AAPL Down Against The Tide
Stocks are heading higher following confirmation that Al Qaeda leader
Osama bin Laden was killed by
U.S. special forces. Shares of AAPL are off nearly $1 versus a positive tech market. Upcoming catalysts include
Steve Jobs' healthy return; the WWDC starting June 6;
iPad 2 supply stabilization; the
iPhone 5 launch this summer / fall; smartphone push into China and emerging markets;
iTunes in the cloud; the continued evolution and adoption of
Apple TV; and new initiatives such as video platforms, books / publishing and social (
Ping). Shares of Apple trade at
12x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
China Key To Apple's Future Growth (MacObserver) According to analyst Brian White of Ticonderoga Securities, "Apple fever" is spreading across China. The white iPhone 4 had “quickly” sold out in all four of Apple’s flagship Apple Store locations in Beijing and Shanghai, and pre-orders for iPad 2 in Hong Kong had also sold out. Brian believes China will be one of the most important drivers of the company’s growth over the next decade.
Read » Apple Should Use Intel For Smartphone And Tablet Chips (Barron's) Piper Jaffray semiconductor analyst Gus Richard believes that since “
Intel has no market share in the next wave of computing,” the company should consider becoming the foundry to manufacture the custom microprocessors that Apple designs into its iPhones, iPods and iPads. Right now that belongs to
Samsung, however the two companies are locked in lawsuits which could provide Intel an opening.
Read » Is Apple Building Two Versions Of The iPhone 5? (The iPhone Download Blog) According to an employee of an Apple part supplier, the company may be building two different iPhone 5 models for release this fall; a normal and pro model. Apple may just be testing different components for reliability and quality before final production of one device.
Read » iMacs Rumored To Launch This Week (Apple Insider) Apple is to launch new iMacs tomorrow according to the latest barrage of rumors online over the weekend. The new iMacs will have Sandy Bridge and come with the company's new Thurderbolt technology even though there is still only a handful of drives available for the technology.
Read more at Business Insider.
Read » Apple Still Expanding The Company, Doesn't Need To Offer A Dividend (Seeking Alpha) Apple has one of the largest cash inventories in the world at about $65.8 billion. But why does Apple not offer a dividend to investors? The answer is not easy, but one theory is that Apple has not finished expanding the company to their satisfaction. Therefore the cash flow that is considered a "surplus" is actually money that will be reinvested back into the company to continually innovate and create new products. Simple.
Read » Profit From Various Option Strategies This Week (Seeking Alpha) Investors looking at the big picture could execute a buy-write on AAPL May 6 355s. This is the best strategy due to the risk-return profile. If that is an uncomfortable level of risk, utilize the 350s. An alternative strategy is to sell out-of-the-money puts and collect the premium without having to purchase the stock outright; the 340s and 345s are attractive for this purpose.
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