An Apple Stock Dividend Hike Could Help Set Cash Hoards Free
If Apple Inc. (Nasdaq: AAPL) actually does what many now expect - raise the Apple stock dividend as much as 56% - it could help inspire a trend of givebacks by other cash-rich companies.
Looking at the company's cash hoard of $137 billion - which could reach $170 billion by year's end - a survey of analysts conducted by Bloomberg News this week concluded that an Apple stock dividend hike of $4.14 a share is a likely possibility.
That would raise the stock's yield from about 2.40% now to a much more attractive 3.6% -
higher than 84% of the other dividend-paying companies in the Standard & Poor's 500 Index.
An increase in the Apple stock dividend would almost certainly boost the stock price, which is down about 35% from its Sept. 19 high of $702.10.
"The accumulation of cash has become excessive," Brian White, an analyst at New York-based Topeka Capital Markets Inc., told Bloomberg. "It doesn't matter which bearish scenario you forecast, they're never going to need this much cash."Read More...
Dumping Apple Stock for Google: How Investors Could Get Burned
The trend has some wondering if investors are consciously moving their money from one tech giant to the other.Read More...
What Should Apple Do with its $137 Billion Stockpile of Cash?
Apple Inc.'s (Nasdaq: AAPL) been in the news a lot of late as its stock plunged. Meanwhile, the company sits on a cash pile of $137 billion.
When Apple stock was soaring, investors were happy. But since its stock value plunged some 35% since September, many investors have suggested Apple should share some of itsaccumulated wealth. Fund manager and investor David Einhorn went so far as to sue the company to try to force it to share more of its cash with shareholders.
Money Morning Chief Investment Strategist Keith Fitz-Gerald was asked on FOX Business what Apple (Nasdaq: AAPL) should do with its stockpile of money: Should the company pay dividends to shareholders, pursue major acquisitions or just keep its large cash position for future investments or other costs?
Check out what Fitz-Gerald and other panelists said on the FOX Business report in this accompanying video.Read More...
Apple iWatch, Google Glass First Shots in New Clash of Tech Giants
Coming less than a year after Google unveiled its Google Glass Web-connected eyeglasses, reports that an Apple "iWatch" is in the works emphatically confirm that the battle is now joined for dominance over the next wave of tech - wearable computing.
According to the reports, Apple Inc. (Nasdaq: AAPL) has 100 people working on an iWatch users would wear on their wrists, but that would have many of the same capabilities as an iPhone.Read More...
Why David Einhorn Needed to Sue Apple (Nasdaq: AAPL)
Outspoken fund manager David Einhorn feels so strongly about the need for Apple Inc. (Nasdaq: AAPL) to share more of its cash with its stockholders that he has sued the company.
Shareholders like Einhorn - whose Greenlight Capital fund owns between 1.3 million and 1.5 million shares of AAPL - think the Cupertino, CA-based company should use its monstrous cash pile of more than $137 billion to boost its return.
Einhorn's lawsuit came after his request last year that the tech giant create shares of preferred Apple stock that would exist solely to pay a dividend about twice what the common stock currently pays.
But Apple has included a proposal on its Feb. 27 shareholder ballot that would amend the company's corporate charter to eliminate its ability to create preferred stock. It also has combined that issue with two other unrelated issues in the same proposal.
Einhorn is suing Apple because he says Securities and Exchange Commission (SEC) rules prohibit such bundling, and because he wants to ensure the company will be able to create the type of preferred shares he has proposed.
To further hammer home his point, Einhorn wrote a letter to all Apple shareholders, which was released today, in which he explained his position and urged them to vote against Proposal 2 in the shareholder ballot.
"Proposal 2 is value destructive, impedes the Board's flexibility, and does not merit shareholder support," Einhorn wrote.Read More...
The Apple Sell-Off is Just Beginning
I've made the case several times that Apple Inc. (Nasdaq: AAPL) was over-cooked, most recently last fall when the company was flirting with $700 a share.
Each time I did I was taken to the woodshed by the legions of Apple fans who couldn't reconcile their passion with their profits.
iHere we go again...
Following earnings that "beat" and revenue that fell short, the company dropped $48 billion, or roughly 10%, in afterhours trading on Wednesday. And still more on Thursday in early trading.
I think this is just the beginning of a protracted sell-off. Two very simple reasons... Read More...
Why This Week's Apple Earnings Matter So Much More than Usual
Monster Apple earnings in the December quarter would do wonders for Apple stock - but don't count on that happening.
Apple Inc. (Nasdaq: AAPL) earnings for Q1 2013 are due out Wednesday after market close, and Wall Street estimates range from a 14% decline to a 12% gain. Apple's own guidance is for earnings of just $11.75 per share, while the consensus on Wall Street is for earnings of $13.41 per share.
Even if Apple earnings match Wall Street expectations, $13.41 per share would actually be a decline of more than 3% year-over-year, a far cry from the stunning 118% gain the company reported last year. The psychological impact of declining year-over-year profits for the first time in nine years could ding the stock.
An actual earnings miss - even by just a few pennies - would be more dangerous for Apple stock, meaning the likelihood that Apple stock will fall after earnings is higher than usual.
Here's how Apple got in this vulnerable position.Read More...
The China Smartphone Brand That's Beating Apple (Nasdaq: AAPL)
Most investors who pour money into smartphone makers look to dominant players like Apple Inc. (Nasdaq: AAPL) - but they're missing a bigger part of the market.
The global smartphone industry is changing dramatically, as China surpassed the United States in 2012 to become the world's largest smartphone market by volume. Smartphone shipments to China in the third-quarter of 2012 hit a record 60 million.
Apple has noticed this shift. In fact, Apple CEO Tim Cook recently told Chinese-run Xinhua News Agency that he believes China will become the company's biggest market in the future.
But for now, it's the domestic brands that have won.
"Chinese brands have taken more than half the Chinese smartphone market this year, and they will take much more," Sandy Shen, the head of consumer research at technology research company Gartner in Shanghai, told the Financial Times.Read More...
With Apple Stock at the iPhone's Mercy, Time to Play Defense
We hear one tidbit of bad news about Apple Inc. (Nasdaq: AAPL) cutting orders for iPhone 5 components and - boom! - Apple stock drops more than 6%.
The reason for the stark cause-and-effect on Apple stock is that the iPhone contributes about 53% of Apple's vast revenue. [In fact, were the iPhone a standalone company, it would rank 29th in the Fortune 500.]
This latest Apple bombshell broke late Sunday.
According to reports from Nikkei and The Wall Street Journal, Apple supposedly cut orders for several key iPhone 5 parts for the first quarter. The Cupertino, CA company's orders for iPhone 5 screens, in particular, were reportedly slashed in half.
That was immediately interpreted as a response to lower-than-anticipated iPhone 5 sales, which in turn raised alarms that Apple could be headed for more earnings disappointments, hence the selloff.
Apple followers have questioned the validity of the story. Some bloggers pointed out that the number of iPhone 5 screens that Nikkei said Apple ordered had to be false in that it was far beyond any realistic estimate of iPhone sales for the current quarter.
But whether there's anything to the report or not, its impact on Apple stock has been real.
In the immediate wake of the story, several analysts cut their ratings and price targets. In less than two trading days, AAPL has lost $30 billion of market capitalization - the equivalent of Lockheed Martin Corp.'s (NYSE: LMT) entire market cap.
Apple is now paying the price for having one of the most profitable consumer products in history.
iPhone Becomes Vulnerability for Apple Stock
On the way up, the iPhone made Apple the most valuable company on the planet.
But now that iPhone sales growth seems to be leveling off, the overdependence that such success created has become vulnerability, at least as far as Apple stock is concerned.Read More...
Apple is Really Four Fortune 500 Companies Rolled Into One (Nasdaq: AAPL)
Apple Inc. (Nasdaq: AAPL) is certainly no stranger to impressive numbers. But even if Apple were split into four separate companies, each would be impressive in its own right.
Apple's four major divisions - the iPhone, the iPad, the Mac, and the iTunes Store - rake in so much revenue each that they would rank individually in the top half of the Fortune 500.
The iPhone business, with fiscal year 2012 revenue of over $80 billion, would rank 29th in the Fortune 500, ahead of such tech titans as Microsoft Corp. (Nasdaq: MSFT), Amazon.com (Nasdaq: AMZN) and Google Inc. (Nasdaq: GOOG).
The $32 billion iPad business is no slouch either: It would rank 95th - bigger than Time Warner Corp. (NYSE: TWX).
It's hard to believe that all of AAPL had revenue of just $6.21 billion in 2003.Read More...
Apple Stock in 2013: Hang On For Another Wild Ride
Following the dizzying ups and downs of 2012, investors may be hoping for a little less drama from Apple stock in 2013.
While 2013 figures to be a very different year for Apple Inc. (Nasdaq: AAPL), don't plan on the ride getting much smoother.
With 2012 annual revenue at $156.5 billion and annual profit at almost $42 billion, Apple's biggest challenge heading into 2013 is figuring out how to add meaningful growth.
For example, when Apple reports earnings on Jan. 24, you won't see a repeat of last year's incredible December quarter year-over-year revenue growth of 73% and profit growth of 118%.
Numbers like that helped launch Apple stock on a tear from just over $400 at the start of the year to $544 by March 1.
But this January Apple would need quarterly revenue of $80 billion and profits of $28.5 billion to duplicate that rate of growth. Not even Apple can do that.
If Apple meets current analyst expectations for its Q1 2013, it will have revenue growth of 18% and a 4% decline in profit. That's not the sort of year-over year performance that lights a fire under a stock.
Indeed, Apple stock throughout 2013 will face difficult year-over-year comparisons as each quarter goes up against 2012's record numbers. AAPL is now officially a victim of its own success.
And any hiccups along the way will surely ding Apple stock in 2013, as we've seen repeatedly over the past three months.
Here's a look at what could go right - and wrong - for Apple stock in 2013.
To continue reading, please click here...
With Apple Stock Falling, Be Sure You Do This (Nasdaq: AAPL)
If Sir Isaac Newton were alive today he wouldn't have to sit under a tree to get knocked senseless by an errant fruit - with Apple stock falling, rising, then falling again, just being an Apple investor would do the trick.
Apple Inc. (Nasdaq: AAPL) stock started the year at $411, itself a 27% increase over the course of 2011. The stock rocketed to $626 in April, fell to $530 in May before zooming up to $702 in September.
And then it really got crazy.
Apple stock started falling, taking a rocky slide down to an intraday low of $505 on Nov. 16. Two weeks later, AAPL was back over $590 and threatening to cross the $600 threshold.
Until this week, when Apple stock went falling yet again. On Tuesday AAPL dropped $10 a share (about 1.7%), then Wednesday nosedived another $37.05, or 6.4%, to close at $538.79.
Apple stock today (Thursday) opened in negative territory, slipping quickly down to $518.63. Then it suddenly reversed sharply upward, reaching $550 by noon.
Analysts were left scratching their heads.
"Apple stock is significantly more volatile than its earnings and innovation stream," Daniel Ernst, analyst with Hudson Square Research, told Reuters. "And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down 6%."
"It makes no sense. There are lines around the block for their products all around the world," Ernst added. "No other company has that."
Why Apple Stock is FallingTheories abound as to why Apple stock is falling.
This week's move most likely was triggered when AAPL stock made a "death cross" - that is, the 50-day moving average dropped below the 200-day moving average, typically a bad sign for a stock.
But there are a few other factors that could have turned off investors:
To continue reading, please click here... Read More...
The Apple Stock Drop: What You Need to Know (Nasdaq: AAPL)
As Apple Inc. (Nasdaq: AAPL) stock continues its seven-week tumble, investors want to know what is likely to happen next.
Since hitting an all-time high of $702.10 on Sept. 19, Apple stock plunged $155.04 --more than 22% to close at $547.06 on Friday.
Investors have gotten little help from Wall Street analysts, who have offered diametrically opposed opinions on where AAPL is headed.
Among the prominent bears is Doubleline Capital CEO Jeff Gundlach, who predicted on Thursday that Apple stock would continue all the way down to $425. He said that's about where AAPL was when it started its dramatic climb in January, and he expects it to return to those levels.
Gundlach is down on Apple because he thinks the Cupertino, CA-based company's new products are no longer cutting edge.
"I'm really struck by this mini iPad thing as if that's any kind of a product innovation," Gundlach told CNBC."Once you just start changing the size of your products, I really think you're not exactly innovating."
Meanwhile, some Apple bulls insisted the stock will not only bounce back, but eventually will reach beyond $1,000 a share.
Brian White, an analyst with Topeka Capital Markets, said in a note to clients on Thursday that he's keeping his $1,111 price target on AAPL.
"We believe that those investors that have missed the Apple rally over the past year are presented with a very attractive entry point heading into the strong holiday news season," White wrote.
So which story are Apple investors to believe?
To figure that out, let's take a closer look at what's been going on.
To continue reading, please click here... Read More...
How to Know When to Sell Apple Stock (Nasdaq: AAPL)
Trying to figure out when to sell Apple stock (Nasdaq: AAPL), particularly given its spectacular performance over the past several years, is a major dilemma.
If you're long on AAPL, you're no doubt trying to sort through a lot of conflicting signals.
With AAPL down about 16% from its high of $702.10 on Sept. 19 amid a wave of negative news, some financial pundits are calling a top and urging Apple investors to sell Apple stock.
Trouble is, they've done this many times before during Apple's long climb. Sometimes it's after AAPL hits a new high, and sometimes (like we're seeing now) it's after the stock dips in reaction to some bad news.
But investors who opted to sell Apple stock in years past lived to regret it.
Back in 2010, for example, when AAPL breached the $300 mark, plenty of bears urged shareholders to rush for the exits.
Any who followed that advice missed out on a 100% gain.
At the same time, Apple stock can't keep rising forever. No company can maintain the sort of exponential growth necessary to fuel the kind of gains Apple has enjoyed over the past few years.
But the big question is when this will happen. Now? Next quarter? Next year? 2015?
And as if that weren't enough to make an Apple investor's head spin, there's the added stress of volatility.
From late November to early April, AAPL soared $270, an astounding 75% increase in just four and a half months. Then it fell $100 in the next five weeks.
With turbulence like that, retail investors easily can get heartburn trying to figure out when to sell Apple stock.
That's why we put together some guidance.
To continue reading, please click here... Read More...
Apple iTunes Radio Service Doesn't Leave Pandora Any Hope
Fresh reports that a long-rumored Apple iTunes Radio Service will arrive in February have caused shares of Pandora Media Inc. (NYSE: P) to swoon over the past two days.
Yesterday the selloff was so abrupt it triggered two circuit breakers that briefly halted trading in Pandora stock. Shares closed at $8.20 yesterday (Thursday), down nearly 12%, and have edged lower today.
The Bloomberg News report yesterday afternoon indicated Apple Inc. (Nasdaq: AAPL) is very close to a deal with the major record labels that will enable it to launch a very similar ad-based music streaming service.
Fears of such a service, possibly called iTunes Radio, drew the quick and nasty negative reaction on Wall Street.
"If the Apple radio rumors are true, Pandora has every reason to be scared - terrified, even," wrote Tom Cheredar in a commentary for Venture Beat.
To continue reading, please click here... Read More...