Thursday, February 21, 2013

My case for Apple or against......

Not long ago apple hit a new high of 705.07 and as I mentioned in the Google post very soon after it started to trade where it is today 446.06 today's close

Apple has 137 billion in cash right now (link below).  Some investors have suggested that an increased dividend will be good for the company and the share holders.  I disagree and I will explain.

Apple offered a Dividend which doesn't mean it’s still not a growth stock but, I have to wonder should it be a telling sign.  They didn't offer a dividend over the years because they wanted to reinvest everything and the benefit to the shareholder would be the rise in stock price.  

If the dividend were to rise from it's current point I believe that they are telling us the innovation is over and they won't truly be a growth company anymore.

As mentioned in the Google post Growth stocks in my opinion with too much excitement are bound to have more scrutiny and the slightest miss step could lead to a tumble in price. This was true of Apple, but Google has better prospects as I see constant innovation over the years.  Google also has the ability to enter new markets and become market leaders in a short time just look at Android.

Android took over the market place.  Phones and tablets are cheaper and have great software.  Apple seems to be losing market share on a quarterly basis.  There is too much competition and Apple doesn't have the same immensely high profit margins anymore.  

iOS is starting to become buggy (have an Ipad and 1 Ipod, plus I use iTunes and have had a lot of problems recently.  The software was flawless years ago and I'm wondering why updates seem to be of lesser quality.

Are they out of new ideas, they were innovative and that's what drove growth.  They need new innovation and that iwatch isn’t going to cut it in my opinion.

Just some thoughts you decide.  Remember facts change every day so this is my opinion as of this post what do you think?  Also if the facts change reevaluate your opinions.



(I do not own nor have I ever owned Google or Apple)

These are both stories on the topic of apple and their cash surplus

Apple link - Einhorn strategy

Einhorn part 2

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