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Apple to Host Conference Call Monday Concerning its Near $100 Billion Cash Balance
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Although I totally agree the valuations aren't extreme just to play devils advocate for a minute. First of all forward PE ex cash is more like 10.5 now after run up. Second, those are of course earnings estimates, they could be a lot more could be a lot less. Third a lot of tech stocks (higher cap ones at least) command a lower PE ratio because technology moves so fast compared to a company like PG with IIRC around a 20 PE; because look at Microsoft it was thought of as unstoppable when it had around a $600 billion market cap. I am also aware the MSFT had a MUCH higher PE at the time but since the .com bubble people have been WAY more wary of valuations.
Lastly with a market cap this huge there starts to be less and less who are able to buy it, that's another reason I think a dividend could unlock value by income investors and funds swarming in. I also think although it SHOULDN'T make a difference a stock split WOULD bring buyers in. I know 5 people that said they would buy it if a split occurred even after I explained it shouldn't make a difference they said they still would. Heck I would even buy more just so I could write covered calls on the stock or a protective put without having to own almost $60,000 worth of stock.
Why do people want Apple to bring manufacturing back over here? I don't know about you, but I don't want to work a repetitive, low paying factory job. The thing I don't understand is why they can't make a completely robotic assembly line for their products.
I think 3N16MA was echoing Michael Dell's infamous quote that if he were CEO of Apple, he would "shut it down and give the money back to the shareholders".
For me, the current screen size of the iPhone is just too small. I do a lots of emails and messaging on the go. And typing on the iPhone keyboard doesn't feel comfortable and I did hit the wrong button all the time when I had it. A major issue for me.
Why not having two models? A 3.5" and a 4.5" version and everybody is happy.. Well, most of us anyway...
Don't know why it hasn't been suggested yet Expand Apple U into a real private University. Global online Uni, they already have the Business school half operational. The guys from low level teams, such as well, LLVM would kick off the research wings of the technology schools.
Get there pick of Grads to expand design and implementation teams. Get the pick of new ideas that can be tested and fostered in that sort of environment, again like LLVM.
They could built the host school on the current campus site.
Get there pick of Grads to expand design and implementation teams. Get the pick of new ideas that can be tested and fostered in that sort of environment, again like LLVM.
They could built the host school on the current campus site.
I don't think that Apple really likes to buy things unless it is something they really need, that is a tech leader, has smart people, and is small enough to be "apple-ized" fairly easily.
I think that they are much more adept at MAKING things. In that realm, I think they have two targets for improvement - everyday things that are crappy and are poorly executed; and stuff that is game-changing about how we think and do things.
The iPhone took some really great ideas and made them happen in one terrific unit - but Apple hardly invented anything there, except for taking crappy everyday phones and delivering an exceptional user experience. The iPad was never anything anyone begged for - until about a week after it hit the stores, and it hasn't been in stock since then.
No, I think Apple will announce something pretty spectacular, with one foot in the familiar and the other planted squarely in the direction that we ought to be moving as a people. Maybe an advanced technological answer to a baffling everyday problem.
Tim Cook is his own man, but that cash hoard is Steve's legacy - and Tim Cook isn't the type to do something stupid with a legacy. This will be something to remember.
I think that they are much more adept at MAKING things. In that realm, I think they have two targets for improvement - everyday things that are crappy and are poorly executed; and stuff that is game-changing about how we think and do things.
The iPhone took some really great ideas and made them happen in one terrific unit - but Apple hardly invented anything there, except for taking crappy everyday phones and delivering an exceptional user experience. The iPad was never anything anyone begged for - until about a week after it hit the stores, and it hasn't been in stock since then.
No, I think Apple will announce something pretty spectacular, with one foot in the familiar and the other planted squarely in the direction that we ought to be moving as a people. Maybe an advanced technological answer to a baffling everyday problem.
Tim Cook is his own man, but that cash hoard is Steve's legacy - and Tim Cook isn't the type to do something stupid with a legacy. This will be something to remember.
Here's the downside. That cash horde doesn't make itself bigger. At best, that cash can earn maybe 1% per year. Money market yields are cr@p these days. If the market decides that Apple is never going to use their cash horde for investing in future growth, then it will just figure that 15-20% of Apple's stock price is fallow and will assign an even lower price/earnings multiple going forward. Too much cash in a company dilutes the earnings power of the company as seen from a stockholder perspective.
Thus Apple needs any combination of one or more of the following (1) declare a regular, recurring dividend, (2) declare a special dividend, (3) announce a share buy-back, or (4) announce major new investment.
CNBC is reporting that Apple will announce a 2.5% annual dividend (that would be a little bit less than $4 per quarter right now):
http://www.cnbc.com/id/46779100?__source=yahoo|headline|quote|text|&par=yahoo
http://www.cnbc.com/id/46779100?__source=yahoo|headline|quote|text|&par=yahoo
Apple to buy EMC
iCloud is great for consumers but it is not for the enterprise.
EMC gets them the enterprise cloud and 80% of VMware to boot.
Talk about a juggernaut!
iCloud is great for consumers but it is not for the enterprise.
EMC gets them the enterprise cloud and 80% of VMware to boot.
Talk about a juggernaut!
Oh I'm not arguing with you. Keeping things secretive also helps keep down the share price (and therefore purchase price). It's in Apple's best interest. I just don't know of anything Apple would need right now to make a big purchase necessary. It would be a real shock if they did anything that drastic.
It's an election year and despite the "good" jobs reports the past few months unemployment is still very high. That said, I agree with you. There's a reason Apple doesn't make products here. Americans in general wouldn't want to work in the kind of jobs that Foxconn has to offer, and if they did, they would demand a lot higher wages, which would make the products uncompetitive.
We need more engineers and scientists in this country. That's what will drive growth in the future. However, unfortunately, our education system is falling a bit behind the times. The solution isn't to bring back low-skilled jobs. It's to bring education into the 21st century.
Of course, in the meantime, we still need engineers and scientists here, since it takes about 10-20 years before improvements in our educational system are felt. That, unintuitively, means that to help improve the American job scene, we need to make it easier for engineers and scientists from overseas come here or stay here. Our universities are the best in the world. It used to be a given that the best and brightest from around the world came here and stayed here. Now more and more of them are coming here to get educated, and then returning home to China or India to make it over there.
That still leaves some interesting possibilities.
Twiter- Use the crowd sourced data to drive a new style of search engine.
Flipboard - Fill out newstand and iBook publishers teams, make a full eMag publishing platform, including a new per article publishing system.
Manufacturing jobs are the back bone of the economy. More people are employed in manufacturing than in office jobs. That's why the economy has gone down the tubes in the USA, because all of the good high paying manufacturing jobs are being cut.
Manufacturing jobs are not low pay. Some are, but a lot of auto workers make $30+ an hour, which is pretty good money these days.
Also, a lot of people want a boring, respetitive job. They want to show up, do there job, and go home. They don't want to have to worry and stress over the pressures of the job.
I've worked in manufacturing, and it was a great way to earn decent money. I jumped into an office job when an opening came available, and I'm really liking it. But I wouldn't have had this opportunity had it not been for my manufacturing job.
Charity?
I think Apple should donate just 5% of their cash to charity. That's $5 billion.
How about picking 10 charities and giving each of them 500 million?
Or 100 charities and giving each of them 50 million?
Just sayin'
I think Apple should donate just 5% of their cash to charity. That's $5 billion.
How about picking 10 charities and giving each of them 500 million?
Or 100 charities and giving each of them 50 million?
Just sayin'
True. To be fair to Michael Dell, he made that statement in 1997. If anyone else besides Steve Jobs were named CEO, that might well have been the best course of action. They had gone through 12 years of stagnation under Sculley, Spindler, and Amelio. Steve came back just in time. They were still solvent in 1997, but just barely.
It's a testament to Steve Jobs that he built up a great company 3 different times. He built Apple up the first time, then Pixar, then Apple the second time.
Think Outside The Box
Many large institutional investors are FORBIDDEN from buying non-dividend paying stocks.
Many large institutional investors are FORBIDDEN from buying non-dividend paying stocks.
Those $30/hour auto jobs bankrupted 2 of our 3 automakers, though. The new GM and Chrysler have put in place new policies that pay lower wages, more in line with what the Japanese and European manufacturers pay employees in the South.
Manufacturing is important, but we don't need the kind of manufacturing that takes place at Foxconn factories. We need more skilled labor. Foxconn is mostly an assembler of products that are made by other companies. We need high-value manufacturing, such as production of chips and displays.
Makes sense. Not the most interesting move, but the obvious one that assures that everyone will love Apple for the next year or so.
Err....
Erm... Ok, I don't really understand the people here who are against a buy back.
Someone mentioned why buy the stock at an all time high -- versus what? Waiting for the stock to move down to an all time low?
IF the iPad 3 has a huge pick up... IF Apple has a TV product coming out... IF there's an amazing new iPhone 5 this fall... If if if -- if all or any of those, why would Apple NOT do a buy back now, even at an all time high?
Companies do stock buy-backs when they feel their company stock is under valued. At a 16.5ish P/E, Apple is historically WELL under valued, even if the actual dollar figure on the stock price is "high". Look back over the years and you'll find it had around a 22 P/E less than 2 years ago. It's just been eroding since Steve stepped down and then again when he died in the fall.
High price aside, the stock is still historically undervalued -- unless you believe there's nothing new or good coming out of Apple. But I don't believe their innovation is really done. *shrug*
Frankly, we should all be a little worried if Apple DOES NOT buy back stock. Because if they don't, then they basically think the stock is fairly valued or going down. That'd be a bad thing for investors.
A dividend sure, they should definitely start something in the 1 to 2% range indeed to bring in the other dividend investors who could help the stock climb back to it's warranted 20+ P/E. (The P/E is far lower, btw, if you strip cash value from the company -- strip cash from MSFT and AAPL and then compare their P/E's.)
People who said stuff about starting a network, building a new data center... sorry, but you're not thinking about how much cash Apple is throwing out each quarter. The big Data center in North Caroline was said to cost about $1 billion. Apple threw off $16 billion in FREE CASH in Q4 '11. That's enough for 16 North Carolina data centers from just 1 quarter.
With iPad 3 and "what's in the pipe", they're sure to INCREASE their free cash flow. It's not reasonable for them to just sit on that cash -- OR to spend it frivolously on willy-nilly projects they can't really get behind. It's never a good idea to "just spend money" on things because you have money. Apple has always understood that very well.
*shrug* *wink*
Erm... Ok, I don't really understand the people here who are against a buy back.
Someone mentioned why buy the stock at an all time high -- versus what? Waiting for the stock to move down to an all time low?
IF the iPad 3 has a huge pick up... IF Apple has a TV product coming out... IF there's an amazing new iPhone 5 this fall... If if if -- if all or any of those, why would Apple NOT do a buy back now, even at an all time high?
Companies do stock buy-backs when they feel their company stock is under valued. At a 16.5ish P/E, Apple is historically WELL under valued, even if the actual dollar figure on the stock price is "high". Look back over the years and you'll find it had around a 22 P/E less than 2 years ago. It's just been eroding since Steve stepped down and then again when he died in the fall.
High price aside, the stock is still historically undervalued -- unless you believe there's nothing new or good coming out of Apple. But I don't believe their innovation is really done. *shrug*
Frankly, we should all be a little worried if Apple DOES NOT buy back stock. Because if they don't, then they basically think the stock is fairly valued or going down. That'd be a bad thing for investors.
A dividend sure, they should definitely start something in the 1 to 2% range indeed to bring in the other dividend investors who could help the stock climb back to it's warranted 20+ P/E. (The P/E is far lower, btw, if you strip cash value from the company -- strip cash from MSFT and AAPL and then compare their P/E's.)
People who said stuff about starting a network, building a new data center... sorry, but you're not thinking about how much cash Apple is throwing out each quarter. The big Data center in North Caroline was said to cost about $1 billion. Apple threw off $16 billion in FREE CASH in Q4 '11. That's enough for 16 North Carolina data centers from just 1 quarter.
With iPad 3 and "what's in the pipe", they're sure to INCREASE their free cash flow. It's not reasonable for them to just sit on that cash -- OR to spend it frivolously on willy-nilly projects they can't really get behind. It's never a good idea to "just spend money" on things because you have money. Apple has always understood that very well.
*shrug* *wink*
I'd like to see Apple use some of their cash to secure mineral mining rights for the rare-earth raw materials they need to produce pretty much all of their products.
The supply for these raw materials will only get tighter and prices will only go up as time moves on.
Seems that securing a supply of these raw materials would be the best long-term bet for use of at least some of their cash.
Besides that?
Investing in some research partnerships to develop alternatives to the hard to find rare-earth raw materials, as well as improving battery technology....
Expanding local production outside China, to hedge on the always increasing petroleum/transportation costs... At the very least have limited production capacity in each continent for each product line? Sooner or later, the value of cheap labor with centralized production in Asia will be surpassed by the transportation costs as fuel prices continue their predictable rise.
There's quite a few options for Apple's cash that doesn't involve dividends. Options that would provide far greater benefits to investors moving forward.
Now, as far as what Apple will discuss?
I don't expect Apple to give us any real specifics..
I tend to think we'll get a very general announcement with very general figures outlining some use of the money in R&D, acquisitions, expansion of campuses/construction, and long-term component contracts..
If they do include any specifics I think it will focus on the new UFO campus.
The supply for these raw materials will only get tighter and prices will only go up as time moves on.
Seems that securing a supply of these raw materials would be the best long-term bet for use of at least some of their cash.
Besides that?
Investing in some research partnerships to develop alternatives to the hard to find rare-earth raw materials, as well as improving battery technology....
Expanding local production outside China, to hedge on the always increasing petroleum/transportation costs... At the very least have limited production capacity in each continent for each product line? Sooner or later, the value of cheap labor with centralized production in Asia will be surpassed by the transportation costs as fuel prices continue their predictable rise.
There's quite a few options for Apple's cash that doesn't involve dividends. Options that would provide far greater benefits to investors moving forward.
Now, as far as what Apple will discuss?
I don't expect Apple to give us any real specifics..
I tend to think we'll get a very general announcement with very general figures outlining some use of the money in R&D, acquisitions, expansion of campuses/construction, and long-term component contracts..
If they do include any specifics I think it will focus on the new UFO campus.