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Apple Reports Record March Quarter Results, Splits Stock 7-for-1, and Boosts Share Buyback
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That blog misstated what Mr. Maestri said during the conference call. What he actually said was that they had 15.4 million iPhones in channel inventory at the end of the quarter - not in China, but in total. That was about 100,000 more than they had ended the previous quarter with. So the sell-through number for iPhones was about 100,000 less than the reported iPhones number (or about 43.6 million iPhones) for this quarter.
LOL. Get out of here with that! No one compares quarter over quarter, not even the most annoying analysts out there. There's a reason it's year over year. Last holiday quarter was their most successful. Don't expect it to be surpassed until next holiday quarter (Q1 2015).
Spoiler alert: next quarter will be worse than what was just announced today. The third quarter is always the lowest sales. But hopefully better than a year ago. Year over year
The transcripts aren't up yet, but didn't Apple say that China smartphone sales were up 28%?
If they meant year over year, then with last year's quarterly China sales at 6.1 million, that would only indicate 7.8 million iPhones sold this quarter.
That's a lot less than Xiaomi, who announced 11 million sales, and would drop Apple back into sixth place again.
It would also back up the analysts saying that China iPhone sales have tanked while waiting for the rumored larger screen model(s).
Again, assuming YoY. Anyone know?
Please look up what fascism means and what its origin is.
Companies go private on a regular basis for a variety of reasons, but none of those have anything to do with fascism.
If you think the shares will rise between now and then you'd be better off buying one single share now than 7 in two months time. If you don't think they will rise you shouldn't buy anyway.
Also, you should consider that, if you'll be more inclined to buy at 75 than 550, so might others in which case the price will rise in which case you should buy now to get in ahead of the rise. Perhaps for example there will be a bunch of people like you waiting to buy when it's 75 so buy ahead of that as the price will inevitable rise if there are enough with that thinking.
Personally, if I was going to buy Apple now, Id wait few days because often after a sharp little rise like this you'll find a drop back. But no money back if I'm wrong
I didn't catch that, but from memory I think he said something about App Store sales in China doubling (?or thereabouts) over the last year, then some great progression stats from Vietnam, Russia, and Brazil.
For those holding shares (or thinking of buying/selling them) wondering about the stock split - it makes no difference to your wealth. The only difference it could make is if your broker charged per share for transaction costs or a holding fee (most don't), but the difference would be very small.
So, using hypothetical prices, if the day before the stock-split you held 100 shares at $560 with a quarterly dividend of $3.5 per share, you would have $56,000 of stock and receive a quarterly div of $350.
After the stock split you would still have $56,000 of stock and still receive $350 quarterly in dividends, but you would now have 700 shares, each share worth $80, and the div would be $0.5 per share.
The practical differences seem to me to be that
1. you can now buy in smaller chunks than $560. Mostly useful for automated investment plans or dividend reinvestment plans. Also fun gifts of one share for the grandkids.
2. Apple is a prime candidate for entering the (price-weighted) Dow now, if and when a space next becomes available.
3. brokers and exchanges that charge per share (not necessarily retail brokers) will make a ton more money. options houses (which do charge per option) will make a ton more money.
4. Apple mini options would seem to be no longer necessary. And to the extent that traders were unwilling or unable to use mini options, there should now be increased options activity on Apple, because before you had to trade in $55,000 chunks of the underlying. Sophisticated 'Mom and Pop' investors can now write covered calls on $10,000 of shares.
5. options pricing may be a bit weird and difficult to calculate for a while
6. financial sites and TV stations will write and broadcast reams of articles about what stock-splits mean for you, and sell plenty of accompanying ads. Stats will be produced to show whether stocks have historically gone up or gone down after a stock-split. Much will be made of the "psychological effect".
My advice: hold the shares, they're going higher. They have a very attractive valuation - very low p.e minus cash. Decent growth of about 5-10% of revenue and earnings a year. Astronomically large absolute revenues and earnings. Great track history of management, sales, r&d and design teams. And still very negative sentiment, which is good for value investors. That means, very roughly, if you hold the shares for ten years and the company doesn't even grow at all, which would be surprising IMNSHO given all the potential growth in emerging markets, the company will still produce as much cash as the price of the share. That's net real money in the bank after all expenses and investments. So basically as an owner, after 10 years, you will probably have the shares plus the same amount in cash - so you will have doubled your investment. The main threats are margin compression and commoditisation of phones. But I'm still spending a lot on computers and gadgets, 25 years after my first computer. In fact even though they're a bit cheaper now I'm buying a lot more of them when adding together all software and devices, and Apple's margins are as good as ever. So for the next 10 years I'm not too worried about margins or the "demise of the ipad". The stock-split is irrelevant, and I trust Apple to produce the right product mix at the right times, while safe-guarding my investment. This is no longer a go-go stock but seems fairly low risk for the medium term.
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I think you know funds exist to make their owner's money. Dow ETFs wouldn't exist (and they do) if they didn't make a profit; i.e., people were buying them. And why is your personal experience, not factual data, always the final arbiter of whether a product is beneficial and/or viable. I think we had a similar conversation regarding Office for iOS.
I've no particular interest in it as a sign of market health, but there are index funds that try to track it. Once Apple gets put into the Dow (which is a given, right?), those funds will have to buy a lot of Apple. Then they have to hold that Apple stock as long as Apple is in the Dow. That alone will boost the stock. Though this boost should be priced into the stock within about five minutes of opening today, so you won't see a boost later.
Actual transcript
http://finance.yahoo.com/news/apples-ceo-discusses-f2q2014-results-003308794.html
15.4 million was the total iPhone channel inventory, not just China. An increase of 100,000 units from the December quarter.
Now you can be sure that sales were that good!
In fairness, 15.4 million in China is what that blog reported. But, contextually, no, that wouldn't have made much sense.
In fairness to the blog, Mr. Maestri does have a significant accent and - now that I've listened to the statement again - I can see where someone might initially think that he said China inventory rather than channel inventory. However, if whoever was writing that blog was familiar with the situation - e.g., Apple's operations, their sales numbers generally, how they refer to certain things, etc. - then they probably should have realized that the number was for total channel inventory rather than just the inventory in China.
I don't think so.
But they did do $9.3 billion in revenue in Greater China, up 5% sequentially and 13% YoY. So we might be able to ballpark it from there, but we wouldn't be able to get a very precise (accurate) number.
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Not really. Individual investors represent such a small percentage of the market they have essentially no impact on price. There is a big debate as to whether stock splits have a benefit that exceeds the cost of issuing new shares. Most research says it does not.
There are some obscure Dow ETFs, but how much of the market for these stock do the funds represent? If it's tiny, they won't have a material impact on the stock price. Dow is a crazy index to invest in-- even if you like the specific stocks in the Dow (as in the old chestnut "Dogs of the Dow" approach), the index is not weighted by market cap. It's a joke to classify buying a Dow ETF as index-based investing. I find it hard to believe there is serious money in these.
BTW, all funds exist to make the fund managers money, not the "owner's". The good ones do this by making the funds attractive enough to draw investors.
Funds exist to make money for their sellers. They really don't care that much about the people who buy them. They are mainly interested in collecting the management fees, often as much as 2% of asset value.
Funds are products. Like any other product, some are a lot better than others but a great many investors have difficulty not only distinguishing the good from the bad but also knowing how much the funds are raking off as management fees. This is a huge issue that has received an awful lot of attention recently. I must assume that you have never heard about it. Not my fault.
As for ETFs, I highly recommend them, because the management fees are substantially lower than for managed funds, and this alone can make a huge difference in returns over time. They also allow the investor to diversify properly. What I am saying here is I have never heard of a diversified investment strategy that includes a DJIA index fund. But I am sure must have if you are making this point, and will provides some evidence for this.
Well again, I don't see a lot of interest in DJIA index funds, if only because such a narrowly focused fund would defeat the purpose of investing in index funds. Getting into the S&P 500 is a lot more significant, but of course AAPL has been there for a long time, as well as being the top holding in QQQ.
Do you think it's a given that AAPL goes into the DJIA? At some point, I suppose it could happen, once the committee decides to realign the index. But even so, this to me just illustrates the arbitrary nature of the index. It might have meant something before the advent of composite indexes, but what does this antique index mean today? That's my question.
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Exactly. A more general point is that out of the thousands of managed funds, few perform better than the broader indexes, and yet the managers rake off huge profits in the form of management fees. These funds don't go out of business because most investors in these funds don't understand how much they are costing them. The advent of the 401k made this problem even worse, as employers are signing their employees up for managed funds that return poorly.