Sunday, October 28, 2012

$AAPL - Thoughts on Apple Stock Randomosity

  • $AAPL - Thoughts on Apple stock...
  • The stock has corrected quite a bit since hitting $705. There are bears and bulls telling us where the stock goes next. On the one hand, the stock is undervalued at 11x earnings and consumers love the Apple ecosphere. On the other hand, Apple has had a long run and faces the issues many other stocks have had after long runs. The stock is over-loved, over-owned, and the need for consumers to constantly upgrade to the latest hardware is diminishing .
  • By the way, I don't own any Apple stock. But I do own the QQQ, which is about 110% Apple stock from what I read. (Okay, maybe not that much but you know it's way too large of a percentage. Add in Amazon and Google, and the Nasdaq 100 is more like the "Nasdaq 3 + 97 other ones")
  • Heading into earnings this past week, I was thinking about buying some shares. After all, it was heading down into earnings, and I've made money before by going the opposite way the stock is moving ahead of the conference call. This time, I decided not to. It turned out not to matter, as the stock has basically been flat since the conference call. Not the 5-10% move I was expecting!
  • After the earnings announcement, the stock was halted initially. Thats usually not good news. But the stock didn't do anything.
  • Anecdotally, a lot of my android phone coworkers have jumped on the iPhone 5 bandwagon in recent weeks because of the (finally!) upgrades to LTE network and a bigger screen. While some of the Android phones still have better tech specs, at least the iPhone is now in the modern age with the faster wireless speed. Plus, they wanted the Apple iTunes ecosphere with the music, apps, etc.
  • That being said, you wonder about the future upgrade cycle for both the iPad and iPhone. After all, how many more megapixels on the camera do you need? It seems like this may be a problem for all mobile device manufacturers going forward. The mobile devices are providing enough technology to meet the needs of consumers. It's like the PC business. Do you need to buy a PC every other year or is the one you bought a few years ago still hanging in there? So we see what is happening to $DELL and $HPQ stocks, right?
  • Apple said the reason is that they're having trouble meeting demand for the new iPhone 5. Here in Sacramento, I haven't heard of any issues getting a new iPhone.
  • On Apple's earnings call, executives attributed the guidance estimates to a shorter December quarter and a stronger U.S. dollar.
  • Another issue with Apple is that the product release cycle stretches out over a year. Nothing new will be announced for awhile. So the initial excitement over new products lasts a few months, then folks just wait for the next release. Why upgrade if you know the next product is going to be announced in a few months?
  • There is also a lot of competition from Android phones. There are some high quality Androids available. But I think with the latest iPhone 5 upgrades, maybe there is more reason to stay with or go to Apple.
  • I have the March 2012 "new" iPad. So it's a little sad that a November 2012 "new" iPad is being released. I was thinking about trading mine in and upgrading, but I don't think spending the extra money on top of the trade-in value is worth it.
  • Now, all that being said, I'm upgrading my iPhone 4 to an iPhone 5 in a couple of weeks. I want the LTE speed and the bigger screen. I'm also leaving ATT for Verizon. ATT is a bit spotty in Sacramento and barely works at my office, where Verizon is full bars on phone and data.

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