apple inc. (nasdaq: aapl)
Here are this week's need-to-know facts about the stock market, economy, Wall Street, and life-changing global events...
It's the numbers that count in this crazy world. They can tell stories that words sometimes can't.
Here's a look at some of the fascinating, infuriating, amusing, depressing, and altogether important numbers that the world has put up on the board recently - and why you need to know them.
Shah Gilani: Why Apple Stock Is Still a Winner
Despite Apple stock recently taking a hit, Money Morning's Capital Wave Strategist Shah Gilani appeared on FOX Business' "Varney & Co." to explain why Apple Inc. (Nasdaq: AAPL ) is still a winner. He emphasizes the positive impact of Apple's cash flow on Apple stock.
Also, hear Shah's simple explanation of how Apple's bond offering is actually going to be a positive for Apple stock, as he breaks down complicated financial metrics and accounting rules for viewers.
Apple: Don't Hate the Player, Hate the Game
Apple Inc. (Nasdaq: AAPL) CEO Tim Cook was summoned to Congress last week to face outraged legislators over his company's failure to pay corporate income taxes to any national government on more than $74 billion in overseas earnings.
This is a perfect example of a situation that is simply the tip of the "offshoring" iceberg. Below, I'll address what it means for your money and why the outcome may not end up at the "obvious" solution.
According to a Congressional investigation, the Cupertino giant paid no taxes whatsoever to any national government on more than $74 billion in revenues - a fact that Apple doesn't dispute.
As galling as this is, what Apple did was perfectly legal. Using well-documented and well-known loopholes in the U.S. and Irish tax codes, Apple set up Irish shell corporations that allowed them to funnel dividends and earnings from offshore investments in such a way as to not incur tax liabilities...in any country.
Interestingly, Senate aides associated with the investigation said they've never seen companies use subsidiaries that didn't owe taxes. Evidently, they haven't looked very hard.
What Apple's doing is nothing new or unique. Almost every multinational corporation operates in the same shady territory. Most have thousands of accountants and lawyers on staff whose sole job is to make sure everything those companies do is tax "efficient."
Foreign subsidiaries are just the beginning. There's transfer costing, loans between subsidiaries, options-based compensation, tax deductions for malfeasance, and intellectual property offshoring -- just to name a few of the favorite tax dodges in widespread use today around the world, quite literally.
For example, Microsoft Corp. (Nasdaq: MSFT) sends an estimated $0.46 cents on every dollar through Puerto Rico to pay for patent costs associated with discoveries that are "mostly" made inside the United States, according to the Institute for Policy Studies or "IPS" for short.
Microsoft CEO Steve Ballmer's crew stashed $60.8 billion offshore last year alone and didn't pay a dime in U.S. taxes. That's an estimated $19.4 billion it'd owe Uncle Sam if brought home.
Pfizer Inc. (NYSE: PFE) sells 35%-45% of its drugs inside the United States but has reported no U.S. profits in five years. The IPS estimates the pharma giant booked $73 billion in profits offshore last year.
Apple iPhone 5 Demand Alone Will Push Stock Price Past $800
If the Apple iPhone 5 turns out to be the blockbuster product that nearly everyone expects, it should easily carry the company's stock to $800 and beyond.
The long-anticipated next-generation iPhone is expected to debut at an Apple Media Event Sept. 12 and go on sale Sept. 21.
Rumored improvements such as a bigger 4-inch screen and 4G LTE network compatibility have heightened consumer anticipation, even slowing sales of the current iPhone 4S.
A recent survey of more than 4,000 American consumers by ChangeWave Research indicated that many can't wait to give their money to Apple Inc. (Nasdaq: AAPL).
"Advance demand for the iPhone 5 is strikingly higher than we've seen for any previous iPhone model," Paul Carton, ChangeWave's vice president of research, told Computerworld.
In addition, extraordinarily positive guidance from several iPhone component suppliers hints that Apple has ramped up production like never before. Cirrus Logic (Nasdaq: CRUS) forecast a 70% sales increase for the current quarter. Omnivision (Nasdaq: OVTI) said it expected revenue to jump 38%-50%.
[ppopup id="70925"]Six ways you can make money as the masses flock to Apple for the iPhone 5. [/ppopup]
And with Apple's huge patent case victory over Samsung two weeks ago casting a cloud over the iPhone's Android-based competitors, conditions are ideal for a huge iPhone 5 launch.
In a note last month, Piper Jaffray analyst Gene Munster, predicted the Apple iPhone 5 would be "the largest consumer electronics product upgrade in history." He forecast the iPhone 5 will sell 6-10 million units within its first 10 days.
Another analyst, Horace Dediu of Asymco, has projected iPhone 5 sales of about 170 million units over the next year, which would beat first-year sales of the iPhone 4S by about 70%.
Given that the iPhone contributes more than half of Apple's profits, any large increase in iPhone sales will deliver a mammoth boost to the bottom line. And those rapidly rising profits will keep pushing AAPL higher.
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- Apple TV: What We Know, What We Don't and Why You'll Stand in Line to Get It
Six Ways to Win Big on Apple's (NASDAQ:AAPL) New iPhone 5
So much for Apple Inc.'s (NASDAQ:AAPL) big earnings miss.
After coming under some brief pressure, Apple has since powered its way to new all-time highs.
Much of that rally stems from one key fact: Apple is set to release the hotly watched iPhone 5 as early as Sept. 21.
Make no mistake about it -- this is a key product launch for the firm, its stock and the whole mobile computing food chain.
Based on the number of people who want to buy the new device the moment it comes out, I think the iPhone 5 launch promises to be another huge success.
Clearly, the market agrees or Apple shares wouldn't once again be on such a tear.
For investors, that means it's time to take a serious look at how to ride this trend as the iPhone 5 product launch unfolds.
In fact, I've found six ways investors can play the iPhone 5's release right now. They include:
iPhone Play Number 1: Apple Inc. (NASDAQ: AAPL)
No doubt, many investors wonder if Apple stock can go much higher. Yes, it sports a high sticker price. But take a look at the numbers.
AAPL trades at just 12 times forward earnings, in line with the overall market. It sports a PEG of just .65 and has an operating margin of 35%.
Talk about cash flow. It has $27 billion in cash on hand and an equal amount in free cash coming in. And earnings will likely continue to grow at 20% a year.
Not only that, but the iPad is still ripping the high-tech market to shreds. Shipments grew 44% to 17 million in the second quarter, giving Apple the lead in the fast-growing tablet market.
Now you know why Peter Misek, an analyst at Jefferies & Co., has raised his price target to $900 from $800 a share, for a potential upside of 38%.
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Tech Stocks to Watch: Apple Inc. (Nasdaq: AAPL), Research in Motion (Nasdaq: RIMM), Guidewire Software
Research in Motion Ltd. (Nasdaq: RIMM), Apple Inc. (Nasdaq: AAPL), and a software company's IPO round out the biggest headline-making tech stocks this week - but not all are "Buys."
Major change for RIM: Research in Motion, the struggling Blackberry smartphone maker, has named a new Chief Executive Officer to replace co-CEOS Mike Lazaridis and Jim Balsillie - but could be too little, too late for RIM.
The company announced Monday morning that RIM-insider Thorsten Heins would take over the reins effective immediately. Lazaridis will stay on as vice chairman of the board; Balsillie will stay as a director.
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Apple Inc. (Nasdaq: AAPL) Loses its Magic Touch with Steve Jobs' Departure
To say Apple Inc. (Nasdaq: AAPL) won't be the same company without Steve Jobs is an understatement.
Jobs helped Apple's share price climb to $373 - a 9,020% gain since 1997 when he was named interim CEO. Earlier this month, Apple's market capitalization grew to $337.17 billion and it briefly displaced Exxon Mobil Corp. (NYSE: XOM) as the most valuable U.S. company, but was unable to hold the lead.
All this from a college dropout who quit his first job to backpack around India.
Yet, the legendary Jobs stunned fans and employees late Wednesday when he announced he would step down as the chief executive officer of the tech giant, 35 years after making his first computer in his parents' garage.
Jobs recommended the company appoint his current fill-in Chief Operating Officer Tim Cook as CEO. Apple's Board immediately did so.
Still, as capable as Cook may be, Jobs' "magic man" presence is irreplaceable.
"I believe the top is in for Apple and it will become a more "normal' company in the future," said Money Morning Global Macro Trends Specialist Jack Barnes. "Steve was an edge they cannot replace. While the company is rich and profitable, it has lost its prophet."
Steve Jobs' Irreplaceable Creative ForceThe news wasn't a shock to some Apple-watchers who speculated Jobs' worsening health would lead to a premature exit.
Jobs had been on medical leave since January, popping up occasionally for conferences and product unveilings. This is his third health-related absence; he was gone in 2004 to undergo pancreatic cancer treatment, and again in 2009 for a liver transplant.
Jobs' personality and demanding management style - paired with his creative genius - are what vaulted Apple to the innovative tech leader it's become.
Perhaps the hardest loss for Apple will be Jobs' intuition.
"The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking," Alan Deutschman, who wrote a biography of Jobs, told The New York Times. "Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut."
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Apple Inc. (Nasdaq: AAPL) to Unveil New iCloud Service With Special Appearance by CEO Steve Jobs
Apple Inc. (Nasdaq: AAPL) plans to unveil its new iCloud service at its Worldwide Developers Conference (WWDC) Monday - and Chief Executive Officer Steve Jobs will make an appearance to headline the event.
In an extremely unusual pre-announcement Tuesday, Apple said Jobs will be on hand to introduce the company's new cloud services offering, which will allow users to access music and other media over the Internet. Jobs has been absent most of the year since taking medical leave in January for the second time in two years, except for an appearance in March to introduce the iPad 2 and a few recent interviews.
Jobs usually keeps information on new products tightly under wraps until they are officially unveiled, but Apple posted a conference preview on its Web site that mentioned the iCloud offering.
Is Apple Inc. (Nasdaq: AAPL) Undervalued?
Apple Inc. (Nasdaq: AAPL) last year passed Microsoft Corp. (Nasdaq: MSFT) to become the largest technology company by market capitalization. Overall, it's now second only to Exxon MobilCorp. (NYSE: XOM) in size.
But shockingly, even at $323 billion, Apple still looks cheap.
After all, the company still sports a tiny 13-times forward earnings multiple.