I’ve done quite a bit of research and it looks like 3D printing will be the next big thing. Despite it already being big today it is nothing compared to what it will become in 5, 10 and 20 years.
Back in 1996 I saw the internet before it really went BIG. I jumped on board this mega trend and made money in stocks and the industry itself. Not since then have I seen something that gave me the same feeling as the promise that 3D Printing holds.
3D Printing has applications in Aerospace, Architecture, Medicine, Dental, Food, Automotive, Commercial, Consumer Products, Defense, Prototyping, Education and more. There will be new applications as the technology and materials get better at breakneck pace.
As an investor you can find many companies in the space. Some are already legitimate while others are just hopping on the bandwagon to cash out on the Wall Street mania. Some trade at multiples that will be hard to grow into for decades. Buyer beware.
Some of the legitimate real players doing real big dollar business are Stratasys (SSYS), 3D Systems (DDD) and Exone (XONE). I urge those looking to buy these companies buy in chunks to allow for any multiple contraction opportunity so you can get in cheaper. However that day may never come so start establishing a long term position and add on weakness.
Some others I just can’t justify the insane valuation. Companies like Voxeljet and Organovo for example. The market caps to revenue for these are insane and make the other high flyers look cheap by comparison.
I’ve been gathering information on what seems to be the premier 3D Printing Website Community “3DStuffZone.com” at www.3DStuffZone.com
If you are going to invest in this area I suggest you read about these companies. There is risk that these disruptors get disrupted. Patent applications are all over the place and innovation is happening at a breakneck pace. At www.3dStuffZone.com I’m able to keep up with the innovation from the actual companies and end users in the trenches of the 3D Printing industry.
Why is it that I no longer watch CNBC you ask?
I had watched this financial news channel for at least a decade plus. Not sure if I got smarter or they got worse but too much of CNBC is opinion and agenda versus just facts. I’ll do my own opining to make decisions thank you.
I took a tour of CNBC headquarters in person and it was a HUGE wake up call. On the tour I was told how they have 14 hours of programming each day and they have to fill all that air time. They literally said they are a “giant booking machine” bringing in feeds of booked guests over satellite’s, internet and every other possible way. They book 100’s of guests each day to fill the airwaves.
Their goal is to fill the time. Does not really matter too much what the content is as long as you watch. I no longer watch. Easier to pick the days facts from the newswires.
CNBC also makes every little thing into a giant super important thing. Jobs numbers? We have a timer for that and will remind you ever commercial break! ADP numbers? Sure we have a countdown for that too. Every other minor economic report or news…we’ll remind you too over and over because it is super important. We’ll even show you timers with 100th of a second accuracy because these things are really really important. Not a millisecond to waste!
There are many hazards out there to your investing success. It is my opinion that watching CNBC may be one of the most hazardous things you can do if you want to be successful at investing. It is the nature of the best. If they only had to report the facts each day it would barely fit an hour. So you have to repeat everything ad nauseum, bring on an endless parade of guests to opine and make a mountain out of every mole hill.
Watch at your own peril…and if you must watch then do what Buffett does…at least turn the sound off!
When you invest you have to look out 5, 10 and 20 years to catch some big trends and get in well before the Wall Street crowd figures it all out. Case in point is the upward trend with both all electric plug in vehicles as well as hybrid plug-in’s.
These two types of autos are increasingly becoming more popular. The major auto manufacturers are producing increasingly more popular and affordable models. The end user adoption curve is also beginning to pick up in this space.
A little history. First we had all gas and diesel vehicles. Next were hybrid’s which simply paired gas with electric motors and batteries but had no plug in option. Today the biggest trends are plug-in hybrid’s which allow you to plug in and charge an onboard battery for some base amount of electric only driving range (i.e. 10 to 50 miles). Also pure electric only vehicles are now hitting new price and performance benchmarks with more on the way.
So what I do as a long term investor is look forward many years down the road (but not too many). I see the day coming where a significant portion of the automobiles in service here in the United States are charging (think fueling up) off the electric power grid. Many of these electric or plug-in cars are used for trips well within the electric range of the vehicle thus requiring no gasoline in the case of the hybrid plug-in’s.
So how do we capitalize on this? The answer is UTILITIES! The regional utility companies are all poised to reap the tailwind this will begin to generate as these types of cars enter into service. People will be bypassing gas stations and instead charging up from either home based electric chargers or high voltage-high speed public chargers. All these pull right from the power grid supplied by the utilities serving their respective areas.
So a trend we will see is a drop in gas station fuel stops and instead that power coming right off the electric power grid. Gas and oil companies will see less business at the retail end but increased sales of natural gas into the utilities as that will likely be the fuel of choice for electrical power generation for at least the next few decades. Utilities become the new toll booth replacing fossil fuel gas stations. This will create a new revenue tailwind and increased electricity demand for these lucky beneficiaries.
Some companies poised to reap these rewards in the coming years and decades are Duke Energy and Southern Company. Two very large utility companies with huge footprints. Each offers a substantial dividend with Southern Company paying 4.5% and Duke Energy paying 4.4%. These companies will pay you to wait for this mega-trend that is beginning to emerge.
Utilities also provide some stability to your portfolio while you wait. These companies have solid and predictable revenue streams and are unlikely to blow up your portfolio like some riskier sectors might.
So put a little power in your portfolio. Catch this wave before everyone else does. That is how you make a fortune in investing. Look down the road as the Oracle of New Jersey does and see what is coming before the pack does.
Here is why no special dividend or even a substantial dividend or even a buyback. No executive or board member is aligned with shareholders because they don’t hold any stock!
Tim Cook – 13.8k shares. Really? This is all Cook held onto? He dumped all his options when they vested
Eddy Cue – 285 shares. Dumped all his shares when they vested too. Nice to see these execs holding onto stock, right?
Phil Schiller – 257 shares held. Such conviction in his company? Dumped his 120k shares March 12 for 70 million. But hey he kept about 125 grand worth!
Daniel Riccio – 0 shares (not a typo). Dumped 14 millin worth of stock in ’12. Holds zilch
Peter Oppenheimer – 4793 shares owned. That’s not much. he dumped 150k shares for 90 million in march.
Robert Mansfield – 29548 shares owned. Dumped 50 million plus in stock.
Now I know why us shareholders never got a special dividend. Never got Q1 dividend moved up before the taxes went up. Why would any board member or executive want to give a dividend when they don’t own any shares? Steve Jobs held shares in Apple. Jim Sinegal held all his shares in Costco. Buffett never sold a share of Berkshire. It’s nice to have your interests aligned with management and the board. It’s not so great when your interests are very different.
Don’t believe Apple’s management or board is aligned with you, the shareholder. Just look at how much stock they hold and what they do the moment their options vest. They can’t sell them fast enough. So to them it does not really matter about dividends, tax efficiency, buybacks or the daily, weekly, monthly or annual stock price. Just build enough cash to keep your salary, bonuses, company and options coming.
Until these board members and executives start having more than half their net worth tied up in long apple stock they simply are not part of the team.
I’m going to hold on and hope for a pop on earnings so I can trim out of this position. I learned from the best investors in the world that if management is not riding the same bus you are that you need to get out of the bus fast.
Apple’s board and executives interests are NOT aligned with shareholders interests. Go look at the insider transactions and holdings. Executives have blown out of their vested options as soon as they could. 10’s and 100’s of millions worth. The top execs hold between zero, a few have several hundred and very few just a couple thousand shares. Cook leads the pack with a paltry 13k shares. Mansfield only 12k. Forstall gone but only 3k. Oppenheimer just 5k. Phil Schiller a mere 257. Eddy Cue holds 285. Most of these major executives and board members have fewer shares than I do! Why would any of them want a bigger dividend? They don’t own any shares to make money off of that.
Here is a link to the Inside Holders: http://finance.yahoo.com/q/ir?s=AAPL+Insider+Roster
Until they start owning shares and not just options that they sell the moment they are vested they are not aligned with shareholders interests, period. This was also clear when they did not do a special dividend or even move up the Q1 dividend before 2012 taxes were going to be increased. Why should they? They don’t own any shares.
Their goal is to keep the money for salary and bonus (cash). Use buybacks to offset the billions in option dilution for their grants to hide that compensation as best as they can.
Until apple executives own 10’s of thousands or 100’s of thousands of shares their interests are simply not aligned and their actions have proven that. The token $10.60 dividend was really an insult. Company making 50/share in EPS and has 130B net cash. C’mon. Steve Jobs was paid $1 per year. All his comp came from the stock he accumulated and did not sell. Greats like Jim Sinegal of Costco and Warren Buffett the same.
If you want your interests to be reflected than look for a management team that belly’s up to the bar with you and owns some significant shares. I would like to see Apple executives and board get some real skin in the game. Why don’t they have at least 1/3 of their net worth long in Apple stock?
Mr. Tim Cook,
Hi. First let me briefly state I am a long time Apple user since the Mac Plus era. I own iPhones, iPads, iPods and iMac’s. Everyone in my family owns them. I also am a long time shareholder of Apple stock with a substantial stake.
It disturbs me as a huge fan of Apple and a shareholder to see the media and the market take down both the stock and the company along with it. I believe there are specific reasons for this and things Apple can AND should take action against to defend both. When a stock gets broken (and Apple, the stock, is broken now) psychology changes. People look for reasons why the stock is in free fall and they find reasons whether real or not. People must define why things happen even when they are random or unrelated to the underlying company. I believe this is the case. One has to be careful that the stock does not begin to tarnish the brand as people seek out negatives.
So one question as an investor/shareholder I ask as I am sure others do is “If Apple does not believe in their stock at these absurd low valuation levels why should I?” The 10B buyback merely offsets option dilution. At this valuation Apple could bring confidence with a 50B buyback over say 3 years. Even if you had to borrow at low rates and deduct the interest on the loan to do this it would be confidence inspiring and immediately accretive to earnings. You would still have 80B in cash and it would grow 50B plus annually for at least two years. In the meantime after investment gains Apple’s cash erodes about 3% annually to inflation which is almost $4 billion per year.
Additionally a dividend could be paid ahead of the fiscal cliff with no net change to Apple’s balance sheet at the end of 2013. The sensitivity to the coming tax changes would signal Apple’s management cares about shareholders. Right now I’m not sure that belief is held anymore. You could also issue a special dividend or increase the annual dividend as a show of the boards confidence in the future. Options are plentiful. No action is not the best option here.
Remember a stock is nothing more than a piece of paper if dollars do not come back to shareholders. It is similar to gold. Gold pays nothing. Apple right now pays 2% but it would take 50 years at that rate to get your investment back. Not significant enough to support the stock or attract shareholders. A stock without a significant dividend becomes just something that you hope somebody will pay you more for down the road.
It pains me as an Apple fan and shareholder to watch a great company and stock both suffer at the hand of the media and market while Apple sits by and does nothing to defend either. Apple has blown away earnings on top and bottom line before only to see shares fall on that press release. At some point psychology can get so bad that people will always hold the stock down at absurd low multiples just waiting for failure whether it takes a few years or a decade. Sentiment now thinks Apple is becoming the next Sony. Even if you crush earnings the next few quarters this sentiment may not change. People will always think Apple is just a few quarters away from its eventual decline. A non virtuous circle
The weapons Apple has to show confidence are many. Significant buyback of shares would be the biggest vote and most effective tax wise. Second is a dividend increase and special dividend with possible pull forward ahead of the cliff. Last is a stock split. While I know you think this makes no difference I disagree. There is a psychology and obsession with high share prices. High prices mesmerize people. I was a psychology major and see it firsthand on tv and in person. Real world prices matter and even though it’s just slicing the pie up people cannot make the disconnect. Even the MBA’s and professionals know technically there is no difference they too fall prey to this. It is human behavior. A 10 or 15 for 1 split would alleviate this and show the company is confident in the future. I argue if it makes no difference then just do it. At worst you get an advantage you did not think existed. It will get everyone off the high share price obsession which is very real. 99% of investors don’t know how a $500 or $700 stock can be “cheap” yet Apple is.
I close with thanking you for time and consideration. Also would like to say I think you and the entire team are doing a fantastic job. I follow Apple closely on a daily basis as it is my largest investment and in my view nothing is broken with Apple products. However with the financial management and stock management there are some things you may wish to consider and plead that you do.