THE APPLE INVESTOR: Mega-Cap Stocks Trading At Cheapest Levels In 25 Years, Apple Included

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Steve Jobs looks dapper

AAPL Off With The Market 
Stocks are taking a dive after a three-day rally. Disney is contributing to the downfall by missing analyst expectations. Shares of AAPL are in the red as well with the rest of technology. Upcoming catalysts include the WWDC starting June 6; iPad 2 supply stabilisation; the iPhone 5 launch this summer / fall; smartphone push into China and emerging markets; iTunes and other cloud initiatives; the continued evolution and adoption of Apple TV; and new platforms such as video, books / publishing and social (Ping). Shares of Apple trade at 11x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).

Morgan Stanley Bullish On Mega-Cap Names, Apple Being One Of Them (Barron’s)
Morgan Stanley analysts (led by Adam Parker) with a broad note out earlier this week saying that bigger may be better with the nation’s largest companies, or mega-cap stocks currently undervalued. The team specifically cites Apple (along with Microsoft, JP Morgan, Bank of America and Philip Morris). The investment bank sees the bucket of stocks as a value plays, trading at cheapest levels in 25 years. Additionally, they also think investors are largely underestimating growth rates and total return.

Even Older Apple Devices Are Outselling Android, According To Analyst (Macgasm)
Older generation devices, such as the iPhone 3GS and the first-generation iPad, still outsell their latest Android competition according to analyst Michael Walkley at Canaccord Genuity. The finding highlights Apple’s significant competitive advantage and helps the company offer a tiered pricing strategy at key channels.

Softbank Sees 25x Increase In Profits Thanks To The Success Of The iPhone And iPad (TUAW)
Japan’s number three wireless carrier, Softbank, reported record profits thanks, to the success of the iPhone and the iPad. Net profit for the quarter ending in March climbed to Y47.41 billion ($588.4 million), up 25x from Y1.85 billion in the same quarter last year. A rise in smartphones was a “huge factor” in pumping profits. Apple has said that sales of the iPhone doubled year-over-year in Asia-Pacific regions.

Apple Bucks The Trend, Has Nokia In Its Sights (iSuppli)
A new survey by iSuppli has confirmed that Apple was the best-performing smartphone vendor in the first quarter of this year, while Nokia and Research In Motion posted double-digit declines. The entire smartphone market contracted 1.5%, the first sequential decrease since the beginning of 2009. With the notable exception of Apple’s iPhone, shipping more than 18 million units or nearly a 15% sequential increase to grab the number two mobile phone spot globally. Nokia, which is holding on to the top spot for dear life, shipped slightly more than 24 million units.

Google Taking On Apple With Video On Demand And Music Service (Apple Insider)
YouTube is officially expanding into streaming full-length movies online for rent. The company launched new initiative that will see thousands of major Hollywood studio films available for rent in an attempt to challenge Apple and Netflix share of the Video on Demand (VOD) market. Read more at Business Insider. Google also launched its music service, Google Music Beta, competing directly with Amazon and Apple’s future cloud music service.

Should Apple Stick With Intel On Macs Or Move To ARM? (Barron’s)
Should Apple help Intel? Ben Reitzes at Barclays Capital thinks so, suggesting that Apple help the chip giant leap from ageing PCs to the future of smartphones and tablets. Apple, which already uses Intel Core 2 Duo, i5 and i7 cores in laptops and desktops, could adopt Intel’s Atom core. He also goes on to say that Apple will be the first in the computer hardware sector to embrace ARM for some Macs, as early as the second half of 2012.