Apple's (AAPL) a Peach With or Without Jobs - Barron's
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Price: $283.78 +3.14%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
Revenue Growth %: +15.8%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
Revenue Growth %: +15.8%
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Skeptics have begun talking about what will happen to Apple (Nasdaq: AAPL) as its longtime CEO and visionary Steve Jobs steps down and Tim Cook takes the rains.
Many anticipate that the company will suffer due to a lack of innovation and drive. People feel that Mr. Jobs thinks ahead of his time and don't believe that he can be replaced.
Others also feel that Apple has a strong structure with a sound workforce. Over time, Apple has developed into a company that is going to take more than just one person leaving to be broken apart.
Initially, shares fell on the news of his departure, but since then have regained all of the losses plus some. Some rumors and talks began right away that management would issue a dividend or announce a large buyback of shares to shake some of the fear with the departure of Mr. Jobs. Tiernan Ray, a journalist at Barron's, notes that as long as Mr. Jobs stays on the company's board as head Chairman, it is most likely that the company will not issue any dividends or buybacks. The company currently has $76 billion in cash alone or $82 per share.
Apple has built solid relationships with a lot of its suppliers which has allowed them to capture the title as the world's largest buyer of semiconductors. These relationships have been reassuring to investors while Mr. Jobs has been on leave and made it so the company had no major problems during that time.
Ray argues that Apple has been "running like a well-oiled machine even when Jobs was on leave". In addition, competitors are preoccupied with Google (Nasdaq: GOOG) recently acquiring Motorola Mobility (NYSE: MMI) and HP (NYSE: HQP) announcing plans to leave the PC market. Nokia (NYSE: NOK) and RIM (Nasdaq: RIMM) are in the restructuring stage as they plan on implementing new operating systems into their products. All of the above competitor issues can be attributed to Apple.
However, at least one technology bear doesn't see Apple being left out of a cataclysmic late phase of the long-term secular bear market in tech. Barron's Roundtable member Fred Hickey said it isn't the right time to bet on Apple. "He is a bigger person than many people understand," he said. "I don't think [newly appointed CEO] Tim Cook would have been able to convince people to buy the iPad."
Ray said while a fair point, Apple's products are desirable because they are "simple and straightforward, not mystical." Also, he said in marketing "don't be shy in talking about how much more exciting it is than the competition." He said it will take guts from Tim Cook to follow these principles.
What kind of guts do you have Mr. Cook?
Many anticipate that the company will suffer due to a lack of innovation and drive. People feel that Mr. Jobs thinks ahead of his time and don't believe that he can be replaced.
Others also feel that Apple has a strong structure with a sound workforce. Over time, Apple has developed into a company that is going to take more than just one person leaving to be broken apart.
Initially, shares fell on the news of his departure, but since then have regained all of the losses plus some. Some rumors and talks began right away that management would issue a dividend or announce a large buyback of shares to shake some of the fear with the departure of Mr. Jobs. Tiernan Ray, a journalist at Barron's, notes that as long as Mr. Jobs stays on the company's board as head Chairman, it is most likely that the company will not issue any dividends or buybacks. The company currently has $76 billion in cash alone or $82 per share.
Apple has built solid relationships with a lot of its suppliers which has allowed them to capture the title as the world's largest buyer of semiconductors. These relationships have been reassuring to investors while Mr. Jobs has been on leave and made it so the company had no major problems during that time.
Ray argues that Apple has been "running like a well-oiled machine even when Jobs was on leave". In addition, competitors are preoccupied with Google (Nasdaq: GOOG) recently acquiring Motorola Mobility (NYSE: MMI) and HP (NYSE: HQP) announcing plans to leave the PC market. Nokia (NYSE: NOK) and RIM (Nasdaq: RIMM) are in the restructuring stage as they plan on implementing new operating systems into their products. All of the above competitor issues can be attributed to Apple.
However, at least one technology bear doesn't see Apple being left out of a cataclysmic late phase of the long-term secular bear market in tech. Barron's Roundtable member Fred Hickey said it isn't the right time to bet on Apple. "He is a bigger person than many people understand," he said. "I don't think [newly appointed CEO] Tim Cook would have been able to convince people to buy the iPad."
Ray said while a fair point, Apple's products are desirable because they are "simple and straightforward, not mystical." Also, he said in marketing "don't be shy in talking about how much more exciting it is than the competition." He said it will take guts from Tim Cook to follow these principles.
What kind of guts do you have Mr. Cook?
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