Friday, December 28, 2018

Apple (AAPL) suppliers

Ticker       Company name Mkt Cap
  • CRUS     Cirrus Logic   1.93B ; Austin, Texas-based; Apple supplier; makes audio integrated circuits and microphones used in smartphones.  Apple represents 75% of company's revenue. That is the highest percentage among Apple suppliers, according to FactSet.
  • SWKS    Skyworks Solutions   11.29B : Woburn, Mass.-based; The company makes radio frequency chips used in Apple's iPhone 6, Samsung's Galaxy GS5 as well as many other wireless devices.   Gets 40% of its revenue from Apple.
  • AVGO    Broadcom  94.9B;  San Jose, California-based; top supplier to both Samsung and Apple.
  • QRVO   Qorvo 3.72B: North Carolina; radio frequency (RF) solutions for mobile, infrastructure, and aerospace and defense applications.
  • JBL    Jabil Circuit 3.84B: contract manufacturer; gets about 25% of its revenue from Apple. 
  • LITE   Lumentum   3.11B
  • OLED  Universal Display Corp.  4.109B  (Two new iPhones have OLED screens, all three with 3D sensing)
  • QCOM Qualcomm    67.82B   makes most of its $22.3 billion sales from smartphones
  • NXPI      NXP Semiconductors N.V.     22.5B: Netherlands-based; the world’s number one supplier for small-signal discretes; will supply the near field communications (NFC) module and secure element NFC booster chip. NFC is a set of standards for smartphones and other devices like the Apple Watch to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters.
  • FNSR Finisar  2.52B   Sunnyvale, California
  • MU  Micron Technology  37.824B  Boise, Idaho; memory and storage solutions
  • AMAT  Applied Materials   31.55B  Santa Clara, California
  • XLNX  Xilinx   22.28B  San Jose, California
  • TXN   Texas Instruments  90.66B Dallas, Texas
  • STM   STMicroelectronics  11.68B  Geneva, Switzerland
  • KN Knowles Corporation 1.15B Itasca, Illinois
  • GLW   Corning   23.59B  Corning, New York
  • ADI   Analog Devices  31.55B  Norwood, Massachusetts
SMH VanEck Vectors Semiconductor ETF
Apple suppliers' stocks:  (vol) https://finviz.com/screener.ashx?v=211&t=AAPL,CRUS,SWKS,QRVO,JBL,LITE,OLED,QCOM,NXPI,FNSR,MU,AMAT,XLNX,TXN,STM,KN,GLW,ADI,SMH&ta=0&o=-volume

Acquisitions
  • InvenSense (traded as NYSE:INVN ) acquired  by TDK Corporation for $13.00/share in cash  Dec. 2016.
  • ARM Holdings  (traded as Nasdaq: ARMH)  United Kingdom; Apple supplier; maker of chips used in smartphones;  acquired by SoftBank Group (SFTBY) for $31.4 bln (July 2016)
  • Broadcom Corp.  (traded as Nasdaq: BRCM) ; California-based; top supplier to both Samsung and Apple. Acquired by Singapore-based Avago Technologies (AVGO) for $37 billion in Feb 2016.  Avago took the Broadcom name after the acquisition. The ticker symbol AVGO that represented old Avago now represents the new merged entity. The Broadcom Corporation ticker symbol BRCM was retired.

News
  • Jan 9, 2019: Apple (AAPL) will cut production of its three new iPhone models by 10% in the January-March quarter, the Nikkei Asian Review reported Wednesday. Last week, Apple shares tumbled after the tech giant announced disappointing iPhone sales and a sharply lower revenue forecast for the holiday quarter. The Nikkei said Apple has asked suppliers twice in the past two months to trim planned production of the iPhone XR, XS and XS Max. The latest request was reportedly made before last week's announcement. The Nikkei reported the move would reduce the total number of iPhones made this quarter from the previously estimated range of between 47 million and 48 million, to between 40 million and 43 million, or more than 20% less in terms of year-over-year quarterly production. 
  • Jan, 2019: Apple's latest iPhone models are seeing huge discounts from retailers in China. The technology giant recently revised its first quarter sales forecast downward, putting a large part of the blame on a slowdown in the Chinese market. Experts said a mixture of a poor pricing strategy and a lack of exciting features compared to local rivals like Huawei has led to the newest iPhones' weak performance in China.
  • Apple's 512GB iPhone XS Max, the most expensive of the new models, costs $1,499 in the U.S. But in Asia's largest economy, the un-discounted price is 12,799 yuan, or nearly $1,900 — a more than 26 percent premium. Other variations of the latest iPhone models have similar price premiums in China.
  • Jan 2, 2019 : (source) Reportedly, Apple is collaborating with Sony Corp.(SNE) to deploy 3D cameras on iPhone XI in a bid to revive dwindling iPhone sales globally. The company plans to leverage Sony’s long-range 3D Camera based on Time of Flight (ToF) technology.This move is expected to enhance iPhone’s photography, security and gaming features, which will help in luring more customers. Further, it will enable users to precisely map objects in 3D and focus on every part of the picture up to five meters. Moreover, it can also be used to track objects in the dark.
  • Dec 2018: Apple (AAPL)announced they’ll no longer disclose iPhone sales, a major metric of business health for investors and analysts.

Thursday, November 8, 2018

The Black–Scholes model

What does it mean?: Prices a derivative based on the assumption that it is riskless and that there is no arbitrage opportunity when it is priced correctly. 

History: Developed by Fischer Black and Myron Scholes, then expanded by Robert Merton. The latter two won the 1997 Nobel Prize in Economics for the discovery.   
Importance: Helped create the now multi trillion dollar derivatives market. It is argued that improper use of the formula (and its descendants) contributed to the financial crisis. In particular, the equation maintains several assumptions that do not hold true in real financial markets.  
Modern use: Variants are still used to price most derivatives, even after the financial crisis.



The Black-Scholes Model or Formula calculates an theoretical value of an option based on 6 variables. These variables are:
  • Whether the option is a call or a put
  • The current underlying stock price
  • The time left until the option's expiration date
  • The strike price of the option
  • The risk-free interest rate
  • The volatility of the stock
The Black-Scholes (1973) was originally formulated to price European-style options, and does not account for dividend payment and early exercise. The Cox-Ross-Rubenstein Binomial model (1979) is a variation on the original Black-Scholes. The Barone-Adessi & Whaley, or "Whaley" model (1987), accounts for early exercise of call options due to dividend payment and is widely used among individual investors for pricing American-style equity options.

Sunday, October 14, 2018

Company profile: Sun Capital Partners

Private-equity firm
Founded 1995; 23 years ago
Headquarters Boca Raton, Florida, US
Key people:
Rodger Krouse (co-CEO)
Marc J. Leder (co-CEO)
Website www.suncappart.com

Founded by two onetime colleagues at Lehman Brothers, Marc Leder and Rodger R. Krouse, Sun Capital manages billions in private-equity investments, buying and selling companies for profit. The public face of the firm is Leder, a co-owner of the Philadelphia 76ers basketball team and the New Jersey Devils hockey team. Noted for his extravagant parties and yachting expeditions, he has been dubbed by tabloids as “the Hugh Hefner of the Hamptons.”

Marc Leder, left, and guests attend a 2015 benefit in the Hamptons. 

Politically, he may be best known for hosting the Boca Raton, Fla., dinner where presidential candidate Mitt Romney made what became infamous comments about the “47 percent of the people .. who are dependent upon government, who believe that they are victims.”

Underfounded pensions
Over the past 10 years, Sun Capital has taken five companies into bankruptcy while leaving behind debts of about $280 million owed to employee pensions.

At two of them, Sun Capital took millions of dollars out of the companies while leaving pensions underfunded.

At Powermate, a manufacturer of electric generators with a factory in Nebraska, Sun Capital took $20 million from the company as a dividend in 2006, according to court documents. Two years later, it sent the company into bankruptcy court, leaving the government insurer to pay for the underfunded pension covering 600 workers.

At Indalex, an Illinois-based aluminum parts maker, Sun extracted a dividend of $70 million in 2007, according to court documents. Two years later it sent the company into bankruptcy, leaving the government insurer to pay more than 3,000 pensioners.

At the other two companies, Friendly’s in 2011 and Fluid Routing Solutions in 2009, Sun Capital used the bankruptcy court to shed the pension obligations — and then kept operating. First, Sun put each company into bankruptcy, essentially relinquishing control. In bankruptcy court, the companies were absolved of their pension debts of $115 million and $30 million, respectively. Then, once the companies were pension-free, Sun Capital bought the same companies out of the ensuing bankruptcy auction.

During the period when these five companies filed for bankruptcy with underfunded pensions, Sun had investments in more than 80 companies.

Wednesday, October 3, 2018

ETF Composition - IYT - Transportation Average (iShares)

Fund Name: iShares Transportation Average ETF
Ticker Symbol: IYT
TickerName% of net assetsSectorExchange
1FDXFEDEX CORP12.78IndustrialsNYSE
2NSCNORFOLK SOUTHERN CORP9.77IndustrialsNYSE
3UNPUNION PACIFIC CORP8.74IndustrialsNYSE
4JBHTJB HUNT TRANSPORT SERVICES INC6.46IndustrialsNASDAQ
5UPSUNITED PARCEL SERVICE INC CLASS B6.27IndustrialsNYSE
6KSUKANSAS CITY SOUTHERN5.53IndustrialsNYSE
7LSTRLANDSTAR SYSTEM INC5.18IndustrialsNASDAQ
8CHRWCH ROBINSON WORLDWIDE INC4.95IndustrialsNASDAQ
9UALUNITED CONTINENTAL HOLDINGS INC4.69IndustrialsNASDAQ
10KEXKIRBY CORP4.66IndustrialsNYSE
11CSXCSX CORP4.65IndustrialsNASDAQ
12EXPDEXPEDITORS INTERNATIONAL OF WASHIN4.47IndustrialsNASDAQ
13RRYDER SYSTEM INC4.21IndustrialsNYSE
14ALKALASKA AIR GROUP INC3.59IndustrialsNYSE
15LUVSOUTHWEST AIRLINES3.48IndustrialsNYSE
16DALDELTA AIR LINES INC3.11IndustrialsNYSE
17MATXMATSON INC2.27IndustrialsNYSE
18AALAMERICAN AIRLINES GROUP INC2.06IndustrialsNASDAQ
19CARAVIS BUDGET GROUP INC1.85IndustrialsNASDAQ
20JBLUJETBLUE AIRWAYS CORP1.16IndustrialsNASDAQ

By average volume:

             

Tuesday, October 2, 2018

Dollar Index climbs again

The U.S. Dollar Index is up 0.3% at 95.53, looking for its fifth consecutive gain. The greenback built on yesterday's rally during the overnight session, hitting a high in early morning trade. 

The advance was due in part to weakness in the euro, but the Dollar Index backed off its best level of the day after notching a session high (95.74) just above its September high (95.74). The euro has recovered more than half of its decline, but it remains on course for its fifth consecutive loss, as the market's attention is drawn to Italy's fiscal standing once again, sending Italy's 10-yr BTP yield (3.475%) past the post-election high (3.388%).




  • EUR/USD: -0.26% to 1.1544
    • Fifth consecutive decline for the euro
    • Italy's Deputy Prime Minister Luigi Di Maio said the government will "not retreat even a millimeter" from its plan for a 2019 deficit of 2.4%. Mr. Di Maio added that the Italian government has no plans to leave the euro
    • Eurozone August PPI +0.3% month-over-month (expected 0.2%; last 0.7%); +4.2% year-over-year (expected 3.9%; last 4.3%)
    • Spain's September Unemployment Change 20,400 (expected 28,200; last 47,000)
  • GBP/USD: -0.47% to 1.2976
    • 50-day moving average at 1.2978
    • UK's September Construction PMI 52.1 (expected 52.8; last 52.9). September Nationwide HPI +0.3% month-over-month (expected 0.2%; last -0.5%); +2.0% year-over-year (expected 1.9%; last 2.0%)
  • USD/CHF: +0.25% to 0.9859
    • Seventh consecutive advance for the dollar
  • USD/JPY: -0.21% to 113.75
    • Action pauses near November high (114.74)
    • Japan's September Household Confidence 43.4 (expected 43.0; last 43.3)
  • USD/CNY: -0.01% to 6.868
    • USD/CNH: -0.04% to 6.884
    • Golden Week in China
  • USD/INR: -0.13% to 73.33
    • Mahatma Gandhi Jayanthi in India
  • USD/RUB: +0.49% to 65.31
  • USD/TRY: +0.70% to 5.977
    • 50-day moving average at 5.9758
  • USD/BRL: -2.75% to 3.907
    • 50-day moving average at 3.976
    • Brazil's August Industrial Production -0.3% month-over-month (expected 0.2%; last -0.1%); +2.0% year-over-year (expected 3.2%; last 4.2%). September IPC-Fipe Inflation Index +0.39% month-over-month (expected 0.40%; last 0.41%)
  • USD/ARS: -3.55% to 37.99
  • USD/MXN: +0.30% to 18.77
    • Session high (18.87) notched just below 50-day moving average (18.88)
  • USD/ZAR: +0.91% to 14.34
    • Action remains near 50-day moving average (14.28)
    • Growing speculation that South Africa may need to ask the IMF for assistance
  • USD/CAD: +0.02% to 1.2818
  • AUD/USD: -0.46% to 0.7187
    • Australia's September AIG Manufacturing Index 59.0 (last 56.7)
  • NZD/USD: +0.05% to 0.6597
    • New Zealand's GDT Price Index -1.9% (last -1.3%)
  • Wednesday, September 26, 2018

    Market update: Federal Reserve hikes short-term rates by 0.25% (26 September 2018)

    The Federal Reserve increased short-term interest rates on Wednesday, as expected, raising the fed funds target range by 25 basis points to 2.00-2.25%.
    • Fed hikes interest rates, raises its economic outlook and drops 'accommodative' language
    • Fed's Powell: Lack of 'accomodative' language a sign policy inline with expectations







    Stocks were up modestly ahead of the release of the Fed's decision, which crossed the wires at 2:00 PM ET, and extended gains after the central bank removed the word 'accommodative' from its policy statement. However, that initial move was reversed, and then some, following a post-decision press conference from Fed Chairman Jerome Powell, during which he said the language change didn't signal a change in the Fed's path for rate hikes.

    The S&P 500 was up as much as 0.5% on Wednesday but fell sharply in the final minutes of the session to finish with a loss of 0.3%. The tech-heavy Nasdaq Composite ended lower by 0.2%, the blue-chip Dow Jones Industrial Average finished lower by 0.4%, and the small-cap Russell 2000 lost 1.0%.

    As for rate-hike projections, the Fed still appears to be on track to raise rates another 25 basis points in December, with the CME FedWatch Tool putting the chances at 79.2%. Beyond 2018, the Fed's dot plot showed expectations for three rate hikes in 2019 (unchanged from June) and one in 2020 (also unchanged from June).

    U.S. Treasury yields fell following the Fed's policy announcement, although the 2-yr yield managed to close unchanged at 2.83%. The yield on the benchmark 10-yr Treasury note dropped four basis points to 3.06%. In currencies, the U.S. Dollar Index finished +0.2% at 93.90, but was volatile after the release.

    The drop in Treasury yields weighed on the rate-sensitive financial sector, which finished at the bottom of the sector standings with a loss of 1.3%. The energy sector (-1.0%) was another notable laggard, dropping in tandem with the price of crude oil; WTI crude futures finished -1.0% at $71.58/bbl.

    Electric cars

    Only 6% of U.S. drivers own an alternate fuel vehicle, but surveys found that 53% are potentially interested in purchasing one. Millennials — generally the population born between the early 1980s and early 2000s — have a relatively high level of interest in electric vehicles (EVs).

    An all-electric car is powered only by an electric motor that receives electricity by plugging into the grid. These cars consume no gasoline and produce no tailpipe emissions. However, the level of overall emissions depends on the amount of coal used to make electricity.


    While high-end Tesla Motors (TSLA) is selling all the plug-in Model S sedans it can make, expected to be more than 35,000 this year worldwide, General Motors (GM) and Nissan (NSANY) have had to discount sale prices and leases to move the Chevy Volt plug-in hybrid and Nissan Leaf plug-in EV. In the U.S., GM sold only 3,606 Volts in Q1 2014, while Nissan sold just 5,184, though that was a 46% jump for the Leaf from the year-earlier quarter.

    Electric vehicle sales have largely failed to meet manufacturers' sales expectations because their capabilities and features fall short of customer expectations, but the outlook for the EV market is improving.

    High prices and long recharge times are 2 good reasons why electric vehicle sales haven't taken off, aside from Tesla sales.

    Consumers prefer a driving range on a single charge of more than 250 miles, but EVs available today typically have a range of 100 to 200 miles. (Regulators give the Tesla Model S with an 85 kWh battery a range of 265 miles.) And the average battery recharge time considered acceptable by consumers is 2.74 hours, but today it typically takes three to 20 hours to recharge an EV, the study notes.

    Price is still an issue with most of consumers expecting to pay less than $20,000.


    After a federal tax credit, the Tesla Model S costs at least $63,570 to buy. Nissan advertises its Leaf as starting at $21,480 after the credit and GM advertises the Volt for as low as $26,685 after the tax credit. It also now sells the tiny Chevy Spark EV for $19,185 after the tax credit.

    Among other plug-ins on the market, Ford (F) sells the C-Max Energi Plug-In Hybrid for $32,920 and the Fusion Energi SE for $34,700, while Toyota (TM) offers the Prius Plugin for $29,990.

    Survey found gas-electric hybrids to be the most popular choice among people interested in possibly buying alternate-fuel vehicles for their next auto purchase. Natural gas vehicles were of interest to 22% of drivers, followed by plug-in hybrids at 19% and diesels at 18%.

    BMW's new Mini electric concept car drives, parks, and charges itself

    News:
    • Jan 7, 19 Shanghai:  Tesla (TSLA) broke ground on its Chinese Gigafactory where it plans to mass-produce Model 3 and Model Y electric vehicles. "We think with the resources here we can build the Shanghai Gigafactory in record time and we’re looking forward to hopefully having some initial production of the Model 3 towards the end of this year and achieving volume production next year," Elon Musk stated at the event. The local Gigafactory is the first wholly-owned car plant in China operated by a foreign company. 
    • Jan 2018: Tesla (TSLA) has started to roll out its all-electric Model 3 vehicles, while Volvo last year announced plans to phase out gas-only cars and launch new electric and hybrid vehicles in 2019.
    • Dec 2017:  Panasonic is considering jointly developing batteries for electric vehicles with Toyota (NYSE:TM), a move that would cement its position as the world's leading producer of automotive batteries. Panasonic (OTCPK:PCRFF) already supplies lithium-ion assemblies for Toyota's hybrid vehicles, but has also carved out a name for itself as the major battery supplier to Tesla (TSLA).
    • July 2017:  Toyota (NYSE:TM) is working on an electric car with improved driving range and a fast-charging battery. The Japanese automaker is expected to build the new EV on a new platform and use solid-state batteries that can be recharged in minutes. The new model could arrive as early as 2022.  Other automakers such as BMW are also working on developing all-solid-state batteries, eyeing mass production in the next 10 years.
    • March 2015:  Mercedes is launching its first plug-in hybrid-electric midsize sedan, the C350e, in U.S. dealerships in September 2015, according to reports. Chatter on the street suggests that the German auto-making powerhouse plans to deeply undercut Tesla stickers, with a price around $42,000 before $5,250 worth of federal and state incentives. The 85 kWh Tesla starts at twice that level. And the brash young automaker will not have a competitive product until at least 2017. Mercedes can undercut the pricing because it has a lot more experience at mass production and sourcing; will make the car in low-cost Alabama instead of high-cost California; and it can subsidize the vehicle with its other vehicles, just to gain market share. The market for electrics is growing dramatically; this is just the start.
    2016 Mercedes-Benz C350e