Monday, 06 August 2018 09:03

The Lingering FAANG Bull Case

(San Francisco)

Tech stocks have been through a rough patch, FAANGs especially. Facebook has been absolutely obliterated, while Netflix has had some steep falls. But is there still a bull case for the FAANGs? Barron’s says yes. Given Apple’s great numbers recently, the FAANGs have a little bit of momentum back. The core of the argument is dead simple—FANG stocks (leaving out Apple) are still growing at 35x the rate of the broader market, so it is hard not to see them rising. The article argues that the group is a generational trade that captures the growth of the internet.


FINSUM: When you get right down to it, the business models of the FANGs (lets leave Apple aside for a moment because it is a very different business) are very solid. We think investors will come around to that sooner rather than later.

Published in Eq: Large Cap
Tuesday, 31 July 2018 08:56

The Whole Market Hinges on Apple

(San Francisco)

Apple’s earnings are always a big deal, but it is hard to remember a time where they were more important than right now. The tech sector, include the FAANGS, of which Apple is a member, have been getting routed. The Nasdaq has fallen strongly as a result of this, but the Dow, of which Apple is the only FAANG member, has held up reasonably well. The market is getting increasingly anxious about how tech stocks might affect the whole market, and how the sector performs seems like it is being taken as a bellwether for the economy. Thus, all now hinges on Apple.


FINSUM: If Apple puts in good earnings, then the market might stay strong and consider tech’s issues isolated. If Apple’s earnings are poor, it could lead to a broad selloff.

Published in Eq: Large Cap
Friday, 29 June 2018 09:39

“Apple Prime” is Coming

(San Francisco)

In what could be a major development for super power Apple, it was reported yesterday that the company was inching towards “Apple Prime”, or some sort of bundled service model similar to Amazon Prime. The company may combine news, magazine articles, and television into a single bundle. Some analysts say Apple needs to increase its service-based revenue, such as that built on monthly subscription fees, in order to continue to expand.


FINSUM: If Apple wants to keep growing at 5%, it needs to add the equivalent of a Fortune 200 company every year. That is a huge revenue goal, and this could be a way to do it.

Published in Eq: Large Cap
Wednesday, 28 February 2018 08:17

Apple Debuts New iPhone Lineup

(San Francisco)

Apple is set to release, not one, not two, but three new iPhones later this year. Bloomberg describes the phones this way, saying “the largest iPhone ever, an upgraded handset the same size as the current iPhone X and a less expensive model with some of the flagship phone’s key features”. The iPhone X has not sold as well as forecast, and there has been consumer pushback on price, which may have led to the change in lineup. “This is a big deal”, says a venture capitalist and Apple commentator, “When you have a measurable upgrade in screen size, people go to update their phone in droves. We saw that with the iPhone 6, and we think this is setting up to be a similar step up in growth”.


FINSUM: We think this is a smart strategy, but we are surprised that Apple is caving in on pricing.

Published in Eq: Large Cap
Wednesday, 21 February 2018 09:41

Apple’s New Revenue Renaissance

(San Francisco)

It is hard to overstate how well Apple is doing right now. Despite flat volume in phone sales, the huge prices of its devices mean not only are its revenue and profits surging, but it now commands its largest ever share of the smartphone market (51% globally). The company’s first quarter revenue was up 13% from last year, with net income hitting a jaw dropping $20.1 bn in the first quarter. Apple now commands 76% of all smartphone revenue in the US.


FINSUM: Apple’s ability to compel consumers to pay exorbitant prices for its product is a sign of strength for the overall business. Imagine if the iPhone X had actually been a hit?

Published in Eq: Large Cap
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