• 3 hours Renters Are Striking As COVID Reshapes Real Estate
  • 11 hours Nothing Can Stop The Tesla Boom
  • 1 day 9 Ways The Lockdown Is Playing Out Around The World
  • 1 day WeWork Sues SoftBank For Withdrawing $3 Billion Insider Payoff
  • 2 days Solving Transportation’s Biggest Problem
  • 2 days Big Banks Could Win Big On Fed Small Business Bailout
  • 2 days Trump Increases Pressure On Venezuela
  • 2 days Researchers Create Organic Battery
  • 3 days Gold Is Still A Safe Haven, But Not Very Alluring
  • 3 days China Is Buying Up Billions Of Barrels Of Cheap Crude Oil
  • 4 days Are Gold Stocks Going To Bounce Back?
  • 4 days The Politics Of A Pandemic
  • 5 days What Does CHina’s EV Slowdown Mean For The Battery Metals Sector?
  • 6 days COVID Report Cards Will Brand Businesses Forever
  • 6 days Trump Tweet Sends Oil Soaring 25%
  • 7 days Why The Coronavirus Economic Crash Is Worse Than You Think
  • 7 days Is A Global Currency Necessary?
  • 8 days America Has Shed 500,000 Millionaires Since The Coronavirus Lockdown Began
  • 8 days Trump Wants Another $2 Trillion Economic Intervention
  • 9 days The Surprising Businesses Deemed “Essential” During The Coronavirus Lockdown
Trump Increases Pressure On Venezuela

Trump Increases Pressure On Venezuela

The U.S. is not backing…

Researchers Create Organic Battery

Researchers Create Organic Battery

Researchers at Uppsala University have…

Solving Transportation’s Biggest Problem

Solving Transportation’s Biggest Problem

The pressure is growing across…

Michael Scott

Michael Scott

Writer, Safehaven.com

Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

Contact Author

  1. Home
  2. News
  3. Breaking News

Buffett’s Massive Bet On Apple Makes Sense

Apple

Apple was up almost 4 percent in afternoon trading Friday, closing in on its all-time high as Warren Buffett’s Berkshire Hathaway gave it another big nod by buying more of the tech giant’s stock.

Buffett told CNBC that Berkshire Hathaway had added another 75 million Apple shares it its portfolio, bring the entire holding to more than 240 million shares.

(Click to enlarge)

While everyone else is “obsessing” over missed iPhone X sales targets, Buffett sees things differently, and his comments move markets, as they did for tech today. In fact, Buffett said, the narrow-minded focus on the iPhone X sales “totally misses the point”.

And some think Buffett still isn’t done with Apple:

"I don't think he's done. I think the numbers of the investment in Apple are going to go higher and maybe even significantly higher," David Rolfe, CIO of Wedgewood Partners, which counts Berkshire and Apple as its two largest holdings, told CNBC.

CNBC’s Jim Cramer said that Buffett “thinks young”.

"Analysts after analysts said if you look at the mosaic of [iPhone] orders, it's got to be a bad quarter," but Buffett “obviously does not think about the quarter. He thinks of this as a consumer products company with 99 percent satisfaction."

Apple released its earnings report on 1 May, and the overall verdict was that the iPhone X isn’t really faring so poorly.   Related: Banking Giants Forced To Pick Sides In Saudi-Qatar Rivalry

Revenue growth was 16 percent, while EPS growth was 30 percent and dividends were raised by 16 percent. To top it off, Apple announced a new $100-billion share buyback program.

“Our business performed extremely well during the March quarter, as we grew earnings per share by 30 percent and generated over $15 billion in operating cash flow,” said Luca Maestri, Apple’s CFO.

“With the greater flexibility we now have from access to our global cash, we can more efficiently invest in our US operations and work toward a more optimal capital structure. Given our confidence in Apple’s future, we are very happy to announce that our Board has approved a new $100 billion share repurchase authorization and a 16 percent increase in our quarterly dividend.”

Apple will complete the execution of the previous $210 billion share repurchase authorization during the third fiscal quarter.

And if you read the earnings details closely, you might just start to see where Buffett is coming from: This isn’t just about the iPhone X. There’s much more.

For starters, we learned that Apple’s headphones (Beats) and the Apple Watch—in other words its ‘wearables’ segment, earns than either Ebay or Netflix. Apple also has twice as many subscribers as Netflix, reporting 270 million.

Services revenue and accessories revenue also saw sharp spikes.

By Michael Scott for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment