No good Apple quarter goes unpunished

17 Comments

  1. David Emery said:
    I guess Apple will just have to accept going from 2 record-shattering quarters to “just” consistent strong growth with increasing profitability, along with a growing number of money-making endeavors (services, wearables, who-knows-what-next?)

    Poor AAPL investors, ours is a sorry lot!

    7
    May 4, 2021
  2. Tommo_UK said:
    Been at this 20 years. Same pattern different decade.
    Anyone else thinking of frontrunning the EPIC case on a dip? Hell will freeze over before Apple is forced to allow non-curated apps on mobile devices. The security implications alone are too horrific to contemplate.

    Governments should be careful what they wish for, as should consumers. Apple create the app market and the ginormous economy and ecosystem it gave birth to. Devs should thank their lucky stars Apple delivered the software dev opportunity of a lifetime, literally.

    Epic can take a flying fig leaf and go begging as far as I’m concerned. You want to showcase your product in Harrods? You sell wholesale to them, they take their margin, consumer pays full price. It’s a model as old as prostitution.

    Epic need a kick in the balls for this, and as for the EU, they don’t have any balls to kick – just a load of wailing waffle about choice – which consumers already have by buying an iPhone or one of many other phones running android or other phone OS’s.

    “Epic farce” sums this all up, but hey, you gotta find someone to blame shame and tax to pay for your lousy business plan or political cock ups somehow eh?

    19
    May 4, 2021
    • Bob Goldstein said:
      Your post reminds me of years ago when you said Apple will be opening the iPhone SDK to developers. After reading that I added quite a few shares. Thanks

      2
      May 4, 2021
      • Tommo_UK said:
        I remember writing that post! 🙂

        1
        May 5, 2021
  3. Bruce Oran said:
    You know Tim Cook and Luca Maestri are opportunistically buying up these shares as fast as they can. Now imagine how much selling is truly occuring to counter the number of shares that Apple is gobbling up! That is a lot of selling! Those spring coils just get tighter and tighter as the P/E goes lower and lower. Forget the “law of big numbers”, the laws of financial physics has to kick in eventually (for every action, there is an equal and opposite reaction)!

    7
    May 4, 2021
  4. Fred Stein said:
    And a big shout out to Tim Sweeney for making Apple’s buyback a little more effective for a while.

    7
    May 4, 2021
    • David Emery said:
      It is interesting to think about what happens to Sweeney if (when) the court rules for Apple. But it’s a rare CEO who bets the company, loses big, but doesn’t walk away with a golden parachute.

      3
      May 4, 2021
      • David Drinkwater said:
        Yeah, that’s the bullchute problem with it all.

        CEOs manufacture chaos, promote fear and loathing, and then get rewarded for it.

        Thank goodness for AAPL, I don’t have to do that for a living.

        Sadly, I remain a light sleeper. But I sleep better not peddling bullchute.

        1
        May 4, 2021
  5. Dan Scropos said:
    It appears, if my math is correct, Apple retired a net of ~185 million shares last quarter. They may have the opportunity to do about the same this quarter.

    Looking 3-5 years down the road to the AR/VR opportunities, as well as M2/M3, etc, this period will be looked back upon as genius work by Luca and Tim. While I see the p/e normalizing to 30-35, there’s still so much room to grow both revenue, operating income and eps. Apple is a $200 stock in 2023.

    2
    May 4, 2021
    • Bart Yee said:
      @Dan, I had modeled Apple purchasing 193.55M shares at ASP $124.00 with $24B for buybacks. But according to the 10Q filing, they only spent $19B for 147.407M shares (ASP $128.89), leaving $13.35B left. W/additional $90B, $103B for coming 4 quarters, about $25.8B / quarter.

      Here’s how it broke down:
      Q2 2021
      Shares in thousands (147,407 total)
      63,892 Jan ASP $133.04 = $8.50B
      34,328 Feb ASP $131.09 = $4.5B
      49,187 Mar ASP 121.98 = $6.0B

      147,407 @ $19.0B = ASP $128.89

      Note in the reporting month of Jan, despite any blackout period, Apple was exceedingly active buying back shares, perhaps anticipating a run which did not materialize. March did prove an advantageous month to buy on dips.

      I suspect more buying in April using $5-6B, and if May stays in mid-120’s, $8.5-9B. I’d anticipate $17-22B being spent, more if AAPL drops below $120.

      0
      May 5, 2021
  6. Michael Goldfeder said:
    Tim Sweeney is Mr. Magoo 2.0. But nowhere near as smart.

    0
    May 4, 2021
  7. Daniel Epstein said:
    There are times when the stock price of a company reflects what is going on with the company it’s present and its future. Then there are other times when the price action has to do with the market,macro effects and movements. When that happens the company’s own story of success is not rewarded the way it might deserve. This earnings season seems to be one of those times for tech stocks in general and Apple specifically. It has happened before and will happen again but this time seems more disconnected from reality. Not sure why people think Tech like Apple will do poorer in a booming economy than a pandemic one even if they have to adjust App Store fees a bit, Europe tries to fine them, products are somewhat delayed and corporate taxes are raised. I know I personally am looking at a large amount of purchases of Apple device and services going forward.

    4
    May 5, 2021
  8. Bart Yee said:
    One of the reasons we could be in this April-May volume doldrums is people have been preoccupied with the April-May tax season and addressing cash flow, back to work, and reopening issues. Those who are not in AAPL may be deploying their cash for more immediate personal or business needs. Institutions, managed (hedge) funds are still IMO scattershot trying to find the next pandemic recovery stocks and rotating in and out like daytraders (that they are). There’s more buck-makers than long term investors for now.

    0
    May 5, 2021
    • Bart Yee said:
      Thing is, as the US and other countries eventually recover, jobs and salaries will pick up, big $$$$$ flows to retirement plans again, and managers are going to have to choose which stocks to long term invest. IMO, AAPL will look dirt cheap at high 20’s PE after each quarter if this continues, especially running into the Q1 2022 Holiday quarter, pandemic resurgence notwithstanding. If pandemic variants threaten, growth may be moderated and inflation tamped down. If not and the pandemic truly subsides, economies will move ahead in fits and starts until new higher equilibriums return.

      IMO, consumer spending will return with a vengeance once reopening sticks. Sure, there will be bigger rebounds in leisure spending, airlines, oil and auto (driving) so AAPL may be back-burnered or outright ignored for awhile. But Apple will continue to move forward and generate more products, services and revenues.

      1
      May 5, 2021

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