finance is buggy. I trust Google Finance much more. Link to comment Share on other sites More sharing options...
Liberty Posted July 19, 2011 Share Posted July 19, 2011 Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20. Cheers! Yahoo Finance is buggy. I trust Google Finance much more. I like the "key statistics" page on Yahoo finance, but for everything else I prefer Google Finance. Link to comment Share on other sites More sharing options...
DCG Posted July 19, 2011 Share Posted July 19, 2011 Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20. Cheers! Yahoo Finance is buggy. I trust Google Finance much more. I like the "key statistics" page on Yahoo finance, but for everything else I prefer Google Finance. Agreed. If it weren't for the Key Statistics page I'd never check Yahoo. Link to comment Share on other sites More sharing options...
Liberty Posted July 20, 2011 Share Posted July 20, 2011 Agreed. If it weren't for the Key Statistics page I'd never check Yahoo. Ha! I'm exactly the same. Time to send a suggestion email to the Google guys.. Link to comment Share on other sites More sharing options...
jjsto Posted July 20, 2011 Share Posted July 20, 2011 Yeah, if you take away ipad supply constraints and add in back-to-school sales, holiday sales, refreshed mac mini/macbook/mac airs, cloud computing, Lion, and the release of iPhone 5...the next 2 quarters have the potential to be kinda nuts. If you just take this quarters earnings, multiply it by 4, and subtract the cash off the balance sheet apple appears pretty cheap even if sales "just" remain flat in the future. It seems like the only product they are selling less of is the iPod. I would sure like to see international sales broken out by countries. It seems like they are still barely scratching the surface in some areas like China, India, etc. I live in Argentina, and the iphone4 has been sold out for months, you cant get an ipad2. Apparently it is the same in Brazil. Link to comment Share on other sites More sharing options...
tombgrt Posted July 20, 2011 Share Posted July 20, 2011 Even after the bounce $315, it looks undervalued at current numbers. What is the market discounting? Its size? Cash position? Steve Jobs' health? Probably a combination. Link to comment Share on other sites More sharing options...
DCG Posted July 20, 2011 Share Posted July 20, 2011 Their cash flow from this quarter alone is almost enough to buy RIM and shut the company down and convert the Waterloo headquarters into a giant Apple Store. :P Link to comment Share on other sites More sharing options...
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