Wednesday, January 10, 2018

Apple: Unlikely To Spend Large War Chest

Apple remains in an enviable position with a massive cash position.
The tech giant faces a large repatriation tax bill payable over eight years.
Previous capital allocation moves favored maintaining large cash balances contrary to analyst calls for large capital returns or a mega acquisition.
A strong war chest reduces investment risk.
A lot of discussion surrounds whether Apple (AAPL) will ramp up stock buybacks and acquisitions due to the repatriation of foreign earnings provision in the Tax Cuts and Jobs Act. A couple of analysts suggest a ramp up in stock buybacks while my previous research doesn't back this theory due to a big repatriation tax hit.
Read full article on Seeking Alpha. 

Disclosure: Long AAPL. Please review the disclaimer page for more details. 


Synergy Pharma: Dilutive Financing Appears Likely Before Inflection Point

Cash position suggests Synergy Pharma needs to raise more money before next $100 million loan tranche.
New CEO has an opportunity to end financing risks to new investors.
The company is near an inflection point in sales and costs that will reduce cash burn going forward.
Synergy Pharmaceuticals (SGYP) continues to wade through a volatile drug launch due to questionable internal decisions. The company botched the drug launch financing, but the investment thesis isn't altered with the recent replacement of the CEO.
Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Thursday, January 4, 2018

Cisco Systems: Repatriation Tax Hit

Cisco Systems faces a large tax bill from the mandatory repatriation of foreign earnings.
The tech giant has one of the largest cash balances impacted by the tax law.
The current capital return plan is solid, but the net payout yield fails to impress.
One company flying under the radar of the mandatory tax repatriation of foreign earnings is Cisco Systems (CSCO). The market constantly focuses on the other tech giants like Apple (AAPL) and Microsoft (MSFT) or new tech companies, but Cisco Systems actually has one of the largest balances of cash stashed in international locations.
Read the full article on Seeking Alpha. 

Disclosure: Long AAPL. Please review disclaimer page for more details. 


Tuesday, January 2, 2018

Apple: Big Repatriation Hit

Apple faces a large tax bill from the mandatory repatriation of foreign earrings.
Investors shouldn't expect any special cash moves by the tech giant.
A continued focus on large stock buybacks is the preferred signal that the BOD sees a cheap stock and a bright future.
The recently passed tax plan by the GOP provides massive tax breaks to corporations. A key component of the tax plan is a provision to allow international companies to repatriate foreign earnings at a reduced tax rate.
Read the full article on Seeking Alpha. 

Disclosure: Long AAPL. Please review the disclaimer page for more details.