My Own Analyst

CrApple

While the quarter was in line on EPS and slightly ahead on sales, the guidance for Q3 on sales is pretty bad (33.5-35.5 billion compared to 39.43 billion consensus and 35.0 billion last year).  

On the other hand, they raised their share repurchase plan to $60 billion and expect to complete it by 2015.  They also boosted the dividend by 15% to 12.20 per year (at 400, this is 3.05%).  To buy back stock, they will be borrowing apparently.

 

 

AAPL Update

Question on AAPL going into report next week...

Stock down today on CRUS.  This is a hard call - not a good quarter.  The question is what's priced in.  I liked the stock, but it has been acting weakly.  I expect a bounce after earnings, but it probably breaks 400 between now and then.

INTC - Nice Q

The quarter was in line, but, importantly, guidance was good.  The full year expectation had been 1% sales growth, but the sales guidance is slightly higher and the company thinks it can do 60% GM still.  I think an even friendlier piece of news is that they reduced their CapEx guidance by $1 billion.  This is bad for AMAT and maybe KLAC by the way.  INTC up nicely!

 

 

CSCO Jacks Dividend

CSCO boosted the quarterly dividend to .17 from .14:  +21%

Sticking with this one...

 

P.S.  Here are my 4 stock picks for my quarterly contest (I got smoked last quarter!):

• ANV
• MAKO
• PLPC
• FLO (short)

 

INTC Update

I figured out the technicals first (earlier this week, when I shared my bullish view), but here is what's going on fundamentally.  INTC is likely going to be making chips for AAPL for mobile.  They are adopting a smart strategy of partnering with CSCO and ALTR now (new) in order to get better returns on their capital (foundry).  I think that this is a "game-changer" and could impact the way people think about INTC as being a desktop dinosaur...

AAPL Not Poisoning Market

AAPL fell a bit below my 461 best guess, where it is now, bouncing just in front of 2 units oversold.  Again, while I think the likely scenario is a good bounce, it's not something where I want to focus.

Remarkably, the rest of the market is overcoming the -0.35% impact of the AAPL decline, with the S&P 500 breaching the magic 1500 we have discussed.  I continue to feel like a little caution is warranted due to this gap below, but I think that the trend is higher.  1525 is the next resistance, and this dates back to action from Q4-07.  In reality, we are just trying to guess when some profit-taking kicks in, and it has been a fool's game so far.  At 1501 high today, the S&P was .66 overbought, and 1525 would be .87.  

My best advice is to respect the breakout if not embrace it.  This is the type of market where you buy dips, like ALB that I pointed out earlier or IIVI, which we are adding to in Top 20.  Every sale I am making looks stupid, but hopefully only a little stupid!

For Carlos, by the way, a little recap on Top 20:

We trimmed EZPW, SMCI and TITN to add to IIVI, LQDT and MASI.  EZPW and TITN were 1.5-2%, while SMCI was closer to 3%.  We cut that position from about 8% to about 5%.  IIVI and MASI were about 1.5%, while LQDT was about 3%.  We took that one from about 4% to about 7%.

AAPL Set-Up

I am sticking to my 461-ish kind of low that I discussed the other day.  I sure wish people didn't care so freaking much about the name!  At 461, it is -1.8 units oversold.  -2.0 is 448.  There are a lot of bozos that buy in-the-money calls on this one, so let them get flushed and buy for a move back to the mid-500s...

The report was disappointing because it wasn't a big beat.  Plus, the guidance was good, but not great.  They say that they aren't playing the sand-bag game any longer, but who knows if that is true.  If so, they guided and hit and are guiding in line - the stock should be fine.

The bottom-line:  If you have to, buy.  Better?  Find better action - it's just too crowded all the way around...

Anticipating the Apple Low

The good news is that we are quickly learning that the market's termination of AAPL as a market bellwether isn't resulting in any dislocations at all - we have a healthy market.  While a buy in AAPL isn't likely to necessarily be a great investment, maybe it will.  It's not really my call - it's a massive stock with way too much emotion in it.  On the surface, it looks very inexpensive - so do some other Tech stocks.  Oh, but it's growing!   Yes, it HAS BEEN.  Will it perhaps slow down, maybe a lot?  I showed you a graph the other day how estimates are already coming down - this is what the big boys key off of.

So, you still want to look for the bargain price?  One tool I use but don't speak about often is Fibonacci retracement.  If you Google it, you will learn about it more than I will be able to teach you, and my use is rather simple (I focus on 38.2%, 50% and 61.8%, but there are others who use it differently).  In any event, the 61.8% retracement of the big move from July 2011 to the 2012 peak would be 61.8% of 705-310.  This suggests 461 as an area of support.

I want to point out too that the dividend yield at 461 is fat:  2.3%.  Of course, if you really think 461 is the spot, it might make sense to just pay 489 (where it is in pre-market) or something in between.  The low yesterday was close to 483.

I will also say this:  The chart isn't pretty at all.  If one wants to put a good spin on it, though, it has a good low and cleared the obvious 500 support.

Finally, and you guys will probably like this one:  It is -1.6 oversold at the close last night and -1.95 at 461.  At -2.0, the price would be 458, but keep in mind that that number would be lower if it were to happen later.  It's a today number. 

For you fancy traders, if volatility is high, it might make sense to sell some puts.  The other point is that in anticipating the bounce payoff, I would throw out a few levels:

• 38.2% retrace of 705 to 461 would be 554
• 50dma is 542 but falling
• Important old support level is 571 area

PG CEO: Goat to Hero

PG is breaking to multi-year highs.  I had the opportunity to do some research on the CEO a few years ago when he was appointed and found him to be an excellent fit.  PG is a dynamic company, blazing trails in emerging markets while it fights a weak economy in the developed world (attack of private label and trading down).  The company is considered highly innovative.  It was quite shocking a few quarters ago to see this guy McDonald under attack.  And now?  PG is breaking to multi-year highs...

Moral of the story:  Wall Street (Ackman, for instance) gets it wrong and often.  Pardon me for this soap-box shouting

GOOG: Guess I Was Early

We exited GOOG way too early in Top 20, and it hasn't even returned to where we sold it.  It has been pounded after releasing crappy earnings (prematurely).  The stock was overbought going into the number.  I'll have more later - it might have something to do with Motorola.  I am still expecting the "C" share thing to be a fiasco that could knock 5% off the price (another $35).  Looking at the chart, I don't see a lot of support until 650ish.