Displaying items by tag: Apple

Thursday, 18 January 2018 11:31

Apple Reputation is Waning like Its Batteries

(San Francisco)

The fallout from the revelation that Apple’s operating systems drain the batteries of older model phones appears to be hammering the company. The company admitted they deliberately slowed down the performance of older phones to keep them from crashing. The admission has led to widespread criticism and lawsuits are headed the company’s way. Apple has tried to mitigate the issue by cutting prices for replacement batteries and offering free software to check battery health.


FINSUM: We have this fear that this battery and performance scandal might be the beginning of the end of the golden age of Apple.

Published in Eq: Large Cap
Tuesday, 16 January 2018 12:14

Why the FAANGs Have Room to Run

(San Francisco)

While most publications have been running stories arguing that it may be time to get out of the FAANGs, Barron’s has a run a piece to the contrary, saying that they have more room to run. While the piece admits that the group of stocks is under a lot of pressure and is highly priced, it contends that it is not time to pull out yet. The argument is that despite accusations of misbehavior and threats from Trump, the sector will remain the centerpiece for growth investors. If the economy continues to chug (meaning stay under 3% growth), then tech’s steady growth will remain attractive.


FINSUM: We tend to like this view. Despite how richly these companies are valued, we think there is still room for medium-term value growth as regulation is still a way off and their fundamental businesses are solid.

Published in Eq: Large Cap
Tuesday, 09 January 2018 09:34

Apple Faces Major New Probe

(San Francisco)

The risks of regulation on Silicon Valley are rising. Fake news and data leaks have raised the suspicion of media, consumers, and government, and just yesterday Apple’s shareholders called for an investigation into iPhone addiction and mental damage in children. Now, without even a day’s rest, there is a another major probe into Apple. This one is coming out of France and surrounds the allegation that Apple deliberately worsens performance in older phones. The company faces criminal charges for the behavior.


FINSUM: So this could go both ways. If France finds something, it could turn into a global PR nightmare that could really hurt the company. However, we are not sure how much information France will actually have access to, so it may turn out to be nothing.

Published in Eq: Large Cap
Tuesday, 09 January 2018 09:33

Time to Dump Your FAANGs

(San Francisco)

There is no doubt about it, the FAANG stocks—Facebook, Apple, Amazon, Netflix, and Google—were a huge force is delivering 2017’s great return. But it might be time to remove them from your portfolio, at least as Barron’s argues it. And if not removing them, then at least reducing exposure. The stocks count for a huge portion of many funds, so investors may have more exposure than they realize. The stocks have seen a massive run-up in valuation, but that makes them look increasingly vulnerable. Barron’s also cites the increasing risk of regulation of the sector, which could prove a weight on values.


FINSUM: The tech industry has grown very large and dominant, and seems to have its own cycle versus the rest of the economy, all of which makes it very hard to call a top. There are some dark clouds gathering on the horizon, but nothing looks like it is imminently going to bring the FAANGs down.

Published in Eq: Large Cap
Monday, 08 January 2018 10:24

The Big New Regulatory Threat to Tech

(San Francisco)

The tech industry seems to be at the very early stages of a crackdown by regulators. At this point the talk is mostly in media and amongst the public (a few Trump tweets aside), but the push is coming, both on the back of fake news and of anti-trust concerns. Well, there may be a much more immediate threat now. Apple may be facing a near-term regulatory crackdown as its own shareholders are calling for a study into the link between the iPhone and smartphone addiction, especially in children. Apple shareholders Jana Partners and Calstrs are calling for a study to see if the phones are addictive and what negative mental effects they may have on children. Some researchers believe the young have a serious metal health problem related to smartphones, with one academic saying “It’s not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades”.


FINSUM: So Jana and Calstrs, who are calling for this, say it is better to deal with the issue now rather than later and that doing so will provide value to shareholders. If regulations on smartphones actually come to pass, it could change the entire industry.

Published in Eq: Tech
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