Today's big news is all about the AAPL action as an investor threatens to sue Apple, and Apple issues a statement. All over a proposal by Apple to eliminate preferred stock from its charter. But there's a lot more to the AAPL story right now.
We've rounded up some of the latest AAPL related stories.
Apple's gift to investors on Valentine's Day
Apple's latest dividend to shareholders will be payable on 14 February 14, 2013. To qualify, shareholders need to be of record as of the close of business on 11 February, 2013. Each shareholder will be eligible for a dividend of $2.65 (£167) per share.
By shedding investors, AAPL prepares for new growth
Stock specialist Cody Willard believes Apple is in the process of shaking out opportunistic investors who only bought in on the rampant ultra optimism of last year, according to a Market Watch report.
It's not lower prices or loss of competitiveness, it's higher costs
During the fourth quarter 2012 Apple’s margin fell to about 38%, a level not seen since two years earlier and down from a peak of 47% in Q1 2012. Does this lower margin foretell lower prices or a loss of competitiveness? asks Asymco's Horace Dediu.
"Obviously not," he states in an article called Margin Call.
"We can at a glance see that the cost of sales increased as a proportion of sales. Therefore the margin decreased as a percent of sales. The cause is higher costs, not lower pricing."
He adds: "Because, as everyone knows, costs of production fall as output increases. It’s due to something called the learning curve. It’s something that has happened for all of Apple’s (or anyone else’s) product launches forever."
Foxconn sales down
Apple supplier Hon Hai reports January sales are down
Hon Hai Precision Industry, parent company of Foxconn, the main manufacturer of Apple products, has said its January sales dropped 8.19 percent from a year earlier, reports Reuters.
What Apple should do to win over investors
According to Seeking Alpha, Apple should do the following:
- Raise your dividend by at least 50%. (Personally I would double the dividend.)
- Split the stock 5 or 10 to 1. "This will attract the retail investor who wants to buy 100 or 200 shares but cannot do so at current prices."
- Announce that the company plans to buy back 10% of the stock's float over the next two years. State that the policy will be to buy shares anytime the PE ratio breaks below 10…. Apple will not be below 10x earnings for long.
- Accelerate growth in China.
- Open a new front against Google.
AAPL best to weather market correction
A slowing improving economy and relief over the averted US tax hikes have pushed the Dow industrials and the S&P 500 indexes to five-year highs. But Saxo Bank chief economist Steen Jakobsen sees a correction coming soon, and he believes that Apple is one of the stocks that will weather than the best.
Jakobsen says he is not a great fan of the stock, but recent discussions about paying out cash drive home the point that the company’s big cashflow position is going to protect it in a downturn. Plus there is potential for more dividends and cashflow back to investors.
However, Jakobsen says the time is not right to go stock hunting just yet. "When you’re looking to buy is after the correction," he said