cmalak
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- Apr 10, 2013
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- #1
Apple reporting after market close today. Q1 report will be crap but everyone knows that. All eyes on guidance for June (Q2) qtr which is also expected to be crap. More importantly investors will be listening for any hints on capital deployment (dividend hike, share buyback) as 1 of three potential catalysts:
1) Capital deployment (see above). Important but not the real key to get Apple moving significantly back up
2) Product cycles in back half of the year (new IOS, iPhone 5S, maybe larger form factor iPhone...I think small probability of that)
3) New Product intros (cheaper iPhone for emerging markets and China specifically, iTV, and wearable products like iWatch)
Expectations are pretty low (if you saw Caterpillar's results yesterday, you can see what can happen with a low expectation stocks, where they missed on revs and earnings and lowered guidance for both for 2013, and yet the stock reversed after bottoming at $79.50 and is around $84 and change today), so one possibility is that expectations are so low that if Apple reports a slight miss and a slight reduction in next qtr guidance, the stock can still move up from here. Scenario #2: they miss big and guide down big (I am kind of hoping for that
), and you see a big whoosh down (a capitulation move down on big volume) and that would be a great entry point. Anything in the $350-$375 range as an entry point would be very attractive and you wait for the catalysts mentioned above to play out in the back half of the year and into 2014. Scenario #3: they meet consensus estimates and guide to consensus estimates are in Q2, and stock will move up nicely but then be range bound after that until catalysts start emerging in back half of the year.
This will be one of the most anticipated earnings calls this qtr so for those of you who are interested, check it out.
1) Capital deployment (see above). Important but not the real key to get Apple moving significantly back up
2) Product cycles in back half of the year (new IOS, iPhone 5S, maybe larger form factor iPhone...I think small probability of that)
3) New Product intros (cheaper iPhone for emerging markets and China specifically, iTV, and wearable products like iWatch)
Expectations are pretty low (if you saw Caterpillar's results yesterday, you can see what can happen with a low expectation stocks, where they missed on revs and earnings and lowered guidance for both for 2013, and yet the stock reversed after bottoming at $79.50 and is around $84 and change today), so one possibility is that expectations are so low that if Apple reports a slight miss and a slight reduction in next qtr guidance, the stock can still move up from here. Scenario #2: they miss big and guide down big (I am kind of hoping for that

This will be one of the most anticipated earnings calls this qtr so for those of you who are interested, check it out.