“… And Carry a Big Stick”

by,

Suzanne Coleman

Well good, Tim Cook finally acted.  As the CEO of a massive company, a big part of your job is managing your reputation.  Apple has historically done that quite well, especially with often overly-aggressive legal actions.  But in the last few months, they have sat passively by while their company has been defamed by “journalist” after “journalist.”  Manipulating public opinion by manipulating reports is sleazy, but since we as a society have lost most of our journalistic quality over the last few years, companies and individuals need to step up and act when necessary.

And let’s define necessary as when your investors are being destroyed due to false statements of fact meant to deliberately manipulate public opinion and therefore your stock price.  Yeah, let’s start with that.

I was going to call investor relations today (yes I own Apple stock, which you probably know by now) and have a conversation with them about this issue.  A nice class-action lawsuit brought by investors against reporters who spread falsehoods about Apple just might be what is needed to revive journalistic integrity.

I know, most of you have probably never heard of that…

_____________________

“Speak softly and carry a big stick.”  -Theodore Roosevelt, prior President of the United States of America

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Speechless

by,

Suzanne Coleman

Wow, Apple.  Wow everything.  What is going on here people?!  This stock market trading is insane.

First off, when you trade, you trade in pennies, not dollars, OK?  Geez, it’s like these people have no idea what they’re doing…

Yeah, let’s start with that.  I’m getting to be a broken record here, but, maybe before you buy or sell a stock you might want to GET A CLUE?  Since I own Apple, I’ll be focusing on that as a cornerstone for this conversation.

A good company’s stock doesn’t lose 30-40% of its value in a couple of weeks.  This isn’t Netflix or Amazon, the two stocks that continue to be super over-valued compared to their actual earnings, this is Apple, a proven stock with quickly growing earnings and a PE that is actually too LOW for its pre-drop price.

Now let’s play on people’s “reason” behind the recent decline, worries about the loss of income from sales in China.  Let’s say China literally falls off of the face of the earth, maybe the earth’s crust crumbles and the surface detaches and it just simply floats out to space.  Now, who knows, maybe they have cell service out there, I don’t know, but let’s just say, just for fun, that they don’t.  So if this happens, does Apple whither and die due to the loss of this entire market?  What do you think?

Yeah, you’re right, the answer is NO.

Would its growth suffer?  Yes, yes it would, but I must say, this is a ridiculous scenario because as far as I know, and yes I have personally checked this myself this morning, the earth’s crust under China is in fact, securely adhered to the globe.  So traders, you really don’t need to worry about China disappearing completely as a market today or any day in the next millennium or so.

So now, back to what most of us perceive to be reality.

China is in the predicted retraction phase, our world’s economies are almost all interconnected now, and those of you who didn’t realize this after our economy pulled back, well, I guess you’ll believe me now?  🙂  It’s all physics, the “ripple effect” created by the waves that we made earlier has reached China.  Recent published reports stated that their economy might only grow like 5-7% this year.  Wow, that is “terrible!”  Of course, it can get worse, they might actually stop growing.  Or even go into a recession like we recently did…  But they’re not there yet.  Their growth is decelerating (and has been for maybe 2-3 years).  During this period of time Apple has been consistently seeing INCREASED sales and profits coming from China.  So, maybe a little perspective will help stabilize this market?  I hope you’re paying attention people…  Maybe I need to be more blunt?  Apple will not collapse and die because of a contraction in China’s economy.  Yes, it’s possible they might not grow as quickly as they have been, but that’s expected in any new market, right?  Yes, right.

A little more perspective.  Apple continues to be in an expansion phase due to the overseas markets’ late adoption of its extremely popular cell phone products, and it continues to innovate, providing consumers products that they can’t live without.  This stock was fairly valued before this series of drops.  And now with a PE of 11- something, this high-growth stock which is backed by billions in cash, is a great bargain.  People who bought in today will be very happy they did, and hopefully very soon.

Compare this to Netflix, with a PE of around 200 recently (i.e., the price is way too high), which has had similar growth and management success in the last 2 years or so.  Their price is still flying high; I would have expected their price to drop way more than Apple, but logic doesn’t seem to be the reigning force in the market this year.

Apple deserves more stability than this people, let’s start trading with some respect.  12-month estimates average 146.88.  So that’s about 40% upside from the current price of $104.50.  Yes, people, that is VERY good.  Buy.

More Apple Insanity

by,

Suzanne Coleman

So Apple reported it’s quarterly earnings this afternoon, and guess what?  They again blew away expectations beating both gross and net income.  Their profit surged 38%.  But traders sold the stock and caused it to plummet the instant the results were reported.  Why?

Insanity, that’s why.  The only valid negative in their report so far (which actually came AFTER the drop) was that sales were DOWN in China.  Now this is important as China was a major income source.  We don’t know why sales are down there, nor what it portends for the future of the market all-around.  But even with this negative, Apple’s earnings and sales were outstanding.  iPhone sales were up 35% to 47.5 million phones.  This is the main profit contributor.

Other items increased as well, including services (I believe this includes Cloud and Apple Pay), and the “other” category where they have currently placed the new product the Apple Watch.  They also added later that the Watch brought in more than one BILLION dollars in sales this reported quarter.

In the future, this growing and ridiculously financially-stable company will continue to do well.  So again, why are people selling it?  These people are likely day- or hour- traders who jump in and out of stock positions and disrupt the market at times with their actions.  Long-holding owners and institutions would be wise to buy in now.  I believe that it will go back up.

Its stable price point over the last several months has been $125-126.  It will return to that level, or more likely, surpass it to at least $128-129.  Analyst estimates should again rise after this report, likely up to $160.  So, again, why are people selling?  I guess we’ll just have to wait and see what happens.  These are generally the same people buying into stocks with outrageous PEs and no profits.  Speculators is what they are called, and sometimes they do very well, but other times, they are wrong.

_________________

Yep, marketwatch.com (where I got the reported numbers above) just wrote that Piper Jaffray’s analyst Gene Munster raised estimates to $162.  4:29pm CST

Apple’s Next BIG NEW IDEA

by,

Suzanne Coleman

I’ve got the inside scoop for you here, don’t miss out.

I found out through my secret connections that Apple was looking to purchase a big piece of property that it could use to expand its business further into Europe and the Middle East.  They also wanted to find land and facilities that would be useful for company retreats and vacations.

When reviewing the current opportunities, executives considered location, size and what the property would offer to them and their thousands of employees.  They also looked at possible tax breaks and other tax implications.  They currently have billions of dollars stashed in Europe because of tax advantages.

I gave Tim Cook a call and told him about what I thought was the perfect solution.  It offered everything they wanted, a central location in Europe and the Middle East, with good access to Western Asia and Northern Africa as well.  It was available at a deep discount, but offered vast lands and a vacation-like atmosphere.

I told Tim Cook that Apple should buy Greece.

And he agreed.

Not only would this acquisition solve Apple’s current needs, but it would help stabilize Europe’s economy and the US stock market.  It would also give Apple a seat at the European Union’s policy-making sessions, and that’s never a bad idea for a company who is looking to expand their business into an area.

Of course all of this is currently fictional (in case you weren’t sure), but I think it really is the best solution all-around to the current Greece debt issues, and Apple could certainly afford to do it.

If you like my idea and decide to go ahead with it Tim, all I ask is a 10% commission and that you save me a nice house with a sunset-view.  Let me know.

New Apple Watch Apps for Industry, Pretty Cool

by,

Suzanne Coleman, MD

I just came across this article and thought it was pretty interesting:

http://finance.yahoo.com/news/apple-ibm-release-three-apps-130150745.html

It talks about a few new apps for the Apple Watch.  One is for nurses which allows them to receive important info on patients.  I think that is a great idea, if it works well.  This might remove the need for those bells that are often ignored, and do more to disrupt other patients than help the one in need.  Instead a tap on the wrist saying “Hello!  I need you” will alert the nursing staff to a patient’s needs.  And since there is a speaker, why wouldn’t they be able to speak to the patient directly via the Watch?  Pretty cool development.  If they work well, I can see financially-capable hospitals equipping their staff with these Watches.

Yahoo! Mail Insanity Continues

by,

Suzanne Coleman

Yesterday I had to log out of my Yahoo! e-mail account and when I logged back in, I was confused.  “What am I looking at?” I asked myself.  That wasn’t my Yahoo! mail!  I squinted, trying to make sense of it all.  I felt like I had suddenly developed cataracts and couldn’t see.

Without warning (as has become the standard with Yahoo!) their e-mail format has changed, once again.  They have now separated our e-mail for us, how “nice,” into the day, month, and who knows what else, that it was delivered.  Right there in our inbox.  So now, instead of a nice clear list of e-mails, there are different fonts and indentations all over the page, causing your eye to literally have to jump around to try and find something you need on the list.  It looks like gibberish.  It is not clear, organized or easy to follow.  And there is no way to fix it and go back to the old format.

With reportedly millions of users, why doesn’t Yahoo! consider their users’ interests and preferences?  I would.  At the very least, they should advise us of upcoming changes, and provide an option to keep things the way we have been using them for decades.  But I guess that would make sense, and their decisions over the last few years usually don’t.

During this time frame, Yahoo! mail has been an on-and-off nightmare of software programming dysfunction.  Every time it seems to be fixed, more problems occur.  These problems have made it so that it cannot be trusted to serve your needs in any reliable capacity.

Yahoo! did finally fix their home page news issues, but the months of problems before they did simply point to terrible management.  There is no other way to look at the repeated, serious failures on their part to provide products that work.

So why is Yahoo! such a poorly-run company?  I’m not sure why they make the decisions that they do, but I have read news reports that have described irrational rigidity of behavior as being an issue with the company’s leadership.

The obvious irony of it all is that if Yahoo!’s management actually used it’s own products, these problems would never have been allowed to continue in the way that they have.  That is of course, presuming that the management is mentally competent and cares about the quality of their business.  Whatever the underlying problems, those responsible for the poor quality of the software products should be replaced with people who are capable of managing their departments and their products successfully.

Maybe one day soon, when the stock is no longer a tech darling, there will be administrative changes that put the right people in the right positions to eliminate this type of bad management.  Until then, we will need to either learn to adapt to these problems, or find another provider for our online needs.

No one is buying Apple

by,

Suzanne Coleman

Thestreet.com reported today that Apple is in talks to bring Apple Pay to China, and part of their strategy is to work with Alibaba, China’s massive online store, similar to our Amazon.  But the stock hasn’t gone up in response to this news, why not?

Maybe it’s because everyone already thought this would happen.  That makes sense, since Apple is currently focused on expanding access for the Chinese to its products and services by opening many more stores in China.

It has been previously reported that Apple makes $0.10-0.15 PER Apple Pay transaction, that is a BIG deal.  With about 62 million current iPhone users in China*, this is a big future contributor to Apple’s bottom line.  If you guesstimated 30% of those iPhone owners used Apple Pay once every 2 days, you would end up with over $531,000 a day in revenue from Apple Pay in China alone.  And Apple is increasing the number of users there as we speak.  So, basically, it’s a big deal.  I have predicted that Apple will make major moves in the finance sector here:  [https://sliceiconic.com/2015/03/16/apples-future-domination-apple-watch-applebank-and-appleplay/].  We’ll see what happens.

Maybe Apple stock has been doing so poorly, relative to its actual performance as a BUSINESS, is because everyone/every institution who wants to own the stock, already does.  That would make sense.  Its price rises before earnings due to short-term buyers hoping to cash in on a quick up and down movement, and then it drops back down to almost where it was before earnings were reported.  I’ve written on this odd behavior of investors before, here: [https://sliceiconic.com/2015/01/27/reasonability/], where I discuss the reasonableness of PE ratios and investor behaviors.

What more is there to say?  Maybe the stock price hasn’t moved significantly because everybody is waiting to hear the numbers from the Apple Watch sales?  I don’t think that’s the case since most professionals have read the analysis which suggests that even if Watches are selling as expected, those sales won’t contribute significantly to the bottom line, for now.

I currently see Apple as “the new IBM.”  It’s become the “old stalwart” of the tech boom industry.  I guess 33-40% increases in profit year-over-year is a bit stale and dusty?  Right?

Anyone?

Bueller?

Its stock price barely moves in response to stellar quarterly reports on its performance, odd.  Am I the only one who thinks this way?  Oh, no, wait, I’m not.  There is that famous guy, what’s his name?  Carl Icahn.  Yeah… maybe we’ve both got it wrong.  🙂

________________________________

NOTE:  This writer owns shares of Apple stock though she’s not really sure why anymore…

________________________________

*Based on estimates of 520 million smartphone users and a 12% market share as reported by cnet.com here:  http://www.cnet.com/news/china-likely-to-top-us-for-apple-iphone-sales/

Apple’s Earnings are out, and they’re good

by

Suzanne Coleman

According to thestreet.com’s live blog (which was the first to release the numbers this afternoon), Apple reported the following for its second quarter earnings:

earnings:  $2.33/share

revenue:  $58 billion

Sales, in millions:

iPhones   61.2

Macs  4.6

iPad  12.9

Watch not reported

Capital return program increased to $200 billion which increases the dividend to 52 cents per share.

The earnings, revenue and capital return program all beat expectations.  Earnings were expected to be $2.16 and revenue $56.06 billion.

Apple was up to $135 or so after the report and has pulled back slightly now to 134.40.

iPhone sales were 40% over last year’s sales per Brandon Bailey at AP.  Last quarter was also a 40% increase in sales, overall.  So that would put the stock on track to be currently priced at around $137 per share.

The Apple Fail

by,

Suzanne Coleman

[Ok, I wrote this about a week or so ago, when they reported the delays in delivery for the Apple Watch, but since I didn’t publish it, I’m doing it today.  The analysis is still relevant.  Only time will tell if this new product release method that Apple employed will work or not, though I’m thinking it certainly isn’t be the ideal way to do things.]

I’ve got to say, when you pay someone 75 some million dollars because they’re “Just so awesome” to get them to come to your company and work, you’d probably think they wouln’t completely f@%* up your business, wouldn’t you?  Well, that’s what is happening now, or so it seems.

It’s the Apple Fail, not the Apple Watch.

Telling your customers that your BIG NEW PRODUCT is going to be available on April 24th, and then failing to have product available?  Wow, that’s the kind of company that quietly disappears from the news as it goes out of business.  That is such a huge strategic FAIL I don’t know what to say.

Not only do they not have product available for sale, they are telling people who already paid for the product that they will have to wait MONTHS to get it!  WHAT?!@  Omg, Apple, I am so not happy.

And during the run-up campaign to the release for the Apple Watch, having major news outlets telling the public that the watch CANNOT BE PURCHASED in the store?  Seriously?  Who’s in charge there?  I mean, I caught the error, nobody at Apple did?  Hmm…  Obviously people who went into the stores WERE able to buy it online while in the stores.  How many didn’t even bother going because they weren’t interested in being jerked around?  Yeah, I wonder.  The kind of people who might pay $10,000 for a device, that’s the kind of people who aren’t really into being jerked around, and probably a few others as well.

And now they are saying that deliveries might not have such huge delays after all.  What to believe?  Like Taylor Swift said: “This is exhausting.”

I know they have pulled this availability manipulation before, and it didn’t destroy the company, so maybe people find it attractive and charming, kind of like playing hard to get?   But that kind of selfish, manipulative behavior generally tends to push people away…

 

NOTE:  I own Apple stock, and I expect the same thing from them that I do from any company that I work with/interact with:  quality customer service, ethics, reliability, responsibility, quality products, etc.

After their stock’s performance this quarter, I’m not sure I’ll still be adding this note to my posts… see Amazon, Netflix, YY, Starbucks, Qihoo, Tesla…

Apple Watch, New Ads, Nicely Done

By,

Suzanne Coleman

Just found this article:

http://fortune.com/2015/04/24/hats-off-to-angela-ahrendts/?xid=yahoo_fortune

where you can watch the three new Apple Watch ads.  It’s funny because just last night I was thinking they needed to do ads with a human experience aspect, and voila, there they are!  Nicely done, too.

After I watched the last one, I said to myself, I need that watch!  Seriously.

NOTE:  I own Apple stock, but this wasn’t biased by that.

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