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AAPL Sliding In Positive Market
U.S. stocks are trading in the positive as energy sector shares are boosted by high oil prices. The tech sector opened higher on news that hard-drive maker Western Digital Corp. would acquire Hitachi Global Storage Technologies in a $4.3 billion deal. But the NASDAQ dove shortly after, and shares of Apple are currently about 1% down. 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 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 14x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Apple Is On Target To Deliver 40 Million iPads In 2011 (DigiTimes)
DigiTimes is reporting that Apple suppliers are anticipating iPad 2 production to yield 10-12 million units during the second quarter. With a shipment ratio of 4:6 for the first and second halves, shipments of iPad 2 are likely to reach 21.5-24 million units in the second half of the year. As a result, Apple is on target to meet DigiTimes’ year end total of 40 million units, in line with analyst expectations.
MacBook Airs A Hit With Consumers, Comprise One Third Of Holiday Mac Sales (AppleInsider)
Analyst Ming-Chi Kuo at Concord Securities said that his most recent checks in Asia indicate that Apple shipped a total of 1.1 million new MacBook Airs during the holiday quarter, making the new breed of ultra-thin portables one of the company’s most successful Mac product launches ever. Those figures are about 63% higher, or 400,000 units more than Kuo had initially estimated. The new MacBook Airs quickly grew to comprise more than a third of Apple’s notebook business in the fourth quarter.
No One Can Compete With The iPad On Price (The New York Times)
The iPad 2, like the original, starts at $499. The Motorola Xoom and the Samsung Galaxy Tab were introduced recently, both to generally good reviews but at higher prices. Dozens of hardware manufacturers are scrambling to bring their own variations to market this year: Hewlett-Packard with the TouchPad, HTC with the Flyer, LG with the G-Slate and BlackBerry with the PlayBook. Toni Sacconaghi, analyst Bernstein Research acknowledges that “no one has eclipsed or even matched Apple on pricing.” If that continues to be the case, Apple will likely continue to own the market.
Is Best Buy Going To Equip Their Sales Teams With iPads? (Forbes)
A corporate mobile device deployment source leaked that one of the country’s top 10 largest retailers expects to distribute iPads to each of its on-floor sales associates. This retailer operates 1,100 stores across the U.S. All fingers point to Best Buy. Yet another example of corporate use for faster operations, payments, etc. Read more at Business Insider.
Apple Might Start Developing LTE-Based iPhone With China Mobile (Bloomberg)
China Mobile chairman Wang Jianzhou claims that Apple has “expressed interest” in developing an iPhone capable of running on the carrier’s TD-LTE network currently under development. China Mobile recently won government approval to start large-scale testing of TD-LTE, specifically in Shanghai, Hangzhou and four other cities.
Why Apple Gets A Pass For No Dividend And Stock Split (The Street)
An angry caller on Jim Cramer’s Mad Money wanted to know how Apple could sit on $60 billion in cash and not return that to shareholders and why the stock hadn’t split. Simple. When you perform as well as Apple; when you invent a new ecosystem; when you are the world’s engineering, designing, manufacturing and retailing innovator; when you have changed as many games as they have and when you have made as much money for shareholders as they have… you don’t have to. Stop griping. Start buying. The stock only sells at 15x earnings.
Daily Trader: Apple January 2012 Bull Call Spread (Seeking Alpha)
Risk-adverse but want to go long on Apple? Use a very conservative call spread to minimize the chance of losses. Friday the stock closed at an even $360, and using the approximate bid/ask spreads the $300/$350 spread is going for around $31.75. As long as the stock is above $350 at expiration, it should net just below $50 with commission costs. Using $49.50 as a sale price, this is a 56% return in just under 11 months for Apple to simply maintain its current position. Another option is to go long a 2013 call, and write a 2012. Prior to expiration the 2012 can be rolled forward to 2013 in order to potentially defer taxes until 2014.