November 29, 2013


We mentioned a couple of days ago that AAPL stock was approaching a high for the year, and it has now broken the $549.02 at which it began the year.

The company has experienced a roller-coaster ride in its stock price, almost entirely divorced from any product-based reality. The value placed on the company by the market at any given time has more to do with the gap between rumors and product launches, and of course short-term speculation …  expand full story

November 27, 2013

November 20, 2013

November 15, 2013

October 28, 2013


Update: The analysts were right to be optimistic, but not optimistic enough

As we wait for Apple to announce its Q4 results in this afternoon’s earnings call, more than half of the analysts included in Fortune’s survey expect the company to beat its high-end guidance of $37B. The average is driven up by the amateurs, who come in at $37.38B, while the professionals expect just a touch under the top end at $36.95B.

Predictions on both revenues and earnings do vary markedly, however. While the consensus view is that year-on-year revenues will be up 3 percent and earnings down 6 percent, even among the professionals the earnings estimates span a 15 percent range.

Top: FBN’s Shelby Seyrafi: $39.18 billion (up 9% year over year)
Bottom: Cantor Fitzgerald’s Brian White: $34.57 billion (down 4%)

Apple beating its own guidance wouldn’t have been remarkable in the days when Apple gave absurdly pessimistic guidance and then blew it away, but would be impressive since Cook started offering realistic ranges …  expand full story

October 23, 2013

October 16, 2013

October 2, 2013

September 23, 2013


AAPL quickly climbed 6 percent in pre-market trading following Apple’s announcement that it had sold a record 9M iphones in the first weekend, beating most analyst expectations. The last time it hit $500 was six weeks ago, when Carl Icahn announced his increased stake in the company, believed to be in excess of $1.5B.

Analyst forecasts for sales of the new iPhones had ranged wildly from 5M to 10M, but 9M was at the high end of what most were expecting and substantially above the more pessimistic forecasts. Four major financial firms had seemed unimpressed by the announcement on 10th September, downgrading the stock.

Apple’s SEC filing advised investors that it expects to hit the high-end of its earlier Q4 guidance …  expand full story

September 11, 2013

September 9, 2013

August 14, 2013


Following comments from billionaire investor Carl Icahn that he had taken a “large position” in Apple and discussed a larger buyback with Apple CEO Tim Cook, Apple’s stock experienced a new six-month high of over $488 per share. Today, AAPL continues to climb and has passed the $500 mark for the first time in nearly eight months since January 23rd.

In an interview with The Wall Street Journal yesterday, Icahn noted that he expects Apple shares will soon rise above $600 and explained his proposal for increasing the stock buyback:

“This is a no-brainer to go buy stock in a company that can go borrow” at a low rate, Mr. Icahn said in an interview. “Buy the company here and even without earnings growth, we think it ought to be worth $625,” he said, referring to the stock price, which closed Tuesday at $489.57, having risen 5% on the news of Mr. Icahn’s investment.

Mr. Icahn’s thesis rests on Apple borrowing at about a 3% interest rate and buying back shares right now, likely at around $525 a piece. A stock buyback can increase earnings per share by reducing the number of shares outstanding.

While Icahn didn’t provide any financial details, WSJ adds that sources say his stake in Apple is now worth over $1.5 billion. expand full story

August 13, 2013

August 5, 2013

July 25, 2013



Fortune reports that Apple’s stock repurchase scheme – buying back some of its own shares – is proceeding more than three times faster than scheduled.

The company was scheduled to repurchase 10 million shares in Q3. It bought 36 million […] By my calculation, the company spent $16 billion last quarter ($4 billion in cash, $12 billion through the so-called accelerated share repurchase program) to purchase 36 million of its own shares at an average price of just over $444.

If Fortune‘s numbers are correct, then Apple has already spent almost all of the $17B it borrowed back in April. Accelerating the planned repurchase program makes sense if you expect the stock to cost less now than it will later. In other words, if you’re expecting the stock price to climb …  expand full story

July 23, 2013


With Apple’s Q3 earnings call starting at 2pm PT/5pm ET today (which we’ll be covering live, of course), Fortune has posted the results of its usual quarterly survey of analyst predictions.

The executive summary is that the analysts are pessimistic, though in line with Apple’s guidance.

Earnings [per share] estimates are down across the board — anywhere from -7% year over year  (according to independent Patrick Smellie from the Braeburn Group) to -29% (Susquehanna’s Chris Caso) …  expand full story

June 24, 2013

April 26, 2013


Washington Post columnist Allan Sloan observes that Apple’s plan to buy back $60b of its own stock will reduce the company’s tax bill by more than the cost of the loans it will take out to fund the share repurchase program.

If you’re wondering why a company with a cash balance of $145b would need to borrow $60b, it’s all about tax … expand full story

April 24, 2013


An insightful Reuters blog by financial journalist Felix Salmon suggests that Apple’s surprisingly low share price may be due to the evolving nature of the company leaving it between two sets of investors.

Conservative investors, who like slow-growing stocks with high dividends, are constitutionally uncomfortable with the volatility inherent in the tech world. And technology investors, who are happy taking that kind of risk, want to see substantial growth. Apple, notwithstanding the fact that it’s one of the most valuable companies in the world, is falling through the capital-markets cracks.

Apple always used to be the company which surprised and delighted investors and customers alike. Its guidance to investors was deliberately pessimistic, blowing through those figures when it reported actual revenue and earnings. It was notoriously secretive about new products, launching new ones in a playful manner with Steve Jobs’ famous ‘One more thing‘ moments… expand full story

April 23, 2013

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