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AAPL Rising In Down Market
Stocks are diving on news of huge miss in consumer sentiment reported this morning, and as investors gauge the economic fallout from the 8.9 earthquake in Japan. Shares of AAPL are bucking the trend, up over $2 on the release of the iPad 2 today. Upcoming catalysts for the stock include news regarding Steve Jobs‘ healthy return; the March 11 availability of the next generation iPad; monthly NPD data to gauge Mac / iPod businesses; iPhone sales updates on new carrier Verizon, the push in China, as well as the launch of the iPhone 5 anticipated this summer; new revenue streams such as video, books / publishing and social (Ping); moving iTunes into the cloud; and the continued evolution and adoption of Apple TV. Shares of Apple trade at 13x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).Is Apple A Warren Buffett Stock? (Seeking Alpha)
The company clearly passes many of Buffett’s metrics: It has a large and widening competitive moat. The iPad 2 will likely solidify the tablet market going forward. It has a hugely loyal fan base willing to pay nearly any price. It has a straight forward and profitable business model. It has a pile of cash on its balance sheet. Its fundamentals speak for themselves. The management question is an important one, but great CEO’s build great supporting teams. By any metric you are getting an unparalleled return on your investment. Don’t be the average investor and pass up on owning one of the best companies in the world selling at a huge discount.
Amazon Is The Best Suited To Take On The iPad (Forrester)
Market research firm Forrester isn’t putting too much stock in the hype surrounding upcoming Android 3.0 tablets. Instead, the company believes that Amazon, should it decide to enter the market, would be the best suited to take on the iPad. An Amazon tablet (which would likely run Android) could better compete on pricing and it could also take on Apple’s content offerings and retail advantage. Forrester predicts that the iPad 2 will continue to dominate in 2011 with 80% share. Read more at Business Insider.
Even Before The iPad 2 Was Announced, 82% Of Tablet Buyers Going With Apple (ChangeWave)
ChangeWave conducted a survey in February of over 3,000 consumers, before the iPad 2 was even announced, which shows that 82% per cent of those surveyed would chose to buy an iPad. The next best option was Motorola’s Android-based Xoom at 4% followed by RIM’s PlayBook and Samsung’s Galaxy at 3% a piece. Future demand for tablet devices bodes well for Apple. To be fair (although it won’t make a difference), Xoom didn’t launch until late in the month and PlayBook won’t launch until the spring. Check out Business Insider’s Chart Of The Day.
Apple’s Tablet Market Share In 2010 Was Only 83%, Says Research Firm (IDC)
Contrasting Apple’s recent claims that it controls more than 90% of the tablet market, research firm IDC said that the iPad represented 73% of shipments in the fourth quarter of 2010, and 83% for the entire year. Apple’s share of tablet shipments dipped from 93% in the third quarter as competitors entered the market. IDC expects the iPad to retain between 70% and 80% of the market in 2011. For a better analysis including channel inventory considerations, read Sammy The Walrus’s post on Business Insider.
Rivals Working On iTunes Competitors (AppleInsider)
Two Apple rivals are working on separate services to compete with iTunes (its about time, it only launched in 2003). RIM has partnered with 7digital for its PlayBook tablet and Microsoft is cooking up a secret project dubbed Ventura (the company’s third try at this). When RIM’s PlayBook touchscreen tablet ships this year, it will come preloaded with the 7digital store and offer access to about 13 million songs. While Microsoft is reportedly looking into replacing its beleaguered Zune service.
Daily Trader: A Bullish Options Play On AAPL (Seeking Alpha)
If you are bullish on Apple, you have myriad ways to participate in the upside without buying the shares outright. For example, shorting AAPL put options. Investors could have sold the AAPL April $340 put for $7.30 (as of Wednesday) and taken the $730 in proceeds to help pay for an AAPL bull call spread. Take a look to July and initiate an AAPL $345 / $375 bull call spread. This involves buying the AAPL July $345 call for $30.20 (as of Wednesday), and selling the AAPL July $375 call for $15.80. The net cost for the spread is $710.
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