Apple shares enjoyed modest gains this morning after a solid earnings report yielding $10.3 billion in cash flow for the quarter. The stock rose $1.50 (1.5%) to $96.22 in early morning trading. 

For the fiscal third quarter ending June 28, 2014, Apple posted revenue of $37.4 billion and quarterly net profit of $7.7 billion, or $1.28 per diluted share. That compared to revenue of $35.3 billion and net profit of $6.9 billion, or $1.07 per diluted share, in the year-ago quarter. More importantly, the company's margins are back on the rise: Gross margins climbed to 39.4 percent compared to 36.9 percent in the year-ago quarter. 

Apple CEO Tim Cook said that iPhone and Mac sales fueled the growth and resulted in the strongest profit growth in seven quarters. The company returned $8 billion in cash to shareholders through dividends and share repurchases during the June quarter.

This entry was posted on Wednesday, July 23, 2014 at 14:05 pm and is filed under Mobile, Investing.
Keywords: Apple, Tim Cook, iPhone, Earnings, Carl Icahn

The Rayno Report model portfolio, based on an analysis of growth stocks that trade with a reasonable valuation based on a price/earnings/growth (PEG) ratio, continues to outperform the major indices with an average gain of 14% this year (or 14.4% to be exact).

In January we announced our new picks, as we do every year. The portfolio has a record of beating the market overall since 2004, and it has never had a down year. Our lower risk PEG-based model portfolio has roared ahead this year, showing the staying power of an approach that uses valuation discipline. The overall 14.4% gain on the portfolio would have been achieved with a fully invested portfolio. With only 50% of the cash invested, (as we recommended at the start of the year), the portfolio would be up 7.2%. 

In contrast, the S&P 500 Index is up 6.18% year-to-date (YTD), which means the portfolio beat the S&P 500 even if half of it had been kept in cash. This adheres to our lower risk approach of investing less as the market climbs. 

This entry was posted on Thursday, July 10, 2014 at 14:51 pm and is filed under Investing.
Keywords: Model Portfolio, Stocks, Apple

Apple’s former founder Steven P. Jobs  said customers wanted to own their music. Not anymore. Music downloads are slowing, which may be behind Apple (AAPL) attempt to make a big new music deal.

There are two numbers that you need to pay attention to in order to make sense of Apple’s rumored acquisition of Beats Electronics. Neither of them is the alleged $3.2 billion price. The numbers are 13.3 and 800 million.

This entry was posted on Wednesday, May 14, 2014 at 12:15 pm and is filed under Digital Media, Investing.
Keywords: Apple, Beats, Music Downloads, Music Streaming, Spotify

The buzz of the morning is Apple is considering Buying Beats, the fashion-driven headphones company founded by producer and rap artist Dr. Dre and music mogul Jimmy Iovine. And lots of people think Beats headphones are terrible, with mediocre manufacturing quality.

There are a lot of critics out there. The Beats-hating is so real that there is a Website called Check it out.

Of course, the deal is just a rumor at this point. Reports say Apple is considering offering $3B+ for the company, which also has a streaming media service. What's interesting is that almost every news article makes a reference to the universal disdain for the quality of the product.

This entry was posted on Friday, May 09, 2014 at 11:32 am and is filed under Digital Media, Investing.
Keywords: Apple, Beats, Dr. Dre

This morning Apple Inc. established more world domination in the apps market, announcing it had generated over $10 billion in revenue in the Apps Store in 2013.

Apple cited hits like Ellen DeGeneres’ Heads Up, ProtoGeo’s Moves, Simon Filip’s Afterlight and Kevin Ng’s Impossible Road. It also credited some big hits such as Candy Crush Saga, Puzzles & Dragons, Minecraft, QuizUp and Clumsy Ninja, as well as naming some "developers to watch" including Duolingo (United States), Simogo (Sweden), Frogmind (UK), Plain Vanilla Corp (Iceland), Atypical Games (Romania), Lemonista (China), BASE (Japan) and Savage Interactive (Australia).

Given the importance of the developer community to the emerging mobile ecosystem, as we stressed in our Open Source Gone Wild story from this morning, this is a significant sign of Apple's health in the mobile app market. However, investors were non-plussed, as Apple sank about $5 on the news, recently trading around $539. 

This entry was posted on Tuesday, January 07, 2014 at 20:50 pm and is filed under Mobile, Digital Media, Investing.
Keywords: Apple, App Store, Developers, Smartphones, Tablets

It's in! In a tradition I have executed since 2007, I present the Rayno Report model portfolio. 

We had a so-so year in 2013, achieving an 11% return (including dividends) but trailing the indices badly, but that's okay. I kept intact the track record of never having lost money. The portfolio has a 15% annualized return since 2007, so it is still outperforming in the long run.

How are the picks selected? I have six "master lists," from which I glean ideas. These include several different stock-screening tools as well as the financial media (for example, I've often found good ideas in the page of Barron's, usually in the section with the interviews with top fund managers).

This entry was posted on Friday, January 03, 2014 at 15:09 pm and is filed under .
Keywords: Portfolio, Stocks, Apple, IACI, Gold, PEG

Watch how a stock reacts to the news, not the news itself: this is an old trader's saying. Apple shares are displaying some resilient strength this morning following an earnings report that was interpreted both positively and negatively last night. 

This may be a sign that people got too negative on the stock as Apple shares plunged from $700 to $400. It's now bounced back to near $540, with shares are up $7 to $537 ahead of trading this morning. 

This trend now has the potential to feed on itself, as overly negative analysts are forced to revise their forecasts upwards, as is starting to happen this morning. Several analyst firms including Goldman Sachs and Cowen & Co. have alluded to this in their research notes. 

Apple reported profits that beat analyst estimates by about .30 cents per share, though some anlaysts and investors griped that it's projecting flattish profits for its upcoming holiday quarter. In the pre-market hours, however, Apple's stock is strong following a sprinkling of analyst upgrades.

The Cupertino, Calif.-based purveyor of all things "i" reported posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per share. These results compare to revenue of $36 billion and net profit of $8.2 billion, or $8.67 per diluted share, in the year-ago quarter. Gross margin was 37 percent compared to 40 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue. 

This entry was posted on Tuesday, October 29, 2013 at 13:15 pm and is filed under Mobile, Investing.
Keywords: Apple, iPhone, iPad, Tim Cook

I've be doing a lot of work on Apple, including providing some analysis to other sites such as, where you can check out my latest anaylsis of Wall Street's reaction to Apple's new product announcements here.

But there's lots of things going on with Apple, and of course there is the nonstop chattering of pundits about what they will do next. And with Carl Icahn getting a lot more involved -- he tweeted today that he has sent another letter to Apple CEO Tim Cook  -- one could see the "vaunted" catalyst that might moving Apple stock higher again.

It seems as if the company is at a key point in it's history. Will it move forward or start to stagnate as it hits a new product slump? Investors are certainly looking for new spark.

Everybody seems to want new products and change. Of course, this is obvious, but the better question is, what's realistic? Here is just a sampling of stuff that's floating around:

Apple TV: Everybody seems to be crying for it, but we're not even sure what it is. They are reportedly working on a mondo, high-end TV that everybody would want. But does Apple really want to be in the high-end TV business? It's a famously commoditized area. I would file this under speculation and not something you will see soon.

More, better tablets: This was a big component of Apple's product release this week. But was it enough? It's no secret that Apple has been under assault in the tablet market -- it's been losing market share in the fastest growing market it's in.

Personally I think Apple needs another product -- something between the iPhone and the iPad mini 2, in the "phablet" market, to compete with the onslaught of various-sized phones from Samsung. Analysts point out that iPad margins and regaining market share in the tablet market are two of the most critical goals for Apple right now.

Tim Cook: They're all asking -- is he the right leader? Cook continues to manage well operationally, and Apple is throwing off a ton of cash, but all of the product announcements have been incremental in nature while everybody screams for something more. Maybe he has a trick up his sleeve, maybe he doesn't. At any rate, he's been at the helm for about two years, and I give him one more year before he comes up with something big or the Apple mob (investors and customers) becomes more vocal.

All that cash: What will Apple do with all that cash? Activist investors such as Carl Ican are screaming for Apple to release more of its cash stockpile, well over $100 billion in cash and long-term investments, while the company throws off nearly $50 billion in annual cash flow. There are many options such as increasing the dividend and share buybacks. I would expect more of both by the end of the year.

The stock price: Apple shares were famously week during 2012 and the earlier part of 2013, moving against the grain of a bullish stock market, but now they have stabilized and are starting a modest uptrend. Can this be sustained? I see two factors: Profit margins and activist moves. Apple's share price has been hit the most by declining margins brought about by competition in the lower-end tablet market. The other factor is what it does with all its cash and how responds to activists cries of people like Car Icahn. If you see movement in either of these ares, watch Apple stock strengthen.

(Disclosure: Author is long Apple stock in a long-term retirement account, which could possibly become very long term.)

This entry was posted on Wednesday, October 23, 2013 at 17:23 pm and is filed under Mobile, Digital Media.
Keywords: Apple, Tim Coook, iPad, iPhone, Tablets, Samsung, Android

Wired has an interesting story on Hartmut Esslinger, the founder of Frog Design, Apple's (AAPL) design consultancy. Much of the material comes from Esslinger's new book, Keep It Simple.

So yes, I am referring to content that is referring to other content. But that's okay because it's the ideas that matter. And maybe you don't have time to read the book, or the article. 

Let me boil it down for you:

This entry was posted on Tuesday, October 08, 2013 at 16:15 pm and is filed under .
Keywords: Design, Apple, Steve Jobs, Hartmut Esslinger, Frog Design

The widespread meme is that Apple (AAPL) is done, Apple is fading, or Tim Cook is functionally challanged, or a combination of the three. The reality is that, after Apple announced that it sold more than 9 million iPhone 5c and 5s phones in three days, kids are obsessed with Apple's new iOS 7, and the new iPhones are selling like mad. 

Apple this morning reported that it sold a higher-than-expected 9 million iPhone 5s and iPhone 5c models in the first three days following their Friday launch, leading to more optimism in the company's sales forecasts.

I have some anecdotal evidence to offer. Last week, my unscientific survey of kids at a local high school indicated that they were completely obsessed with iOS 7. Another indicator is that the Raynovich household has added two more iOS-powered devices in the last 3 months, with clamor for more among the children (sorry, they're not getting them).

This entry was posted on Monday, September 23, 2013 at 17:39 pm and is filed under Mobile, Investing.
Keywords: Apple, Tim Cook, iOS 7, iPhone, iPhone 5s, iPhone 5c