Large, profitable Technology companies represent an increasing share of corporate profits. This phenomenon has enabled the corporate debt to pre-tax profit ratio to remain relatively stable since Q4 2017 with a MEAN multiple of 4.6x and a MEDIAN multiple of 4.4x over the Q4 2017 - Q4 2020 period. The outlier was the data collected … Continue reading Corporate Debt to Pre-Tax Profit Ratio Is Relatively Unchanged Since 2017
Tag: technology companies
Apple (AAPL) agreed to pay a $113 million fine related to throttling of iPhones. The fine comes with all of the usual B.S. about not having to admit guilt. Apple generated $81 Billion of Operating Cash Flow in the most recent year, thus the fine is meaningless. This government action is without teeth and reminds … Continue reading Apple Slapped On the Wrist. Law Enforcement Lacks Teeth.
Fed Chair Powell's comments on Thursday were in-line with our perspective published on Wednesday. The Fed will continue to work to "stimulate" the economy (it can't of course, it can only inflate asset prices). However, every time Chairman Powell mentioned "full employment" in his speech I couldn't help but think of the job dislocation that's … Continue reading Dovish Fed Policy Speaks to A Weak Economy and Permanent Job Dislocation. We Propose A Solution.
The Fed's behavior in recent months has been something out of a horror movie. The low interest rate, expansionary monetary policies introduced by former Fed Chair Bernanke and continued by former Fed Chair Yellen have dramatically accelerated under current Fed Chair Powell. Bernanke dealt in $Billions, Chairman Powell prefers $Trillions. Click any of the charts … Continue reading The Forever Bubble-Blowing Fed
Short-term greed has gripped some of the world's largest Technology companies. A number of CEOs and Boards are guilty of trading long-term innovation and customer value for short-term share price support. Innovative companies (we provide examples), have bucked the buyback trend. Record high corporate debt levels have funded record share buyback activity in recent years. … Continue reading Binging On Buybacks At Innovation’s Expense
I sound like a broken record when I say for the umpteenth time "the market is going to roll over." We wrote in recent weeks the importance of being an active manager. Only active managers can navigate the choppy seas of this turbulent economy. Further, we always favor quality management teams and quality names. However, … Continue reading Quality Is King
Layoffs are not only taking place across the retail, restaurant, travel and hospitality industries. A number of other industries including the Technology industry have absorbed their fair share of layoffs as well. Some early-stage Technology companies are conserving cash by replacing cash compensation with equity. The list below includes approximately 60 companies (primarily Tech companies) … Continue reading Layoffs Have Extended Beyond Hotels and Restaurants