What's Wrong With Apple (stock)?

[MU82]

Anyone thinking about jumping in on CPB today?

Like most of the rest of the prepared foods/consumer staples industry, CPB is having all kinds of troubles the last year or so. GIS, PG, CL, CLX, MO, K, PEP, KO, etc, etc, etc. Treasury rates have a lot to do with it, as does the fact that most were overvalued and now are coming back to earth.

I own several of the above and am not looking to add more, so I haven't looked deeply into CPB to see why it in particular is struggling. Don't know whether it's just falling with the rest of them or it has its own issues.

If one believes in the industry, there are lots of potential value plays here. If one is down on the industry, not so much.

[Jay Bee]

Anyone thinking about jumping in on CPB today?

May 21 close - $33.58
Current: $40.90

Up 21.8%. Get at me!

[JWags85]

May 21 close - $33.58
Current: $40.90

Up 21.8%. Get at me!

Nothing like a tasty takeover rumor to make a call look even better.

[Jay Bee]

Nothing like a tasty takeover rumor to make a call look even better.

I’m tempted to hop out already. Just bought another (different) dog today. That one I’m hoping brings me greatness in a year (plus should yield a div of 4%+)

Lotsa cash still on the sidelines. Scared, but have to play some

[Jay Bee]

AAPL still limping along... over $200

[jesmu84]

AAPL still limping along... over $200

Is that a good or bad thing?

https://www.theatlantic.com/amp/article/566387

[tower912]

Man bites dog.

[Jockey]

Is that a good or bad thing?

https://www.theatlantic.com/amp/article/566387

Did anyone really think this wouldn't happen with the tax cut? This was the purpose of the bill.

Very few people are buying that it was for the middle class.

[GGGG]

Is that a good or bad thing?

https://www.theatlantic.com/amp/article/566387

Stock buy backs are just a way to pump up a stock price in the short term instead of actually investing into something for the long term.  They are great for short term holders, but terrible at creating value.

[JWags85]

Stock buy backs are just a way to pump up a stock price in the short term instead of actually investing into something for the long term.  They are great for short term holders, but terrible at creating value.

Thats been AAPL's MO for awhile.  This quarter had very little actual growth.  They are touting the growth of services revenue, but its potential growth is a small piece of what market cap would add from the stock continuing to rise by projected "growth".  Iphone sales are flat, Mac sales are down.  Sure iPhone prices are continuing to rise, but it seems like unit sales growth has stagnated, which you dont want to see.

I'm not saying sell AAPL, i'm not saying its going to crash and burn $50-$75 to the downside, but its just very hard for a company of that size to grow in the ways that people keep expecting it to do.  And adding $10-$15B in services revenue for a company doing $250B in revenue doesnt scream MASSIVE GROWTH.  But they can keep buying back shares and central backs, like the Swiss, can keep buying the stocks in massive volume.

Just my thoughts and opinion.

[Benny B]

Did anyone really think this wouldn't happen with the tax cut? This was the purpose of the bill.

Very few people are buying that it was for the middle class.

Good evening ladies and gentlemen, and welcome to tonight’s episode of “Shameless Political Detours.”

Seriously, Brand.... even when Chicos starts to settle down, you just have to keep the flames stoked, aiyana?

[MU82]

Stock buy backs are just a way to pump up a stock price in the short term instead of actually investing into something for the long term.  They are great for short term holders, but terrible at creating value.

Buybacks are especially good for the major shareholders - i.e. the CEO, the BoD and other company bigwigs. I much prefer dividends to buybacks.

But yeah, AAPL with yet another record high. Now much better than a two-bagger since Smuggles warned everybody to stay away.

[mu03eng]

I've thought about the buyback issue for a while now. I do think unfettered ability to buyback stock can be detrimental but I think there are legitimate business reasons to do it (such as if you are cash rich with a lot of relatively low priced stock out there you might buyback as a defense against a take over). So the question is, what does a reasonable regulation look like that is enforceable and doesn't swing the pendulum too far the other way ("outlawing" buybacks)?

[Jockey]

Good evening ladies and gentlemen, and welcome to tonight’s episode of “Shameless Political Detours.”

Seriously, Brand.... even when Chicos starts to settle down, you just have to keep the flames stoked, aiyana?

No politics. Since the tax cut, US public companies announced a whopping $436.6 billion worth of stock buybacks. It is the most ever, almost doubling the previous record.

Explain to me where I was wrong - even if it is tougher than attacking me personally.

[Benny B]

No politics. Since the tax cut, US public companies announced a whopping $436.6 billion worth of stock buybacks. It is the most ever, almost doubling the previous record.

Explain to me where I was wrong - even if it is tougher than attacking me personally.

[GGGG]

Thats been AAPL's MO for awhile.  This quarter had very little actual growth.  They are touting the growth of services revenue, but its potential growth is a small piece of what market cap would add from the stock continuing to rise by projected "growth".  Iphone sales are flat, Mac sales are down.  Sure iPhone prices are continuing to rise, but it seems like unit sales growth has stagnated, which you dont want to see.

I'm not saying sell AAPL, i'm not saying its going to crash and burn $50-$75 to the downside, but its just very hard for a company of that size to grow in the ways that people keep expecting it to do.  And adding $10-$15B in services revenue for a company doing $250B in revenue doesnt scream MASSIVE GROWTH.  But they can keep buying back shares and central backs, like the Swiss, can keep buying the stocks in massive volume.

Just my thoughts and opinion.

Yeah I agree with this.

And I may be not understanding something completely here, but aren't stock buy backs similar to a dividend?  So instead of distributing your excess cash to the shareholders on a regular basis, they are pumping up the stock price.  Both create value for the shareholder, but the latter has better "optics" in the investment markets.

[mu03eng]

Yeah I agree with this.

And I may be not understanding something completely here, but aren't stock buy backs similar to a dividend?  So instead of distributing your excess cash to the shareholders on a regular basis, they are pumping up the stock price.  Both create value for the shareholder, but the latter has better "optics" in the investment markets.

Both are mechanisms for putting cash in investor pockets but dividends have a shorter term impact because A) you have to own the stock at a given point to receive the dividend(so you can't buy a stock to get the dividend) B) dividends do nothing to change the scarcity of a stock so supply and demand doesn't factor in like buybacks do. Dividends can drive up a stock price long term if a company is paying them out on the regular whereas buybacks pump the price up because there are fewer stocks and/or people want to cash out of a certain investment at a premium. Regular dividends would indicate continuing strength in a company but that's also why companies have come to rely more on buybacks than dividends...if you cut a dividend just once for some reason it can tank the stock long term whereas not doing a buy back isn't signaled as anything.

[GGGG]

Both are mechanisms for putting cash in investor pockets but dividends have a shorter term impact because A) you have to own the stock at a given point to receive the dividend(so you can't buy a stock to get the dividend) B) dividends do nothing to change the scarcity of a stock so supply and demand doesn't factor in like buybacks do. Dividends can drive up a stock price long term if a company is paying them out on the regular whereas buybacks pump the price up because there are fewer stocks and/or people want to cash out of a certain investment at a premium. Regular dividends would indicate continuing strength in a company but that's also why companies have come to rely more on buybacks than dividends...if you cut a dividend just once for some reason it can tank the stock long term whereas not doing a buy back isn't signaled as anything.

Gotcha.  Thank you.

[Jay Bee]

Got in on SONO today. $17.xx. Let’s hope for the best. Love the product. May hop in & out quick. Over & over too. Twss

I AM THE STOCK MARKET

Edit: out at $19.36. Made some g’s in 64 minutes. Back in later if it falls.

[Benny B]

Got in on SONO today. $17.xx. Let’s hope for the best. Love the product. May hop in & out quick. Over & over too. Twss

I AM THE STOCK MARKET

Edit: out at $19.36. Made some g’s in 64 minutes. Back in later if it falls.

Facebook call options.  Dirt cheap $185 FB 9/21 C's are going to make me forget about all that GE lead in my portfolio.

[tower912]

$1,000,000,000,000

[MU82]

$1,000,000,000,000

Smuggles retreats further into his bunker.

[MU82]

I've thought about the buyback issue for a while now. I do think unfettered ability to buyback stock can be detrimental but I think there are legitimate business reasons to do it (such as if you are cash rich with a lot of relatively low priced stock out there you might buyback as a defense against a take over). So the question is, what does a reasonable regulation look like that is enforceable and doesn't swing the pendulum too far the other way ("outlawing" buybacks)?

I don't see how there can be any legislation against buybacks. It is up to investors to try to hold any BoD accountable for its actions ... which of course is easier said than done.

I am not morally or even fiscally opposed to the idea of buybacks. I also think there can be legit buybacks. My problem is that many companies execute buybacks at the exact wrong time - such as when the P/E ratio of their stock is at historic highs.

Despite the run-up, AAPL is not yet extremely overvalued; I don't mind the buyback but I would prefer a bigger dividend.

As for a dividend having a shorter-term impact ... it depends. If a company has a history of committing to raising its dividend, it can have quite a long-term impact for investors. I drip just about every stock I own - I like all of 'em, so I always want more of 'em - so I am constantly putting my divvies "to work."

[Jay Bee]

SONO up 15% this morning

[WarriorDad]

Did anyone really think this wouldn't happen with the tax cut? This was the purpose of the bill.

Very few people are buying that it was for the middle class.

One of the purposes, not the purpose.  If a company feels their stock is valued low, they should have every right to buy it back and take shares off the market.  Employees are part of corporations and they benefit, too.  Most people get a tax break, that means most will get more money out of the deal in the short term.  Wages are up (highest since 2009) and with unemployment so low they will go up higher as labor markets are tight and employers have to pay more for talent, economy is roaring right now, but everything is cyclical and will come down again.  The question is whether a bust comes on the heels of all of this.

The other purpose was to move money offshore to the US.  Get it out of Ireland and other low tax situations.  Apple is moving vast sums of money ($285 Billion) from foreign countries to the US, as an Apple shareholder I applaud this.  https://www.cnbc.com/2018/04/30/apples-plan-to-repatriate-285-billion-could-be-a-boost-for-investors.html  Good move. Rather have the money here, working for the citizenry here.  https://www.theverge.com/2018/1/17/16901936/apple-tax-bill-foreign-money-united-states