Adjusting AAPL's q112 iPhone units for 14 weeks brings them down from 37M to 34.4M in the prior year quarter for comparison purposes (13/14 * 37). If we just look at macro data, IDC says the smartphone market will grow 40% this past quarter. If true and AAPL maintained its market share, then, they should have sold 51.8M iPhones. However, both Kaptran and comScore suggest AAPL made significant market share gains since last year, especially in the U.S. market. Kaptran has U.S. market share up from 35.8% to 53.3% in the Sept. - Nov. 25 period. comScore has U.S. market share up from from 28.7% last November to 35% this November (a full month for both 4S last year and 5 this year). Market share in Europe was also up modestly and the iPhone 5 was launched in 101 countries this year, including China, whereas the iPhone 4s was only launched in 70 and not in Asia, except Japan.
Perhaps IDC is wrong about market growth and/or Kaptran and comScore are wrong about AAPL gaining market share, but if we just take the publicly available data at face value, it would suggest iPhone sales should be 51.8M plus whatever market share gains are assigned to it.
Other factors to consider are 1) the initial iPhone 5 launch was the end of last quarter, so the early bolus of sales were recognized last period whereas the 4S was launched late October 2011, yet the 5 has been available an entire quarter and the 4 probably sold little in the first 3 weeks of October last year awaiting the 4s launch, 2) China sold 2M iPhone 5s in their initial weekend and had 2 additional weeks of sales as well as whatever was realized in the additional 30 countries that the iPhone 4S didn't reach last year, and 3) WMT and Best Buy discounted iPhone 5's (at their own cost to drive foot traffic) while everyone was discounting 4 and 4S (presumably at AAPL's cost based on Cook call comments) to drive additional demand this holiday season.
All combined, it's just very difficult to see how they miss the 47M to 49M unit forecast of analysts this period.
Sentiment: Strong Buy
I would guess Barry and Kaiser are now in the waiting mode. On the substantive issues of whether LINE's distribution and ability to grow through acquisitions are in jeopardy, it would appear from the S-4 filing (and the additional acquisition announcement) that neither are in jeopardy. In fact, it would appear the ability to cover the distribution is enhanced by the new language and the newly announced acquisition. So, while Barry and Kaiser could perhaps pound their chests about being right on a few of the finer technical accounting points, on the substantive issues that shareholders care about and that will effect LINE valuation, they appear to have been dead wrong at the moment. Only time will tell as this entire saga plays out.
In my view as a former CEO of a public company having dealt with government agencies, it appears to me that the Company has accepted a lot of things that have no material effect on their business to satisfy and agency that wanted a pound of flesh. I say this knowing Raymond James said the changes would have no impact on the distribution (and they must have confirmed this with management before saying it publicly). I also say this because if the distribution were in jeopardy, they would not even bother to try to proceed with the BRY deal. IMO, when Goldman and others come out supporting the idea that these changes to language are not material and do not impact the distribution, the stock will return to where it was a couple of days ago and head towards the low $30's again.
Highly unlikely. You would have to prove they knowingly lied to manipulate the stock price. Their defense would be that they didn't knowingly lie, but rather that they are just plain stupid. I think Barry at Barron's and both McCollough and Kaiser at Hedgeye would win hands down on a stupidity defense.
I don't give much credence to these SA articles, but I do expect the Raymond James analyst knows what he is doing when he claims the distribution is safe with the new approach to calculating it. Someone else suggested on this board that Goldman Sachs has concluded the same thing, though I have yet to find that one. GLTA
No doubt, the incremental dilution of the higher bid for the combined company is about 8%. So, if you had hoped to recognize $40 per share in the near-term, you may want to reset your sites to $36.80. But, I would argue that this management team has delivered year after year and none of us know the facts they considered in upping the bid, so we should give them the benefit of the doubt. For example, I doubt they had other meaningful acquisition alternatives. Anything significant would have required equity and no one would want to talk to them when they were subject to an SEC inquiry. With BRY under their belt and the SEC inquiry behind them (if it is), then, they are primed to pursue their strategy of making accretive acquisitions that allow them to raise their distribution, even if the BRY deal ends up taking one step back for two steps forward.
While I was hopeful we would hear the S-4/A had been made effective, the results are quite impressive on their own. Obviously, news that they covered the distribution in the period, expect an even stronger next period, and plan to close the one outstanding acquisition by end of month are all very positive. The reference to a 6th S-4 amendment is likely just to add the results from the quarter, as they must do. GLTA
I have never been good at predicting where a stock will go short-term, but this one is likely to go up nicely over time and continue to deliver its healthy monthly distribution along the way.
Out this morning. No price target provided by FlyOnTheWall. I presume this means they feel the same about LINE since they are pretty much one in the same.
Received my electronic proxies today and enjoyed voting my shares against Icahn's proposal. He already made himself look foolish by demanding $150B and then asking for $50B when the rubber met the road. He should have stopped there, but he just couldn't help himself but to look like an even bigger fool by have shareholders publicly flog his recommendation with a no vote.
Cramer has been all over the map. He's too emotional with his investments for my taste. He touted LINE as a very well managed business when he started buying. Now, he is selling it because he says they are poorly managed. If he makes money, he makes up reasons why he was right. And, when he loses money, he makes up reasons why it wasn't his fault. It's just how he rolls. I like the 10%+ distribution at this level and will continue to add if it goes lower. Once they start getting the BRY deal synergies figured out, the stock should do just fine.
You have never received a dime because the attorneys are truly in this for a quick settlement. Usually, the law firm demands that the Company change some wording in their disclosures to make it all look like the suit achieved something so the judge will approve a fee. It truly is a scam that costs shareholders money.
Solid report following a weak past period. However, people selling news will dominate this morning. Buyers will wait to hear call. Let's face it, why buy before? We are ex-dividend today, so no hurry there. Some important insight could be gained by the call. Personally, I think we start trading up as the call approaches and selling subsides. Then, it all depends on what they say.
Assuming those on this board like dividends, I would suggest you look at the VALE report this morning. The headline re: EPS is very misleading. Underlying results were very strong and guidance suggests a stronger back half of year. Stock has been slammed in recent months. Just a thought for anyone interested.
Wow. Did he really say that because it is does not represent at all what he is telling his Action Alerts subscribers. What he is telling them is that he is being disciplined in not owning a company with SEC issues, but he believes their assets are worth $40 per share (so they are cheap) and he believes the recent S-4 filing suggests the BRY deal will get done.
The big funds who are going to dictate the direction of the stock do their own research. As such, they have the same two questions everyone else should have based on the news flow. First, to what extent do the China sales results, in combination with their other information, give them confidence AAPL will beat estimates for Q1 and the magnitude of that beat? And second, to what extent should they be concerned about the reported reductions in Apple orders for parts from suppliers? In my mind, the 2M China units certainly help build on the idea that AAPL will deliver big in Q1. However, I haven't seen any information to help figure out whether Apple has truly cut future build orders or, if they did, why and what impact on forecasts should it have? If this second question can be resolved favorably, we break out IMO. If not, maybe the China data stops the bleeding and gives us a little bounce until the second question is answered. I am delighted Cook came out tonight and made it a point to announce the China data. I view it as his way of saying, "look, enough is enough. Things are just fine. Don't worry."
Sentiment: Strong Buy
If the likes of Cooperman can rally a few of their buddies into taking a shine to this situation, they can squash Hedgeye and their cronies like a bug. There is simply no way the shorts have the financial resources to play the game here, if the big boys go long.
I would think we would wake up to updates from one or more analysts. And, since the "credible" analysts have all remained constructive even during this period of adversity, I would think they would be highly motivated to gloat a bit and be very positive supporting a continuation in the stock price. So, I would think the stock goes up to the low $30's from here, whether tomorrow or next week once people have had a chance to absorb the new information and re-run their models.
Yes, it's very good for LINE shareholders.
If the SEC clears the S-4, this should be a catalyst for LINE stock. The completion of the deal should be a catalyst both because it would be accretive and, at minimum, secure the distribution. And, if management were to stick to its original plan of increasing the distribution from $2.90 to $3.08 per unit upon completion of the deal, it would be another catalyst.
IMO, if the SEC clears the S-4, the deal will get done and these catalysts will all fall in line. It may still happen at the 1.25X since LINE stock should rise with the S-4 clearance and BRY may actually fall towards the expected deal value per unit. Also, BRY has a nearly $2 per share break-up fee they would owe if the deal failed because their shareholders didn't approve it ($84 million that they do not have without borrowing it). But, if it gets done at a ratio somewhat higher, it's doesn't change the ultimate value of the combination materially IMO.
Both may be right. The SA guys appear to be right on the non-substantive minutia of fine accounting principles and Kramer appears he will be right on the substantive issues that the distribution is safe and the BRY deal will ultimately get done. Time will tell.