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AAPL Up On The Big Day
Tech is gearing up for a big day, as both Apple and IBM get ready to announce quarterly earnings. The market is up on Citigroup‘s third straight quarter of profit while shares of AAPL are racing ahead of today’s earnings release after the close at 5:00pm ET. Other catalysts include the Mac event on Wednesday, October 20th; monthly NPD data (Mac / iPod business); holiday iPhone sales updates and carrier diversification; holiday iPad sales updates and expansion; new content revenue streams such as video, books and social (Ping); and the uptake of the newly refreshed Apple TV. AAPL trades at 18x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Trading AAPL Ahead Of Tonight’s Earnings (Various)
Idea’s going into the call:
- PowerShares QQQ Is 21% AAPL (Market Watch): PowerShares QQQ provides liquid exposure to U.S. stocks with a tilt to the tech sector. With about 21% of its assets in Apple, the ETF’s fortune is closely tied to the tech giant. If you think the stock is going to soar but are a bit more risk adverse, might be worth investigating. Google is the second-largest holding at 4.7%.
- Apple Staying Above Water (Seeking Alpha): Given currency wars, consumer spending levels and competitors, wait until the company releases earnings to do anything with the stock. If you are short a few put contracts, unwind as they expire.
- Consider Call Spreads To Protect Profits (Seeking Alpha): How should investors protect Apple profits in 2012 leaps as Apple heads into earnings? 1) Take the profits; 2) Sell the entire position and try to get back in at a cheaper price (pretty risky); or 3) Consider a call-spread (complex but efficient).
Apple Too Pricey For Dow Jones (Los Angeles Times)
Don’t anticipate shares of Apple to be added to the Dow Jones Industrial Average any time soon. Considering the index is price-weighted (highest-priced stocks in the index have the greatest effect, etc.), adding Apple at over $300 would distort the index. The company would have to offer a 5-for-1 stock split to make it remotely comparable to other companies in the index.
Watch Your Back ,Microsoft; Apple Is Coming For The Enterprise (The Wall Street Journal)
Microsoft still has the enterprise locked up, right? Maybe not. AT&T recently announced that it would begin selling iPads directly to businesses on October 28. Direct sales will only be available to businesses who pay their employees’ AT&T Wireless bills, which is only a small slice (about 7% – Goldman Sachs being one of them). Still, this is further evidence that the iPad, like the iPhone before it, is making inroads into the enterprise. Read more here.
The App Store Does Not Have 300,000 Apps…It Has 280,000 (Fortune)
VentureBeat posted an article announcing the App Store had achieved 300,000 apps. That would be growth of 50,000 apps in six weeks. This might not be entirely correct. The tech blog is using a number from Mobclix, an ad exchange network that knows on which apps its ads have appeared, but not whether those apps are still available for download. A more accurate number, based on looking at all the titles and comparing that list to the titles that were there the day before, would be 280,000.
Apple TV Is Better Than It’s Given Credit For (Financial Times)
Apple TV’s modest appearance may be deceptive. This could turn out to be a hobby that becomes just as influential in the living room as Google’s television powerplay. The biggest weakness, Apple TV’s narrower content than it’s primary competitor Roku. But that can and will likely change. Best features are synergies with other Apple devices and with the same A4 processor and operating system as the other members of the Apple family, functionality could expand to include apps. Let’s hope.