Friday Feedback: The “$124 Billion Question” Edition
Great Ones, I don’t cover Apple (Nasdaq: AAPL) much at all. And there’s a reason for that…
I don’t like Apple. I don’t like its walled garden App Store. I don’t like how Apple software and devices don’t play nice with my Windows-based laptops and PCs. I don’t like how the company removes things like headphone jacks and then calls it “innovation!”
But most of all, I don’t like how Apple hasn’t released anything anywhere near as revolutionary as the iPod, iPhone or iPad in decades.
Sigh … here he goes again. We get it, Mr. Great Stuff. Who hurt you, man?
Funny you should ask that. I didn’t always have so much disdain for Apple.
I once owned a first-generation iPod. I used iTunes. And I loved both of them.
In fact, I owned an iPod all the way up until the advent of the iPhone.
It was then, however, that Apple software became such a pain in the butt to use on Windows that I couldn’t do it anymore. I literally lost my entire digital music collection because of an iTunes error that only occurred on Windows machines.
I was done. If that event hadn’t happened, I might just be an Apple fanboy right now. Might have even moved over to Apple laptops or Macs. It could have been so beautiful … could have been so right.
OMG… did you just quote Tiffany?
Quiet you. I miss my Walkman. Cassette tapes just hit different … even Tiffany.
Anyway, I can rant and rave about Apple and “what could’ve been” all day long.
(Great Stuff Team Note: You don’t know the half of it!)
The thing is, literally billions of people around the world had a completely different experience with Apple than yours truly … and it shows.
Apple just reported quarterly results, and the numbers are making even this diehard Apple bear reconsider his position. I mean, in the last three months, Apple gobbled up $123.9 billion in revenue!
Let me repeat that: Apple reported revenue of $123.9 billion … for three months.
Some companies go their entire lifespans and never make that much money. We’re all really impressed down here, I can tell you.
And while other companies are struggling with rising material costs, rising labor costs, supply chain shortages, semiconductor shortages, you name it … Apple apparently has none of those issues. If it does, it doesn’t show at all.
Apple’s quarterly earnings rose to $2.10 per share, blowing out expectations for a profit of $1.90 per share. What’s more, despite all the rising costs mentioned above, Apple’s gross margin actually improved to 43.8%.
And while Apple didn’t provide guidance — it hasn’t since the beginning of the pandemic — CEO Tim “Apple” Cook was upbeat on the current quarter:
Ironically, one of the only other companies to blow off supply chain issues this earnings season was Apple’s archnemesis: Microsoft (Nasdaq: MSFT).
The bottom line here, Great Ones, is that you can let your personal feelings about a product or company get in the way of profits.
I don’t like Apple’s products or services, but I’m clearly in a very small minority. I can make fun of all y’all Apple fanboys all I want … but if I’m not making investment decisions based on fundamentals, I’ll be laughing all the way to an empty bank account.
I’m not ready to full-on recommend buying AAPL stock just yet, but I’m coming around on the stock.
Just the stock, mind you — I’ll still never own an iPhone or a Mac. It’s the principle of the thing at this point. I can’t go for Apple … nooo … no can do. But what I can go for is a word from today’s sponsor:
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All right, Great Ones … it’s time for Friday Feedback!
Y’all might be wondering why I didn’t start off with a reader question like usual. Well, there are two reasons: One, the Apple news was just too big to ignore. Two, y’all have been rather quiet in the past week.
I know it’s been a crazy start to 2022. The market’s in a volatile place. Interest rates are set to rise. The pandemic is still going on, but all of us still have to work.
So, let me ask you a question before we get started: Are y’all doin’ OK? How are you holding up?
Are you doing anything different or special to weather the market’s dip?
Let me know at GreatStuffToday@BanyanHill.com, and we’ll talk about it next week. And now for your emails:
You Don’t Bring Me Flowers Anymore…
It seems you don’t plug PLUG any more. Maybe in your next portfolio update?
— Alan H.
‘Sup, Alan! Thanks for writing in.
It’s true. I haven’t covered Plug Power (Nasdaq: PLUG) in a while. It’s not that I’m ignoring it or deliberately avoiding talking about PLUG stock because it’s down. It’s that there hasn’t been any real news out of the company in a while.
Sure, there’s been the usual back and forth in the analyst community:
• Truist cut its price target from $44 to $27.
• Susquehanna Financial issued a positive rating and a $26 price target.
But, overall, not a lot of news or happenings. Plug continues to chug right along in its quest to bring hydrogen fuel-cell power to the world. And that quest is still going rather well, despite PLUG’s price action.
The next big event for Plug Power happens next month when the company reports fourth-quarter earnings, and you can be sure that Great Stuff will cover it.
But that’s not what you’re worried about, is it, Alan?
You’re all probably worried about PLUG stock’s massive decline from its all-time highs. Well, there are two reasons for that…
First, Wall Street appears to be in the process of moving out of growth stocks and into value stocks. Given how fast the economy is growing right now, I’m not sure how long this is gonna last, even with the Fed possibly raising interest rates three or four times this year.
Second, while the rest of the world is taking hydrogen fuel cells seriously — especially for commercial trucking and shipping applications — the U.S. is, well, being the U.S.
Several U.S. logistics and trucking companies are finally exploring the benefits of hydrogen power, but none are in the process of adopting hydrogen fuel cells. But they will come around, just like Europe has. It’s just gonna take time.
As always, Alan, if PLUG is making you nervous — or if you have hit your personal profit target, which you should’ve set before you bought PLUG — by all means, sell the shares if you need to.
As for the Great Stuff Picks portfolio? We’re in PLUG for the long haul unless something changes with the company’s business model or management.
Again, Alan, thanks for writing in!
PTON. Maybe Lululemon could take it under its wings.— Eric S.
And what, combine cults? What is this, a crossover episode for fitness fanatics?
Well, we say “fitness” … but now I gotta wonder how much actual fitness happens in Lulus. Is posing for Instagram a workout routine? Lululemon Athletica (Nasdaq: LULU) calls it “athleisure,” but I call it watching Hulu on the couch in sweats.
Still, Eric, I don’t think you’re far off the mark as far as the two companies’ target audiences go. Lululemon’s overpriced workout clothes go hand in hand with Peloton’s overpriced workout machines. Who knew?
I mean, this is LULU we’re talking about here: The company’s still trying to sell y’all on “smart mirrors” that are somehow supposed to replace a home gym. Yeah, OK, buddy.
And if you’re asking yourself how a clothing company could start manufacturing Peloton’s treadmills and the like, well … Peloton can’t even manufacture its treadmills, so ¯\_(ツ)_/¯.
Heck, Lululemon might even be ahead here with its smart mirror-making prowess.
Pretty, Pretty, Pretty Good Great Stuff
“Holy schnikes, Larry! … But, I get it. ETFs aren’t as exciting as individual stocks. You don’t get to fiddle with all the nobs, ditch the underperforming stocks.”I’m with Larry — and your words brought the light to me — investing in an ETF is like driving an automatic (why does my husband ALWAYS want to drive my car on the weekend? Because I only drive a manual. And btw, my husband is a Larry.
I so very, very very much enjoy reading your work — and am known to be extremely noisy in my enjoyment thereof. Yours in hopes of decades of more reading pleasure from you.
— Louise W.
Jeez Louise, you sure know how to make a man blush.
How’s about we make a deal, Louise: You keep reading your Great Stuff for the next few decades, and I’ll keep writing it. Sound good? Good.
Now that we have that all squared away, I wanted to follow up on your email from the other week, just in case you or one of your fellow Great Ones thought I came across bearish on ETF investing.
For the record, I don’t hate ETFs. They might not get your portfolio motor running like a romp ‘round the ol’ stock market racetrack, but if you’re bullish on an overall market trend — like our good friend Larry is on the chip industry — then ETFs are a great way to buy the veritable who’s who of the stock market world without selling one of your organs in the process.
In other words, they let you have your cake and eat it too … or, in Larry’s case, your chip stocks and queso. Mmm. Queso.
That said, there’s a new ETF Team Great Stuff’s been eyeing that embodies all manner of stocks related to the metaverse … except for the one company you might expect.
Keep an eye out for more on this metaverse ETF in your Sunday dose of Greatness — and yes, this is a shameless reminder that Simmer-Down Sundays do, in fact, exist.
If you haven’t been keeping up with your weekend reading, this is your chance to make amends. We will forgive you for your slacking … but only if you tune in on Sunday and share your thoughts with us on this latest, greatest ETF!
Oh, and thanks for writing in, Louise!
I read your article on CHPT and other EV charging station stocks and a question pop into my mind… I am thinking of buying an EV SUV but I lilke to take long rode trips.Sometimes from one coast to the other. In a gas vehicle when I run low on fuel I can stop at a gas station and fill up the tank in under 15 minutes. If I had an EV vehicle and found a charging station, how long would it take to recharge the battery when it ran low on charge?
Any thoughts on this?
— Stephen M.
Stephen! So kind of you to join today’s shindig.
Do we have any thoughts on electric vehicles (EVs)? Boy, do we…
Mainly, I have questions — questions on your EV expectations. Which EV SUV are you looking at? What’s the car’s actual range — and how new are the batteries?
How slow (or fast) are the chargers along your route? Are there enough chargers on your route to begin with? Is the battery depleted or full? What’s the weather like where you’re going?
As you can tell, your charging times will depend on more factors than you might be used to considering when switching from gas-powered cars.
From what I hear via EV owners — I’m still stuck in the carbon-powered present, myself — most people merely top up their charge while out and about, saving the full charge for at home. Needless to say, home charging is a moot point if you’re out on a long road trip … and how remote that trip is taking you.
You might be hanging around a charging station for a half-hour, or you might be there for hours.
If you were to drive a Nissan Leaf from coast to coast, you’d have to recharge the battery eight times. A Chevy Bolt, seven times. Even the Tesla Model X would need to be charged six times.
But with this new battery technology in your vehicle, you’d only have to recharge once … in a matter of minutes.
Not to mention, this stunning new technology is about to cut the cost of EV batteries in half … meaning by next year, an electric vehicle is expected to cost the same as gas-powered cars.
I won’t spoil the surprise just yet — click here to find out more!
And after you’ve checked that out, it’s time we turn it over to you in the inbox. If you have any stock market questions, investing rants or stocks you want covered in the hallowed halls of Great Stuff, email us at GreatStuffToday@BanyanHill.com.
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Until next time, stay Great!
Editor, Great Stuff