THE BEARING FRUIT, OR DOWN TO THE CORE? EDITION
10 NOVEMBER 2011
IS APPLE STILL BEARING FRUIT, OR IS IT DOWN TO THE CORE?
What Does History Tell Us About CEO Departures?
Whatever it is she's facing or debating in her life, you can rest assured that your savvy, well-schooled reporter seeks only the best advice from the most top-notch of experts. That's why, were she studying Apple, Inc., at this moment, considering whether the stock is a buy or a sell, she'd turn immediately to the insights provided by the award-winning, widely heralded Investor Advisory Service.
Here's a peek at what these expert analysts had to say about Apple, Inc., in the November 2011 issue, published Oct. 28:
It was an eventful quarter for Apple. Tim Cook took over as CEO, and Steve Jobs lost his long battle with pancreatic cancer. Historically, the departure of a legendary CEO has frequently coincided with a peak in the company's stock price. Apple could prove an exception, however, as Jobs' departure was related to his health, not to diminishing company prospects.
Still, Q4 looked like a little bit of a stumble. iPhone sales disappointed analysts, coming in at 17 million units, down from 20 million last quarter. Apple says that anticipation around the release of a new model pushed demand back into Q4. Early reports of strong iPhone 4S shipments seem to confirm that idea, and we expect huge sales in Q1. Apple sold 11 million iPads, up from 9 million last quarter. Laptops grew 26% year-over-year. iPod sales continue to decline. All told, quarterly revenue grew 39% to $28.27 billion. EPS increased 52% to $7.05. Surprisingly, overall gross margin is not forecasted to expand in the holiday quarter. We think the company is sandbagging somewhat, but we would not be surprised if Q1 2012 represents a peak, followed by at least a year of decline. Apple now has $82 billion in cash and securities. The company hints it may be considering a significant share buyback.
AAPL (398.62) is a buy up to 502.
What's your take on Apple, Inc., following the company's very eventful quarter? Do you agree that it's a buy? Voice your opinion in the
SC Apple Forum and if you're so inclined, post your most recent stock study on the company.
WHAT'S "OPERATION TWIST" GOT TO DO WITH IT?
Stock Market Turns Around After Trying Summer
If that passage from the Investor Advisory Service whetted your appetite, your reporter is willing to bend the rules just a teeny, weensy bit more to offer you some additional insights for you to ponder. One that is always on our collective minds is the trend in the overall market. Here's what the IAS has to say about that in its Investment Comments:
What a difference it makes to turn the page on one quarter and begin another. Up until September 30, the market had endured a difficult summer. The year to date loss on the S&P 500 was 8.7%. While it is only a coincidence of the quarterly calendar, from October 1st through the 17th the S&P 500 gained 6.1%. Why has this happened?
While much of the economic news before the end of the quarter pointed to stable-to-slightly-negative growth, since then the numbers look stable to positive. Responding to this pre-quarter end weakness, on September 21st the Federal Reserve announced a program called "Operation Twist." The Fed concluded there are "significant downside risks to the economic outlook, including strains in the global financial markets . . ."
Do you feel as if your reporter just left you hanging by a thread? That's because she did. To learn more about "Operation Twist" and read the rest of the IAS's insightful opinion on the economy, check in at The Town Crier, located in the SC Forum.
Your reporter would be remiss if she failed to offer this disclaimer:
The above was reprinted with permission from the November 2011 issue of the award-winning Investor Advisory Service, published on Oct. 28.
Did you know that StockCentral subscribers can save 50 percent on a subscription to the Investor Advisory Service? See the StockCentral discounts page for details. The issue also includes three new buy recommendations and no sells. (You'll need to subscribe to check these out! Your reporter can only pull so many strings. What are you waiting for?!)
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TODAY'S ENTIRELY RELEVANT QUOTATION
"The final test of a leader is that he leaves behind him in other men the conviction and will to carry on."
— Walter J. Lippman,
the late Pulitzer-Prize winning journalist