2 years agoApple 3.0 exclusive: AMA with Gene Munster (video)
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Wishful thinking, pound sand!
On Friday, 18th, Bloomberg reports, “Microsoft Designing Its Own Chips for Servers, Surface PCs”.
Apple has chips in shipping products. Microsoft has a press release.
Back in their Gates used to give keynotes at IT conventions. In everyone he held out a vision of the future. There always a half dozen, or more, firms that bought into his vision and developing something that would forward that vision.
Then Gates would examine all their efforts and buy the best, leaving the rest with nothing. It got to a point where a startup’s exit plan was to be bought by MSFT.
Sorry about that….
Buybacks continue – similar pace – $79 B inching down at $5-10 B/qtr – cadence & ability to inch it up is dependent on how business is doing – Analysts predicting 15% up in revenue in ’21 & +5% in ’22 due to more difficult comp – he suspects 10-15% (in ’22) – Growth depends on underlying business – digital transformation has incredible things going on – bodes well for revenue and capital return – Apple is producing so much cash it’s hard to not “inch up” – growth rates will be better than most people think – the buyback and dividend amounts will increase because Apple has inexpensive debt – Apple wants to return cash but it’s hard to do so – Buybacks are an under-appreciated part of the stock – envisions Tim Cook as below the fold with a screwdriver slowly turning the screws so the stock inches higher – it’s hard for Apple to give back stock fast enough and thus get to net cash neutral, so when they report their March quarter we’ll see another increase in buybacks and dividends.
In addition, Apple is limited in the amount of stock they can buy back per session. It’s a percentage, and I believe it’s around 20-25% of the volume. But I’ve never heard of them buying back that much of the total volume. And if they did, it would, needless to say, tend to drive up the stock price, which in turn means that they’d buy less shares for a given amount.
Bottom line: I think Apple is going to have its hands full just getting to net zero in 5 years. And after that, if Apple keeps growing, the coffers are going to need to be kept at net zero, and all that cash has to go somewhere….
Buying and holding AAPL has turned out to be a winning strategy every bit as good as buying and holding any of those companies 5 years back.
Everyone on Apple 3.0 has a large position in Apple, and for Gene Munster to take his time and respond to each inquiry with his thoughtful and well articulated answers, just gives me further confidence in my investment decision with Apple as they continue to execute on their business plan.
Sure, you can follow advice from brokers, talking heads, investment analysts or rely on index funds and mutual fund managers, but remember, their job is to make money off of you, not just for you. IMO, the more you learn and take control of your investments, the better equipped you’ll be in the long run to make wise investment decisions.
Sadly I missed this event due to the new-variant COVID panic in the UK and subsequent lockdown measures, but I’ve just gone through my archive of old comments I’d posted on AFB years ago (pre-2010) and came across this… I wonder if Gene (who was viewed as something of a demigod back then thanks to his then-contrarian conviction in the future of Apple almost single-mindedly against the Wall Street brigade) remember what year it is from and can solve the puzzle of what $130 then would be today several-splits-later?
Hint: it was after Toni said AAPL would never rise above $78 in 2007 (pre-pre-pre split) and had “too many iPhones in the channel, suggesting sales had been weaker than expected. 13 years later and he stills plays the same record…
Comment from Tommo_UK on the old Apple Finance Board:
/quote Piper Jaffray analyst Gene Munster confessed that in his five years of covering Apple he’s never seen anything like the market’s reaction to these earnings.
“I talked to one of our technical analysts before the call and he told me that the stock was going down to 130 no matter what results Apple posted,” Munster said in a phone interview. “Something bigger is going on in people’s minds. There’s a feeling that stocks need to go back to their 200 day averages as the market corrects itself. This is not a bullish sign for other tech stocks going forward.”
Sounds like it was a total short set-up to me. Thank Oppenheimer for handing it to them. You’d think the company would want to finally fsck these people once and for all, but time after time he plays right into their hands and totally screws Apple investors.
Goodnight.
/endquote