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Globe and Mail
33 minutes ago
- Globe and Mail
Billionaires Sell Apple Stock and Buy a Stock-Split Stock Up 510% in the Last Decade
Key Points In the first quarter, billionaires David Shaw and Louis Bacon sold Apple and bought O'Reilly Automotive, a stock-split stock up 510% in the last decade. Apple is struggling to incorporate artificial intelligence into its business, and the company has gone seven-plus years without a groundbreaking new product. O'Reilly Automotive could be a winner as President Trump's tariffs encourage consumers to service older vehicles rather than purchasing new ones. 10 stocks we like better than Apple › The hedge fund billionaires listed below sold Apple (NASDAQ: AAPL) during the first quarter and bought O'Reilly Automotive (NASDAQ: ORLY), a company whose share price rocketed 510% over the last decade, leading to a 15-for-1 stock split in early June. David Shaw's D.E. Shaw & Co. sold 340,900 shares of Apple, trimming its stake by 6%. The hedge fund also added 19,000 shares of O'Reilly Automotive, though it remains a very small holding. Louis Bacon's Moore Capital Management sold 495,800 shares of Apple, cutting its stake 97%. The hedge fund also purchased 240 shares of O'Reilly Automotive, starting a very small position. Importantly, both hedge funds still have exposure to Apple, and neither has an especially large position in O'Reilly Automotive. But investors should still consider both trades for their own portfolios. Here's why. 1. Apple Apple has durable brand moat built on design expertise that spans hardware and software. The company once again led the market in smartphone revenue in the March quarter, and it posted double-digit sales growth in its services segment due to strength in advertising, the App Store, and cloud storage. But its overall performance was still uninspiring. Revenue rose 5% to $95 billion, and generally accepted accounting principles (GAAP) net income climbed 5% to $24.8 billion. Importantly, Apple has struggled to incorporate artificial intelligence (AI) into its business. Analysts thought the suite of generative AI features added last year (i.e., Apple Intelligence) would catalyze a massive iPhone upgrade cycle, but the consumer response has so far been underwhelming, perhaps because the company has repeatedly delayed highly anticipated AI upgrades to its digital assistant Siri. Apple's failure to monetize AI speaks to a larger problem: The company has seemingly lost its capacity for innovation. After a long stint of very successful product launches -- the iPhone in 2007, the iPad in 2010, the Apple Watch in 2015, and AirPods in 2017 -- Apple has now gone seven-plus years without a noteworthy new product. And its inability to capitalize on soaring demand for AI is a troubling continuation of that pattern. Wall Street expects Apple's earnings to increase at 11% annually over the next three years. That already makes the current valuation of 33 times earnings look expensive, but analysts may be overestimating. Apple's earnings compounded at less than 2% annually during the last three years despite the company repurchasing 8% of its outstanding shares. Put differently, had Apple not repurchased any stock during the last three years, earnings would have declined nearly 5% in that period. And with no clear catalysts on the horizon, earnings growth is likely to be meager in the coming years. Investors should avoid the stock right now, and shareholders with especially large positions should consider trimming. 2. O'Reilly Automotive O'Reilly Automotive is one of the largest specialty retailers of aftermarket automative parts, tools, equipment, and accessories. The company operates more than 6,400 stores across North America, serving both do-it-yourself (DIY) and professional customers. It also has a robust distribution network that allows "timely access to a broad range of products," which helps the company retain customers. Importantly, while O'Reilly will be impacted by tariffs on imported automobiles and parts, duties imposed by the Trump administration could actually be a net win for the company. That's because the 25% tax on imported automobiles will raise car prices, encouraging consumers to service older vehicles rather than purchasing new ones. Furthermore, the average interest rate on U.S. auto loans has almost doubled in the last four years. O'Reilly reported encouraging Q2 financial results. Revenue rose 6% to $4.5 billion, driven by 67 new store openings and 4.1% same-store sales growth. Meanwhile, GAAP earnings jumped 11% to $0.78 per diluted share, outpacing revenue growth because the company repurchased 6.8 million shares. Management also raised full-year guidance, such that earnings are forecast to increase 9% in 2025. Wall Street expects O'Reilly's earnings to increase at 10% annually during the next three to five years. That makes the current valuation of 36 times earnings look relatively expensive. Nevertheless, I think investors should consider buying a small position in this stock today. And if the share price declines, they should consider building a bigger position at a more reasonable valuation multiple. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025
CBC
34 minutes ago
- CBC
Proposed Wasaga Beach sale could set 'awful precedent,' environmentalists say
The Ontario government's plan to hand parts of Wasaga Beach Provincial Park over to the local town for tourism development could set an "awful precedent" for other provincially owned parks, environmental advocates say. Premier Doug Ford announced in May that his government would give $38 million to Wasaga Beach to help revitalize the town's tourism scene and support future housing. Part of the proposed plan includes selling the town Beach Area 1, Beach Area 2, New Wasaga Beach and Allenwood Beach. The amount of land being transferred is nearly 60 hectares, a spokesperson for the town said in an email to CBC Toronto. In late June, the province posted a proposal to amend both the Provincial Parks and Conservation Reserves Act (PPCRA) and the Historical Parks Act to support the land transfer. The proposed changes are cause for concern, said Laura Bowman, a lawyer with the environmental law charity Ecojustice. Although the language of the proposed amendments isn't yet public, Bowman said there's already a legislative approval process in place within the PPCRA to dispose of lands greater than 50 hectares, or one per cent of the total park or conservation area in question. So, the desire to change the law suggests there's a desire to dispose of other areas in the future, she said — and to do so in a way that bypasses a legislative vote and avoids scrutiny. "This government has a history of trying to dispose of park lands and public lands," Bowman told CBC Toronto. "I don't find it plausible, frankly, that this is a one-off thing," Bowman said. "This is possibly setting a further precedent in that direction, and the developments are getting bigger and bigger." A spokesperson for the Ministry of Environment denied that the Wasaga Beach changes are more than a one-off. "No other changes are being considered beyond those included in the [Environmental Registry of Ontario]," Alexandru Cioban said in an email to CBC Toronto. Tourism push within ecologically sensitive area The vision for Wasaga Beach is one of the province's latest and largest waterfront tourism redevelopment projects in Ontario. Transferring parts of the provincial park to the town would be especially positive for local residents and businesses, said Wasaga Beach Mayor Brian Smith. "Our vision is and always has been to become a year-round destination here in Wasaga Beach that celebrates the longest freshwater beach in the world, but also the entire ecosystem here," he told CBC Toronto. From an ecological perspective, changes to the beach and the way it's maintained now could have devastating consequences, said Tim Gray, executive director of Environmental Defence. Wasaga Beach is home to the piping plover, a federally and provincially recognized endangered species, Gray said, and the beach dunes across the park play an important role in the region's river system and as a buffer for flooding. "Once these areas are removed from the park, those protections will no longer be in place," Gray said. "We'll set an awful, awful precedent if it's allowed to go ahead." Smith said his "guarantee" is that the town will act as stewards for the environment during the redevelopment process. But Bowman said she isn't confident that it can be done without the "Herculean efforts" provincial conservation scientists made to protect the plovers and their habitat. Even raking the beach and keeping it manicured will prevent the endangered bird from eating, nesting, and successfully hiding from prey, she said. "It really does potentially put the survival of that species in jeopardy," Bowman said. "These are important pieces of land for conservation and biodiversity and important recreation areas for the people of Ontario." Bill 5 sparked environmental concerns All of the environmentalists CBC Toronto spoke to for this story drew a connection between these plans and the government's recently passed Bill 5. The law, which passed in June, removed provincial protections for certain aquatic species and migratory birds — ones that are also protected under the federal Species at Risk Act — and made it easier for the government to exempt companies or projects from complying with provincial laws or regulations. Bill 5, on top of other controversial development flashpoints, such as the sale of Ontario Place and the Greenbelt scandal, has led to a deterioration of trust in the province's willingness to put the environment ahead of investment opportunities, according to Jan Sumner, executive director of Wildlands League, who worked with her organization and Sierra Legal Defence Fund (now Ecojustice) on the current PPCRA. "This is just another example of the Ford government feeling like they can step over the people of Ontario and hand out public land to private developers," Sumner said. The Ministry of Environment spokesperson said via email that the government's support of Destination Wasaga will help "preserve local heritage, create jobs, boost tourism, and drive long-term economic growth across the region." Cioban said changes to the PPRCA would specifically relate to Wasaga Beach Provincial Park, but he declined to provide specific language or details about when proposed PPRCA amendments would be made publicly available.
CBC
34 minutes ago
- CBC
The natural diamond industry is getting rocked. You can thank the lab-grown variety for that
Social Sharing When Aret Oymakas started selling diamonds years ago, engagement ring shoppers came in looking for one thing for their brides-to-be: a real, mined diamond. "It was just a diamond," said Oymakas, owner of Livia Diamonds in Toronto. "And you got what you were able to get … in terms of design and budget." These days, not so much. Lab-grown diamonds have become massively popular in recent years, giving the traditional, mined version a run for its money. Oymakas says natural diamonds made up 100 per cent of his business until 2018 when lab-grown diamonds came on the market in a big way. Now, natural diamonds account for only three to four per cent of his business. According to experts like Oymakas, ethics, cost and the rising price of every other part of life for new couples has chipped away at the popularity of real diamonds. And that's having a big impact on the mining business — including in Canada's North. WATCH | Northern mining industry takes a hit as lab-grown diamond popularity surges: Northern mining industry takes a hit as lab-grown diamond popularity surges 7 days ago Hundreds of people are being laid off at a diamond mine in the Northwest Territories as production halts, signaling a shifting industry. Lab-grown diamonds are surging in popularity, offering a similar sparkle for a fraction of the price. Just last week, Burgundy Diamond Mines announced it would be laying off hundreds of employees and temporarily suspending operations at one of its open-pit mining sites, Point Lake, in the Northwest Territories. A communications manager for the company, Ariella Calin, said the open-pit mine was "proving to be sub-economic," given the recent drop in the value of diamonds. According to data from Tenoris, which tracks diamond retail prices, natural diamonds in stores now cost 26 per cent less than they did just two years ago. Canada exported $2.21 billion worth of diamonds in 2019, making it the third biggest diamond producer in the world at the time. And with three diamond mines in the Northwest Territories alone, the diamond industry employs thousands of people directly in that province and many more indirectly according to experts, meaning declines in the market will have an outsized impact in the North. Mined vs. lab grown? Mined diamonds are forged deep in the earth through heat, pressure and time, before they're dug up, crafted into shape and set into jewelry, such as engagement rings. Lab-grown diamonds essentially replicate that process above ground — using chemicals and extreme heat, diamonds are forged in a chamber in a matter of weeks. "I always make the analogy of ice made in your refrigeration system versus ice made outside in the cold," Oymakas said. "Physically they're identical. There's no difference whatsoever." But some experts stress there is still a difference. Graham Pearson, professor with the University of Alberta's department of earth and atmospheric sciences, says that the natural formation of diamonds deep underground results in a "complexity" you can't get with the lab-grown variety. "What you get with [a natural diamond] is that you're holding an amazing fragment of the deepest part of the earth. A natural diamond is unique," he said. Lab-grown diamonds, he argues, are all the same, made from an exact recipe — like a print of a painting. Why have people flocked to lab-grown? To engagement ring shoppers, however, the only visible difference in the price tag, according to Oymakas. Whereas a two-carat real diamond engagement ring might cost $35,000, Oymakas says a two-carat lab-grown diamond with the same clarity and colour could only be about $3,500. "With the cost of everything going up these days — housing, wedding expenses — people don't want to spend a fortune on a ring," Oymakas said. That means people can afford far bigger stones if they buy synthetic, often still for less than what a natural diamond would have cost. The technology used to make lab-grown diamonds has also dramatically improved since they first came onto the scene, according to Oymakas. He says this allows them to create more customizable stones that have a unique shape or tone for instance, and that's proven to be a draw to customers. Ethics are another reason. Forced labour and child labour are problems in the diamond mining industry in Africa in particular, and the difficult physical work often yields little pay. Many shoppers want to avoid "blood diamonds" — stones mined in African conflict zones that in turn are used to fund rebel movements. While an international grading system called the Kimberley Process has since been instituted to help consumers know where their diamonds come from, there's still debate about how well the system works. Stefanie Beninger, an associate professor of marketing at Nyenrode Business University in the Netherlands who has researched the marketing of diamonds, says the ethical component played a big role in the natural diamond's demise. The blockbuster 2006 movie Blood Diamond starring Leonardo DiCaprio exposed many consumers to the realities of the diamond mining industry. So, years later, when lab-grown diamonds that didn't carry the same ethical concerns emerged on the market, consumers were drawn to them, Beninger said. (Pearson points out that lab-grown diamonds do, however, take a lot of energy to forge in a lab, meaning they're not entirely free of negative impacts either.) Beyond that, Beringer says the shift has been generational. De Beers's famous "A diamond is forever" slogan sold baby boomers and Gen Xers on diamond engagement rings as a traditional symbol of enduring love, Beninger said. But millennials aren't buying it. Beringer says that generation, as well as Gen Z, has faced significant financial challenges, on top of being more socially conscious. "From a functional perspective, [synthetic diamonds] work the same. It's a lot cheaper, and it's more traceable where this came from," Beninger said. And, Beninger says fewer millenials are getting married compared to their parents or grandparents — a Pew Research study found that as of 2021, 25 per cent of 40-year-olds had never been married, a new record. In 1980, that figure was just six per cent. The diamond industry launched a "Real is rare" campaign in 2016, Beninger points out, which attempted to market real diamonds to millennials in a less traditional way. In looking at the sales of lab grown versus natural diamonds, Beninger says it's clear that the campaign didn't pull them back to the mined variety. The idea of a mined diamond as "real" and a lab-grown one as fake just hasn't stuck with younger generations, Beninger said. Northern mining business in trouble For Oymakas, lower diamond prices haven't hurt his business. He says while the price of the rock itself has dropped, people are buying bigger synthetic diamonds or perhaps buying more jewelry because the price is more affordable. But it's a different story for Canada's North, where thousands of people are directly employed in diamond mines in the Northwest Territories. "That region of the country in a lot of cases depends on diamonds for [its] livelihood," Zimnisky said. There are three diamond mines in the Northwest Territories — and all of them are now winding down operations. Diavik diamond mine is set to close early next year, while the Gahcho Kué mine's estimated lifespan is set to 2031. Pearson says the closure of the industry in Canada's North will have a "tremendous" impact — with what Pearson estimates would result in 1,500 direct jobs and many more indirect ones lost, plus an exodus of people from northern communities. The Ekati diamond mine, which the Point Lake mine is part of, was the first in the country when it opened in 1998. To have the industry shutter after only 30 years would be a shame, says Pearson.
