Apple Stock Dives, but do you know Why?

by,

Suzanne Coleman

Apple stock (AAPL) is down 3.66% as I write this story.  Not good.  Is this because Apple sold a record number of its new iPhone model this past weekend?  No, that’s not it.  Is it because Apple is coming out with a free software upgrade for its computer users?  No, I doubt it.  But, I think I know what it is.

I own Apple stock (let’s question why another time…) and I just received a margin call on this equity.  E-Trade raised its capital requirements SIGNIFICANTLY and the call is due on Thursday.  Previously requirements were only 30% equity, they raised it to 45%.

As the stock fell yesterday, people are likely selling to cover their margin requirements today.  I could call around and see if other brokers have also raised their requirements, but since this is an unpaid gig, you’ll just have to include that as a likely possibility based on the stock’s recently unstable and unpredictable performance, with no underlying logic.  I wouldn’t throw my money at it without securing it either, at this point.  The company is good, but it could be better in many aspects, but that’s America today.  It’s one of the best though and I repeat myself yet again, there’s no logical reason for this drop in price.

In fact, today another analyst has started coverage with a 12-month price expectation at $150.  The average is now an expected $145.77 per Yahoo! charts.  With a PE of 12.51, that’s pretty good.  Exclude all the lofty dreams of google glass (oh wait, different company…), a magical Apple iCar, Apple streaming TV service, etc., this company still outperforms most businesses today.

Advertisements

Apple To Buy Netflix?

by,

Suzanne Coleman

I think the best next move is for Apple to buy Netflix.  Why not?  What do you think?  Maybe we’ll find out more tomorrow…

Apple Beat Expectations for iPhone

By,

Suzanne Coleman, MD

Ok, so let’s review this one more time.  I am tired of the manipulations and lies.  In the most recently-ended quarter Apple BEAT expectations for the iPhone sales.  Many bloggers/”journalists” are saying that they missed, and that everyone should bail out of Apple (wow, great analysis, based on literally, nothing).  No, they beat.  No one even mentions that their “miss” is actually based on hyper-inflated dream-idealogy numbers, not analysts’ consensus expectations.

So there you have it folks, something I like to call “the facts.”  Beware of what you read on other blogs, or even “news” outlets.  There are many people/organizations out there who have some kind of issues with Apple doing well, and are doing whatever they can to destroy it.  In medicine, we call those people psychopaths.

By the way, if you are investing based on what people are writing about stocks, you need to do some more homework, and get your information from several sources.  That way it will be closer to fair and balanced information, which is always the best for you and your portfolio.

_______________________________

Yes, I still own Apple stock.

“… 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

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.

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/

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…

%d bloggers like this: