like all things trading, timing isn’t as important as the trend.
You’re right, blowout sales of the iPhone 6 are a great downtrend. Margins are probably going to be higher, esp as many will choose the 32 GB models…
^ Revenue growth is slowing, margins are declining. These are facts.
No kidding, this is the world’s largest company, growth will not be where it was 10 years ago. These guys made what, 50 B in FCF this year? That’s as much as Intel, Oracle, IBM, and Cisco put together if not more. They returned 19.5B to shareholders this quarter.
They better keep it up or lose my bet with your boy FrankieA.
AAPL vs TEVA 10 year earnings growth. We’re in year 3 and I think I’m winning.
I have no real strong opinion on Apple, but the thing with it’s “cash flow” is that its not really cash flow. All of the cash ends up stuck in a foreign subsidiary and sits on the sidelines (for years now) earning 600-700 bps less than the company’s cost of capital (~8%). The good thing about cash is you can do things with it (acquisitions, capex, share repurchases, dividends) – this “cash” is trapped and has limited use, apparently. At 6/28/14, AAPL had $138B in cash held by foreign subs with $27B held domestically. Bring that cash to the U.S. and you’ll get a big tax hit (EBAY did this earlier this year and quickly turned $9B into $6B). Or you could just pay your U.S. taxes upfront, but it’ll lower your EPS.
Don’t get me wrong, Apple is a great company and I’d never short it for this reason. I just can’t help but look at the cash flow statement and want to make material adjustments b/c they really aren’t generating as much true liquidity as their financial statements show. Apple is returning cash back to shareholders, but they are using proceeds from the issuance of debt to finance much of it!
Apple isn’t the only company with billions of cash held by foreign subsidiaries. I guess these companies are just waiting for a change in tax policy, but that could be YEARS away (if ever).
^ Or, the tax situation could become even worse. This liability is a problem, though I don’t know if its a huge one.
I think Apple is a fine company that has a loyal customer base. But I agree with MLA – I don’t think smart phones are going to be the thing forever. I just don’t see an Iphone having staying power. The question in terms of investments is how long will their customers act as an annuity, as it was recently put. I don’t know that, and that’s mostly the reason I don’t invest in tech to begin with. Change is sudden and rapid.
Just walked around school on my class break. 95% of Students have macs
Sorry but this seems out of touch with reality in so many ways.
Once again, everyone in ASIA. Hello?? Drink some coffee dude.
I need more than coffee, i am exhausted. Anyway, i firmly believe (as with their american counter parts) asians will order said larger iphone and realize its not an easily mobile device. Thus, i would start to trim back on aapl products monday and perhaps hedge with producers of Murses.
^asians also love accessories. Murses are a good hedge.
AAPL is so popular that MSFT is growing revenues faster than it.
Why shouldn’t MSFT grow faster than Apple? Have you ever opened up a 10K of either company?
You’re a value investor, right? I’m just curious how any value investor invests in tech companies – it just seems like they have fat tails in terms of disruption. I can never get into a mindset to invest in it. Just changes way tpo fast and very technical to understand. It’s just a few years ago RAZR was the phone of the future ha ha
Obviously this has already been tested in Asia, and they were found to be a perfectly acceptable size. Was out drinking sake last night, everyone had their biggie phone. Apple is taking no risks here, the demand is known.
On an unrelated topic, when will AF get spell check technology? It’s 2014, I thought every forum software had that…
Does it make you upset Palantir that big box retailers are boycotting Apple Pay due to the fees and planning to offer their own service instead?
Nah, they’re going out of business soon enough anyways.
I forget you can’t engage in a rational conversation with fanboys