Could Apple cannibalise its own sales?

Common stock market sayings

Tuesday’s launch of the iPhone 8, iPhone 8 Plus and the iPhone X was well received by analysts across the board although there would appear to be one sticking point. There are growing concerns that a delay in the shipping timescale for the iPhone X, the date has been pushed out to 3rd November, could impact short term sales.

iPhone 8, iPhone 8 Plus and the iPhone X

The iPhone 8 and iPhone 8 Plus are both expected to ship towards the end of September which is causing concern amongst analysts. The worry is that those looking to buy the latest technology will likely hold off until the iPhone X is available and those who would normally acquire an iPhone 8 or iPhone 8 Plus may not be in a rush. The fact that the iPhone X is valued at $999 is neither here nor there because the large screen, vastly improved functionality and cutting-edge technology really does put it a step above anything else on the market. Continue reading “Could Apple cannibalise its own sales?”

Why director dealings are even more important than you think

Rumours, counter rumours and truth

We all know that director dealings in their own shares are one of many flags people use when researching potential investments. There is nothing better than hearing about a director investing a significant amount of money in their own company shares. On the flipside, the sale of shares by a director can also be a flag that maybe things are not as good as some people think. However, why are director dealings even more important than you think?

Few and far between

While many investor believe that directors regularly invest in their own shares, research in this particular field might surprise you. There is no doubt that many directors are active in their own shares but when you compare the number of share purchases by different individuals to the number of directors associated with listed companies, the percentage of directors who invest is minimal. This shows why director dealings should be tracked extremely closely because while the vast majority fail to buy shares even in the good times, those that do invest must have good reason.

When looking at director purchases and sales it is also imperative that you look at their overall holding and any options/free shares they may have been awarded. Share options are a very popular way of remunerating directors although the way these share option plans are structured very often it is simply a purchase and immediate sale. Where a director has no direct funds invested we can to a certain extent ignore these transactions. Continue reading “Why director dealings are even more important than you think”

Are director share bonuses warranted?

Why do accounting irregularities take so long to emerge?

Large, medium and small companies often use director share bonuses as a means of incentivising their staff to maximise returns for shareholders. This has been a controversial subject over the years because many directors have been left with enormous share option schemes with the potential of multi-million pound returns. Often this can be set against a difficult period for shareholders and perhaps volatile trading for the company itself. So, are director share bonuses warranted and a useful tool to help investors?

Regular bonuses

The idea that directors will receive regular share bonuses, whether free shares or the option to buy a certain amount at a certain level in the future, went out with the dinosaurs. The only way that directors and other members of staff should be incentivised is if they have individually and collectively delivered for the company. On countless times in years gone by we have seen directors receiving large bonuses or share options when perhaps the performance of the underlying company does not warrant the awards. Continue reading “Are director share bonuses warranted?”

Marketing deals are cheap but do they deliver?

Why constant stock-market gambles never pay off

Over the last few days I have seen a number of companies announcing marketing deals which have got shareholders excited. Many are looking forward to vast riches, increased sales and even the odd takeover or merger. However, be wary of marketing deals which are very cheap to organise but do they always deliver?

Marketing deals with no minimum sales

The most alarming type of marketing deal is one where a company agrees to market a third party product in exchange for some form of commission payment. This company may have an enormous customer base from which to extract sales from the third party product but how will the third party guarantee income and benefits for its own shareholders? Continue reading “Marketing deals are cheap but do they deliver?”

Russian technology companies warned about overseas software

Why do accounting irregularities take so long to emerge?

Russian technology companies have been formally warned by Pres Putin that the use of overseas software in their systems could prevent them from bidding on state contracts. This would seem to indicate that overseas software companies will be at risk of reduced sales in Russia but will this really make a difference?

Protectionism v Protectionism

While the US authorities continue to criticise Russian policies, and the recent annexing of parts of the Ukraine, what about the recent decision regarding the use of overseas software. In many ways the US is introducing various layers of protectionism and their Russian counterparts are doing likewise. Each party continues to claim the other is using software to spy and gather information without actually putting forward any cold hard evidence. In many ways Donald Trump has prompted this response from the Kremlin although we will see if Pres Putin actually follows through with the threat. Continue reading “Russian technology companies warned about overseas software”

Tax incentives, large corporations and real estate markets

Currency movements and inflated profits

Our article about the impact Amazon has had on the Seattle real estate market has prompted a number of questions. On the surface we can see the enormous benefits Amazon has brought to the Seattle economy but how has this benefited Amazon and Amazon shareholders?

Tax incentives

Is it fair to suggest that companies such as Amazon which has invested an enormous amount of money, time and effort into its Seattle headquarters should receive some appreciation from the local authorities? The more traditional form of local authority appreciation comes in the shape of tax incentives or part funding of a company’s expansion plans by the local authority itself. This may take in cold hard cash or perhaps the transfer of land which the company could use to expand its operations. Continue reading “Tax incentives, large corporations and real estate markets”

Is Seattle real estate overdependent on Amazon?

Big, powerful and influential companies attract enemies

Sometimes real estate investors only see the headlines and do not delve too deep to see what is going on under the surface. As a consequence, those who rushed towards the Seattle real estate market may be thinking again with online giant Amazon calling time on the expansion of its Seattle operation. Amazon has to all intents and purposes been the main reason why Seattle real estate is now recognised as one of the “hottest housing markets” in the US. So, if Amazon begins to pull back on future growth how will this impact the Seattle real estate market?

Setting the scene

Before we begin to look at the potential impact of Amazon calling time on expansion of its Seattle headquarters, it is worth looking at the local real estate market today. The simple fact that 9000 new Seattle apartments will come online this year says everything. There is extreme demand for rental property at this moment in time and with Amazon yet to fill 6500 jobs in Seattle there is even more demand on the way. So, we will likely see some upward pressure on Seattle rental valuations in the short to medium term but the longer term could go a little softer. Continue reading “Is Seattle real estate overdependent on Amazon?”

Don’t forget to sell when the trend changes

Stock markets

As more and more investors use share price graphs as an element of their research it is all good and well spotting a chart breakout on the upside but there will be a time to sell. Whether or not you believe in share price graphs as an indicator of future share price movements there is evidence to suggest trends do repeat themselves on a regular basis. So, how do you focus your investment strategy to making use of share price graphs on the upside and the downside?

Active traders

If you do place great emphasis on share price graphs as a means of spotting the next “big investment” you may need to act quickly when the share price breaks through support levels and the uptrend is broken. These are not really situations where you buy and tuck-away or invest on a long-term basis because short-term trends do change quite regularly although long-term investors can also make use of long-term trends. Continue reading “Don’t forget to sell when the trend changes”

Remember, dinosaurs ruled the Earth for thousands of years

Can older companies/sectors compete with new technology?

A bizarre headline – has this one got you thinking? Well, while many investors spend hundreds if not thousands of hours looking for the next Google, the next Microsoft and the next Facebook, why not just invest in these giants today? If we look at Amazon, this is now seen as an established company with a reputation and influence other companies could never achieve. So, why would you continue to look for the next big thing when the old dinosaurs still have some life left in them?

Brand and reputation

It is true what they say, you can build a brand and reputation over many years but you can lose it in just a few hours. If we look at companies such as Google, Microsoft, Facebook and Amazon, these are all recognised brand names with reputations the likes of which we have never seen before. They dominate their markets, they crush the opposition and are constantly looking for new income streams – so why look elsewhere? Continue reading “Remember, dinosaurs ruled the Earth for thousands of years”

North Korean crisis testing Donald Trump

Volume is the key to future stock announcements

In days gone by the threat of military action by the US would have been enough to dampen any ambitions North Korean leader Kim Jong Un had towards South Korea. In years gone by he has pushed the US administration to the edge only to “fall back into line” and go quiet for a while. However, the situation today is very different with Donald Trump threatening all kinds of action, from military to trade sanctions, but to no avail.

Decoupling of security ties

A number of articles today have discussed the fact that Kim Jong Un and Donald Trump may both be targeting the decoupling of security alliances between the US and its Asian allies. The US has always had relatively strong links with South Korea and Japan although its relationship with China has been difficult to say the least. So, as the US and North Korea continue to sabre rattle, could they both be looking for the same endgame? Continue reading “North Korean crisis testing Donald Trump”