A weekly Saturday night financial show that attempts to predict market direction for the week ahead by looking at a variety of technical and fundamental indicators. This week’s show includes commentary on the Fed’s first and only rate hike in 2016, Eli Lilly’s long-acting Basal Insulin that’s now available in the US, takeover rumors circulating about Qorvo, Protalix Biotherapeutics $24 million order to treat Gaucher patients in Brazil, the FDA approval of Vericel’s Maci for the repair of cartilage defects of the knee, Silicon Motion’s supplying of SSD solutions to the Alibaba Group, and more.
June 17, 2016: Reportedly Apple iPhones were found to have violated Chinese rival’s parent LOL. That’s rich folks. The king of patent rip-offs China, who allowed fake iPhones to be sold for years, is now accusing Apple of violating China patents. So much for big-cheese Tim Cook’s visit to China recently.
iPhone 6 and 6-plus models infringe on patent rights owned by Shenzhen Baili because of similarities to its 100c phone, the Beijing intellectual property office wrote in its decision.
Apple can appeal the ruling and could be allowed to continue selling its phones during the process.
Original source to Beijing intellectual property office filing (in Chinese): http://www.bjipo.gov.cn/zlzf/zfjggg/201605/P020160609372965002381.pdf
More Apple News
June 13, 2016: Apple Inc’s annual rate of iPhones sales said to decline for the first time in 2016. iPhone annual shipments to fall for first time since 2007 this year due to lukewarm demand for a new model with shipments seen between 210-220 million.
Reminder: At the beginning of the year, Nikkei reported that Apple could lower its production of iPhone 6 by more than expected in the Jan-Mar quarter. In mid-April, Nikkei reported Apple would sustain its lower rate of production in the April-June quarter. On May 11th, Nikkei reported that Taiwan tech suppliers expected significantly fewer orders from Apple in the second half of 2016.
May 22, 2016: Apple Inc rumored to have requested up to 78 million units of iPhone 7 production from suppliers according to the Taiwan press. This is the highest in 2 years.
Apple Inc Industry sources indicating that chip orders from Apple in Q2 have been disappointing on year over year basis according to a report in the DigiTimes. Report adding there is no sign of a substantial rise in chip orders in Q3 despite the expected launch of the new iPhone.
Apple CEO Cook has met with India PM Modi. The talks addressed cybersecurity and data encryption, along with Apple’s plans for possibilities of manufacturing in India. This was CEO Cook’s first trip to India.
May 16, 2016: Berkshire Hathaway discloses latest quarterly holdings; new stake in Apple of 9.8 million shares according to a new 13 F-HR filing. CNBC reports the Apple stake was not taken by Warren Buffet himself, but by one of his lieutenants.
May 12, 2016: Apple Inc to invest $1 billion in China’s Didi Chuxing (direct competitor of Uber). Didi Chuxing announced today important progress in its latest fundraising round. Among a group of prestigious Chinese and international institutions, Apple has invested USD$1 billion in DiDi, creating the single largest investment the Company has ever received. Through this investment, Apple becomes a strategic investor of DiDi, and joins Tencent, Alibaba and other key supporters to help further DiDi’s mission of building a data-driven rideshare platform to serve hundreds of millions of Chinese drivers and passengers. Building on its data mining and analysis capabilities, DiDi now completes over 11 million rides a day on its platform, serving close to 300 million users across over 400 Chinese cities with a diverse range of mobile technology-based transportation options. DiDi works with over 14 million Chinese car-owners and drivers, holding over 87% market share in private car-hailing and over 99% market share in taxi-hailing.
– Follow Up: Apple investment said to boost Didi fundraising to $3.0B – financial press
May 06, 2016: Apple CEO Tim Cook is planning a visit to China this month to meet with Senior Chinese government officials in Beijing. On April 26th Apple Q2 earnings had a -26% decline in Greater China (steepest drop among the five regions). Apple is expected to take its latest trademark dispute over the iPhone name to China’s Supreme Court. Currently Xintong is allowed to use iPhone mark on goods.
China is trying to copy popular products in the US by ripping off their trademarks and technology. This is why the story of China’s economic power is a joke. China is a copycat, a poser if you will and that means their economy is built on a deck of cards. Their communism form of government does not foster an environment that allows the people of China to be able to intellectually compete with people from the US. This is why I seldom, if ever, invest in China. China’s economy has gotten where it’s at today by intellectual property and technology theft. That, my friends, is a house of cards waiting to collapse.
CEO Tim Cook should tell China that if they don’t enforce international trademark and IP laws, Apple will no longer make iPhone parts in China which will put thousands of Chinese people out of work.
May 03, 2016: In an earnings conference call, Greenlight’s Einhorn says he continues to hold stake in Apple Inc. and sees great value in the Apple brand.
May 1, 2016: It’s a good time to take a position in Apple imo. With the earnings and revenue miss last week, the stock has overreacted to the downside.
Folks, Apple is a buy while there’s blood-in-the-streets play. Check out the recent carnage:
– Goldman Sachs removed Apple from its Conviction Buy list
– Carl Icahn dumped the stock
– Barclay’s cut its price target
– Morgan Stanley cut its price target
– Oppenheimer cuts Apple stock to a Perform rating, from Outperform
– Nomura cut its price target
– Drexel Hamilton cut its price target
What caused all this ruckus?
Last Tuesday, Aprill 26, 2016, Apple reported Q2 2016 EPS of $1.90 versus the $1.97 estimate. Revenue also missed coming in at $50.6 billion versus the $52.2 billion estimate. Apple also lowered its Q3 revenue guidance to $41 – $43 billion versus the previous guidance of $45.8 billion.
iPhone shipments came in at 51.2 million versus 61.2 million from the previous year. iPad shipments also fell, coming in at 10.3 million versus the 12.6 million from the previous year. Mac shipments fell to 4 million versus the 4.6 million from the previous year.
Not only do I think that traders overreacted to the earnings report, there are two catalysts in-play.
The first catalyst is Apple’s dividend payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016. Why not capture that dividend if you can?
The second catalyst is the iPhone 7. Apple releases its new phone every year, in the second half of the year. Apple’s stock usually runs up in anticipation of the new release. We may have an opportunity to position early ahead of the seasonal new iPhone run up. There are also rumors that Apple will release more than one phone model this year which may help boost revenue.
Finally, as seen in the chart of Apple below, the stock is oversold and at horizontal support which could make for the last oversold RSI entry we will get before the seasonal iPhone 7 run-up. Just remember, don’t try and catch a falling knife. Look for a candle over candle entry.
Apple Inc. makes mobile communication and media devices, personal computers, and portable digital music players. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications.
It offers iPhone, a line of smartphones that comprise a phone, music player, and Internet device; iPad, a line of multi-purpose tablets; Mac, a line of desktop and portable personal computers; iPod, a line of portable digital music and media players, such as iPod touch, iPod nano, and iPod shuffle; and Apple Watches, personal electronic devices that combine watch technology with an iOS-based user interface.
The company also provides iTunes app and the iTunes Store; Mac App Store that allows customers to discover, download, and install Mac applications; iCloud, a cloud service; Apple Pay for making mobile payments; Apple TV, a portfolio of consumer and professional software applications; iOS and OS X operating systems software; iLife, a consumer-oriented digital lifestyle software application suite; iWork, an integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets; and other application software, including Final Cut Pro, Logic Pro X, and its FileMaker Pro database software.
In addition, Apple offers various Apple-branded and third-party Mac-compatible and iOS-compatible accessories, including headphones, cases, displays, storage devices, and various other connectivity and computing products and supplies. The company sells and delivers digital content and applications through the iTunes Store, App Store, iBooks Store, and Mac App Store; and sells its products through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers.