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AAPL Down With Market Despite Strong Holiday Weekend Sales
Stocks are lower today on European debt fears despite strong holiday sales. Shares of AAPL are not immune as the stock is off 1% in early trading. Upcoming catalysts for Apple include monthly NPD data (Mac / iPod business); holiday iPhone and iPad sales updates and carrier expansion (Verizon); new content revenue streams such as video, books, newspapers and social (Ping); moving iTunes into the cloud; and the uptake of refreshed Apple TV. AAPL trades at 15x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Apple The Black Friday Winner With Strong Store Traffic And Sales (The Wall Street Journal)
Apple is likely the big winner of the holiday shopping season kickoff, according to recaps of the Black Friday action from analysts:
- Doug Reid at Stifel Nicolaus noted strong demand at visited Apple stores. His analysis suggests Black Friday price reductions could reduce EPS by an immaterial $0.01 to $0.03 to the December quarter. Overall our channel checks leave him incrementally more positive on the competitive position of Apple products heading into December holiday shopping.
- Shaw Wu at Kaufman Brothers says despite modest discounts, field checks indicate strong foot traffic at Apple stores and third-party retailers despite tough year-over-year comparisons. Checks indicate strong uptake of iPad, iPod and MacBook Air. While the Black Friday weekend accounts for only approximately 10% of holiday sales, he views it as a fairly important indicator of trends.
- ThinkEquity’s Rajesh Ghai believes the 5-10% discounts offered on most Apple products on Black Friday, could potentially have attracted the necessary customer attention and conversion for Apple.
- William Fearnley at Janney Capital Markets says the Black Friday winner is Apple with sales and traffic appearing to be strong and brisk at Apple stores, as he expected.
- Piper Jaffray’s Gene Munster spent seven hours in Apple retail stores to see what’s hot. His findings: 1) the iPad is reaching new demographics; 2) Mac sales are flat year-over-year without iPad cannibalization; but 3) Apple is selling more iPads than Macs. Read more at Business Insider.
MacBook Units To Reach 1 Million Per Month In Q4 ’10 (Digitimes)
Apple’s global shipments of MacBook series notebooks in the fourth quarter of 2010 will reach a monthly average of one million units (up from an average of about 760,000), with MacBook Air models accounting for 20-25% of the volume, according to IDC numbers. Apple’s combined shipments for the first three quarters of 2010 reached about 6.88 million units with market share in the US surging from 6.7% to 12.6%. With the Mac App Store opening in January, new MacBook Pros on the horizon and OS X Lion coming next summer, 2011 will be an interesting year for Mac users (and Apple shareholders). Read more at Business Insider.
The Mac App Store Will Tie The Store To The Finder (Roughly Drafted)
Apple not only announced plans to open a Mac version of its App Store, but slated an aggressive target to begin selling titles within three months. Since iTunes is selling blockbuster amounts of music, why not merge a store into the Finder? Apple is already 20 five years late to the software licensing party. Good thing it’s still years ahead of everyone else in the desktop and mobile computing world.
The App Store Is “The Model Of The Future” (The Telegraph)
The days of packaged goods are numbered, according to John Carmack, technical director at id Software. The Apple App Store model of distribution is “the wave of the future for everything.” Especially in gaming, there’s no need to cut deals with publishers. Small teams are able to create breakout hits (like Rovio with Angry Birds). On this platform, developers deal with fifteen-a-day feedback: interact with the consumers, make changes and get things out.
Apple Is Most Undervalued On Cramer’s FADS CAN List (Seeking Alpha)
Jim Cramer is touting his FADS CAN list of seven stocks that have done well and will continue to do well in the future based on their value proposition and growth, including Apple. Surprisingly, Apple is the most undervalued compared to its peers on the list. Low on both a price-to-earnings as well as a price-to-sales basis. And the only stock lagging it’s target price is Apple, by 15.7%.