AAPL

Best Idea Apple Exemplifies Valuentum’s Methodology: Is it a Value or Growth Stock? Both…It’s a Valuentum Stock

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On Tuesday, Apple (AAPL) posted excellent first-quarter results by almost every measure. The iPad-maker had its highest quarterly revenue and earnings ever and set all-time records for iPhone, iPad, and Mac sales. The performance also relieved some concerns regarding the leadership transition to new Apple CEO Tim Cook following the passing of legendary innovator Steve Jobs. Though we continue to hold the firm in the portfolio of our Best Ideas Newsletter, we may look to trim our position and take some profits in coming weeks. Our above-market fair value estimate for Apple remains unchanged. The company blew by consensus expectations pretty much across the board: revenue ($46.33 billion), gross margin (44.7%), and earnings per share ($13.87). Apple sold a whopping … Read more

New Highs for Apple: Delayed Not Canceled; Fiscal Fourth Quarter Merely a Timing Miss

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Perhaps the most valuable thing investors can learn is that stock prices are determined by future (not past) expectations of a firm’s business fundamentals, and by extension, its future free cash flow stream. The uncertainty of the future–and not the certainty of the past–is what drives stock prices and their volatility (after all, if the future were known with certainty, stocks would trade at precisely their known fair values). This consideration is important as we evaluate Apple’s (AAPL) fiscal fourth-quarter results, which came in lighter than what the Street had been expecting. Despite the miss, the iPhone-maker guided its fiscal first-quarter above consensus estimates, which should and always will trump any earnings miss as interpreted by the market in the previous quarter. Importantly, the last quarter (Apple’s fiscal fourth … Read more

Preorders for Apple’s New iPhone 4S Top One Million in Just One Day

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With concerns regarding a slowdown in orders for components related to the iPad, the release of Amazon’s (AMZN) Kindle Fire tablet, the passing of legendary Apple (AAPL) icon Steve Jobs, and general market malaise, Apple’s stock has come under pressure as of late. Though we note that these headline items have raised some concerns among the investment community, we maintain that Apple represents one of the most compelling valuation plays. Today’s news regarding preorders for the firm’s new iPhone 4S reinforce our valuation thesis on the company and have sent the shares soaring again. According to the Wall Street Journal, Apple witnessed roughly a 67% increase in pre-orders from the release of the now-legacy iPhone 4, assuaging concerns that the consumer is less than impressed with the … Read more

Best Idea Apple Reports Fantastic Third Quarter

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Apple (AAPL) reported its fiscal third-quarter results after the market close Tuesday, and they were fantastic. The firm’s top- and bottom-lines exceeded both consensus and our expectations, and we continue to believe that there is further upside to the shares. We added them to our Best Ideas List June 17, a trading session before its near-term bottom at about $310 per share. The stock surged to over $400 per share during after-hours trading Tuesday, and we will continue to monitor its trading activity in the coming weeks to see if taking a slice of our position off the table may be warranted. We will update our subscribers before we take any action. Apple posted quarterly revenue of $28.6 billion and earnings per … Read more

Apple Priced for Significantly Slower Growth

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This article originally appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/275395-apple-priced-for-significantly-slower-growth At Valuentum, we often use a discounted cash-flow model as a means to back into the current share price of firms in order to ascertain whether the market is unfairly pricing their stock relative to reasonable long-term growth and profitability assumptions. In Apple’s case, it appears that the market is certainly concerned about future growth rates, almost to the tune of merely expecting inflation-like expansion beginning toward the middle of this decade. Although in the land of technology, competition adapts quickly and a few years from now can be viewed as the distant future, Apple represents a compelling risk-reward opportunity at these levels based on our analysis. Often, evaluating a … Read more

Dividend Increases/Decreases for the Week Ending May 5

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Below we provide a list of firms that raised/lowered their dividends during the week ending May 5. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week American Campus Communities (ACC): now $0.44 per share quarterly dividend, was $0.42. Ameriprise Financial (AMP): now $0.83 per share quarterly dividend, was $0.75. Apple (AAPL): now $0.63 per share quarterly dividend, was $0.57. Arbor Realty Trust (ABR): now $0.18 per share quarterly dividend, was $0.17. Artesian Resources (ARTNA): now $0.2317 per share quarterly dividend, was $0.2283. Barnes Group (B): now $0.14 per share quarterly dividend, was … Read more

Top Research and Ideas You May Have Missed

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Is Quant Value Giving Intrinsic Value Investors a Bad Name? Surely, you don’t believe Warren Buffett’s “style” is out of favor? By Brian Nelson, CFA I need to make sure that you’re aware of something very important. The media and perhaps many investment professionals define the concept of “value” as companies with low price-to-book (P/B) ratios, and the concept of “growth” as companies with high price-to-book ratios. This definition of “value” and “growth” and their corresponding returns have been magnified in writings throughout the media and across quantitative research, even in prestigious journals. Warren Buffett has been rallying against most quantitative applications and how “growth” and “value” are defined in popular media and quantitative research for decades.  Here’s one of the Oracle’s most … Read more

Answering Some Questions from Our Members

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Image Source: Eric By Callum Turcan and Brian Nelson, CFA Let’s answer some questions we received recently from our members. Please note that the wording of some of the questions was modified somewhat for clarity. Question: What do you think about Moderna (MRNA), as their mRNA technology can be used for far more than just Covid-19 vaccines? Answer: We are simply amazed at how fast the pharmaceutical industry, in conjunction with various partners and government programs (Operation Warp Speed and others), discovered a safe and viable vaccine for the coronavirus (‘COVID-19’). Moderna was key to making that possible after its COVID-19 vaccine received emergency approval from the US FDA in December 2020. With a vaccine efficacy of 94.1%, Moderna really was … Read more

GE Hikes Payout; Digital Transformation to Benefit Income Investors

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Image source: GE website Income investors cheered as Best Ideas and Dividend Growth Newsletter portfolios holding General Electric (GE) raised its quarterly per share dividend $0.01, or 4%, to $0.24 per share December 9. The move is consistent with its multi-year capital allocation strategy to have a dividend payout ratio of 45%-50% and then grow the payout in line with earnings once the targeted dividend payout ratio is hit. The increase, however, reflects a payout ratio above the upper bound of management’s target ratio based on consensus estimates for 2017. We like what the payout growth signals for income-minded investors, and management looks to be set in continuing its shareholder-friendly ways beyond its planned return of $30 billion in cash … Read more

Where Are the Safe Havens?

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“We believe that staying diversified as in holding a broad swath of ideas as in either the Best Ideas Newsletter portfolio or Dividend Growth Newsletter portfolio as the equity portion of one’s allocation makes a lot of sense in any environment…High yield dividend investing may become more and more popular in coming years as rates across the globe approach 0%, and the amount of negative-yielding debt proliferates.” — Brian Nelson, CFA By The Valuentum Team The Federal Reserve is weighing all its options as it assesses how to balance global economic weakness and strong performance in the US, pressure from the White House to aggressively cut rates, and a 30-year yield that puts the federal funds rate at the highest … Read more