The 1 main reason (other smaller ones) investors are nervous going forward is that Apple is so big it is very difficult to maintain an attractive growth rate. Historically, ALL very, very large companies have this problem without exception. Google will also have this problem - just not yet. For a many months last year when the stock was going to $700, the rise was not based on logic but a musical chair game. Now the market is looking for a safe, provable value, and the stock will stay in "show-me" mode each quarter rather than assuming earnings growth, as occurred when it was a smaller company.
" fair share of taxes" is the amount owed under the law. Do you make extra contributions more than the law says that you owe?
Well, there is a limit as to how much cash they will want to hand out. Management has already adopted a strategy of maintaining a very large contingency fund. It would be a lot simpler, and less costly to just keep buying back stock at the dips and increase the dividend faster than earnings for a couple of years or so. Classic battle between long-term horizon and the many ultra short-term investors. But, for this (common only) to satisfy investors, they need to believe in the talent and vision of management. At this time, this belief has become weak.
Well, the market is a guessing game of not only fundamentals, but investment sentiment. When a strong positive momentum builds it grows faster than it should because there are so many investors that believe they are so smart that they can ride the wave up and get off near or at the peak. As a result, very serious gamesmanship develops as to when to get out (because selling is akin to musical chairs), which causes a rather severe and sudden decline the minute there are any signs of a peak or decline in fundamentals. Add to this the large amount of money that attempts to earn a profit on any movement in price up, or down (short-selling), and you see the result.
Hard to say. My wife and I own Samsungs and never would have purchased Apple phones unless the price was MUCH lower. Just not a place we choose to waste our money.
As we all know, the single most important step in valuing a stock is projecting future earnings. We know how great Apple earnings have grown in the past. For some reason, the current management of this company has done a very poor job at convincing anyone, including themselves, what their FUTURE earnings will look like. And, this is the problem. Do you know for sure what their future earnings will look like?
Part of the story is how amazingly fast Samsung has added such a large smart phone market share in the US and worldwide. How could a really good competitor allow this to happen this fast? The other story is that the iPads, though a great and innovative product, are very easy to copy just like the PC was. This new competition is now really gearing up. There is no doubt that Apple can earn a profit, but now that competitors are taking market share in earnest, what future earnings per share can be expected. The scary part is how fast this industry changes.
Management needs to communicate, in concrete terms with unit sales, prices, margins and admin. costs, how they can maintain a consistent $50/share in earnings going forward.
rwilson31781 You need to commit to what you believe is going to happen. Anyone can say it might go up or it might go down. Either you believe it will continue to go down significantly or not. If you really believe it will go down, then you should sell now. Later, after the stock goes down ( "bottoms") you can look at all of your options and decide if it is a good investment at the new price. If you believe the decline is very temporary, then it may make more sense to just hold on and wait for it to go up. This is an example of double-talk and you are not the only one.
It seems strange that GAAP would have us believe that MHC has a real claim on the retained earnings of CFFN based on the 70% of stock that is owned by MHC. The first annual report after the reorganizatin explictly states that the cumulative dividends waived by MHC (of course by decision of same board members that have over $20 million in CFFN stock) are considered a restriction on the retained earnings of CFFN (effectively a reduction in BV for public shareholders). But subsequent reports do not mention this. In so much as two separate stock classes were not established (which they should have done to keep things clear) it seems the accounting used in these mutual conversions is really suspect and the SEC, FASB, and OTS need to clear this up. After all there are publicly traded shares involved.
How can the dividend from a publicly traded stock be tax free? Let me know how this trick works. Thanks.