AAPL Intraday Updates - Earnings Day Edition (Archive)

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    Posted: 18 October 2011 01:29 AM #46

    I did something similar in a different way.  :D

    I had some winners and some losers and I sold all of them on the way up (net gain, fortunately).  Every trade I have except for my, uh, Raging Bull? (never saw the movie) Oct 410/425 high-wire, high-risk trade is new, and, to my bullish eyes, fairly safe given my AAPL trading range estimates.  My trading portfolio is about half cash and I will try very hard to NOT make any additional bets for earnings.  I may well be leaving some potential gains on the table.  I’m also leaving potential risk OFF the table.  It works for me.

    (Nice series of coincidences with the Red and the $8.88 Ensign btw.  Now all you need to do is head over to Wynn Las Vegas, get a Red Card and eat at Red 8 and you’ll win the table games all night long raspberry LOL)

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    Posted: 18 October 2011 01:45 AM #47

    Gregg Thurman - 17 October 2011 10:22 PM

    Earnings are important.  They tell you how Apple performed against its stated guidance.  But the future is where its at, and to keep AAPL from selling off management must guide in the upper $8.00 area.  I’m forecasting December quarter guidance of $8.81, which implies actual earnings of $13.21.

    Earnings of $13.21 puts TTM at $36.44 which implies a value on AAPL at $580 (ISM at 16).  A 30% ROI in 90 days is what will keep buyers of AAPL in place.

    sometimes the reason for the selloff is simply that it has run.  the people who bought at 352 are at some point going to lock in some gains at 420-440.  come on, it’s been 2 weeks.  i’m sure CNBC will search for some fundamental reason for a post-earnings selloff.  e.g.: guidance, a “miss” on ipods/macs/ipads numbers, etc.  how many quarters has AAPL beaten WS estimates in a row?  i know it’s over 20.  that’s a pattern of growth that trumps whatever ‘guidance’ they bring out.  guidance helps analysts (pro and amateur) figure out estimates for the next quarter, using their respective PO multipliers.  but it won’t be the reason for a selloff if one ensues.  financial media always searches for a fundamental reason for a trading phenomenon.

         
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    Posted: 18 October 2011 01:47 AM #48

    lovemyipad - 17 October 2011 10:18 PM
    Mav - 17 October 2011 10:17 PM

    Yes, but not a particularly nice close.

    Could have been a lot worse.  There’s a gap at 408.  AAPL held up well.


    Its the gap at 389 that concerns me.  :bugeyed:

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  • Posted: 18 October 2011 02:03 AM #49

    IMO the earnings are almost a given at $9.00 plus.  The real differentiator will be guidance.  After this past week-end’s sales it will be more difficut to come in at an insanely low EPS guide number.  What’s in the back of my mind is the possibility that a “reasonably” conservative number wull appear to be surprisingy high. 

    Only Apple really knows what happened this week-end.  What does “over 4 million” really mean?  Is that 4,000,001 or is it 4,999,999?  Also only Apple knows what production capacity really is for this quarter.  Oppening in more countries from day one, Adding more and new countries more quickly after product launch and adding new carriers at initial launch makes me think production is much higher than any one might guess.

    All makes for an interesting guidance.

         
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    Posted: 18 October 2011 02:05 AM #50

    Why, MB?

    Earnings of $8.60 tomorrow translate to about $29.28 ttm EPS.  At 389, a P/E of 13.3.  Once ttm EPS passes $30, it’s _under_ 13.  You really think we’d be down in that basement for long?  I’d buy the dip aggressively with bull call spreads and just smile.

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    Posted: 18 October 2011 02:08 AM #51

    ncgo4 - 18 October 2011 05:03 AM

    IMO the earnings are almost a given at $9.00 plus.  The real differentiator will be guidance.  After this past week-end’s sales it will be more difficut to come in at an insanely low EPS guide number.  What’s in the back of my mind is the possibility that a “reasonably” conservative number wull appear to be surprisingy high. 

    Only Apple really knows what happened this week-end.  What does “over 4 million” really mean?  Is that 4,000,001 or is it 4,999,999?  Also only Apple knows what production capacity really is for this quarter.  Oppening in more countries from day one, Adding more and new countries more quickly after product launch and adding new carriers at initial launch makes me think production is much higher than any one might guess.

    All makes for an interesting guidance.

    Apple hedged big time on 4S sales in part because well, isn’t 4 million+ enough? 

    It also allows Apple more wiggle room for iPhone 5 initial sales.  Over 7 million sold in 3 days would probably be fairly well-received for instance.  Easier to clear the bar (though yes, I’m sure the bloggers and pundits will rightly point out the sandbagging from this year) when you don’t raise it too high on yourself.

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    Posted: 18 October 2011 02:19 AM #52

    Mav - 18 October 2011 05:05 AM

    Why, MB?

    Earnings of $8.60 tomorrow translate to about $29.28 ttm EPS.  At 389, a P/E of 13.3.  Once ttm EPS passes $30, it’s _under_ 13.  You really think we’d be down in that basement for long?  I’d buy the dip aggressively with bull call spreads and just smile.


    Mav, agree that it would not stay there long unless the market is in chaos. I would just prefer to not be on the bus when it makes that stop.  rolleyes  With my earnings estimate, I think it is obvious that I expect AAPL to move higher this week. I have to say the option action in AAPL today was very good IMO.

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    Posted: 18 October 2011 02:22 AM #53

    Mav - 18 October 2011 05:08 AM

    Apple hedged big time on 4S sales in part because well, isn’t 4 million+ enough? 

    It also allows Apple more wiggle room for iPhone 5 initial sales.  Over 7 million sold in 3 days would probably be fairly well-received for instance.  Easier to clear the bar (though yes, I’m sure the bloggers and pundits will rightly point out the sandbagging from this year) when you don’t raise it too high on yourself.


    This is an area that Mav and I have agreed upon for a long time, Apple gives measured growth. I believe they have done this for 4+ years. They control the supply to perfection most of the time. A couple of snafus with iphone/ipad, but most of the time are in control.

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    Posted: 18 October 2011 02:52 AM #54

    With the Euro Debt Crisis likely to maintain headline status for the next few months, even with stellar earnings & guidance tomorrow apple can fall to a P/E of 10x in a almost-worst-case scenario (e.g. widespread european defaults leading to a prolonged global market sell off).

    Regardless, even if AAPL didn’t recover PE wise, in 15 months time a 10x PE will land us at $500 a share.

    No guarantees - especially in the short term, but 15 months out AAPL is pretty close to a sure thing - even if a full blown market meltdown eventuates.

    holding my LEAPS tight.

    [ Edited: 18 October 2011 02:54 AM by Burgess ]

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  • Posted: 18 October 2011 03:00 AM #55

    adamthompson3232 - 18 October 2011 05:22 AM

    Keep in mind also that Apple may have taken orders for a lot more than 4M 4S units. They just shipped over 4M. They could have taken orders for 5M or 6M or who knows how many. They also sell the 3GS and 4. No doubt Apple sold a lot more than 4M iPhones last weekend.

    Excellent observation.

    On a different note, guidance is going to be EXTREMELY interesting here.

    You bet it is.

    If Apple posts, for example, $9.00 EPS can they really guide lower than that for the holiday quarter? No analyst on Earth is dumb enough to think Apple’s actual EPS will be down sequentially in the holiday quarter. So does this mean that Apple HAS to guide a sequential improvement? I think it does. So I’m hoping AAPL posts an insane number for the September quarter as I think they’ll guide 10% higher than whatever they post. And then we are off the f***** races big time.

    Edited to add that last September Q they posted actual EPS of $4.64 and guided to $4.80 for the December quarter (they couldn’t guide a decline). They then posted $6.43 in actual EPS. If AAPL posts $9.00 this September and follows the exact same guidance and actual December Q pattern they will guide to $9.31 for the December Q and then post actual EPS of $12.47. I’ve been calling for EPS of $13.00+ in the holiday Q for over six months and I think we will get it. This gets us pretty close so I’m even more confident about it after going through this math.

    You make an important point that I have been trying to get across about Apple’s performance for fiscal Q2/2011.  Apple’s guidance for fiscal Q1/2011 was $4.80, then reported $6.43.  Now thew important point.  Apple’s guidance for fiscal Q2/2011 (the lowest performer of the year) was 10? ($4.90) HIGHER than that of the just completed December quarter.  But then they reported earnings 3??LESS than fiscal Q1/2011 produced.  In my opinion Apple missed its internal estimates, and the institutions reacted appropriately to that fact.  I also believe that Apple missed its internal estimates in OCT and April, which accounts for the poor performance of AAPL through July.

    Edited again to add that current holiday Q consensus is $8.98 and the highest estimate is $10.30. If AAPL posts $9.00 they will have beaten holiday Q consensus in the September Q. WOW! And if they post $10.00 they will have almost beat the holiday Q highest estimate. Guidance will be higher than what they post for September so we are looking at some insane numbers.

    Yes we are.  In late September when DT was calling for estimates I stated that I couldn’t trust my estimates because the numbers were so large, not just for Q4, but for the Holiday quarter as well.

    Today’s earnings report is going to be very important, but not nearly as important as guidance.  As good as it will be for AAPL following today’s earnings report, AAPL’s pop after January’s earnings report is going to be stupendous.  Which brings up another point.  I believe Apple may guide higher for Q2/2012 than they did for Q1/2012, just as they did last year.

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    Posted: 18 October 2011 03:04 AM #56

    adamthompson3232 - 18 October 2011 05:53 AM
    iOSWeekly - 18 October 2011 05:52 AM

    With the Euro Debt Crisis likely to maintain headline status for the next few months, even with stellar earnings & guidance tomorrow apple can fall to a P/E of 10x in a almost-worst-case scenario (e.g. widespread european defaults leading to a prolonged global market sell off).

    Regardless, even in AAPL didn’t recover PE wise, in 15 months time a 10x PE will land us at $500 a share.

    No guarantees - especially in the short term, but 15 months out AAPL is pretty close to a sure thing - even if a full blown market meltdown eventuates.

    holding my LEAPS tight.

    Crazy question for you - do you follow basketball in New Zealand at all?

    Have a passing interest, although its pretty hard for any sport that isn’t Rugby to get coverage at the moment due to the All Blacks dominance of the World Cup.

    Unfortunately the local basketball scene is not in that healthy a state, for instance a fully professional national league disappeared and instead there is one New Zealand team competing in the Australian League (On the plus side, they did win the league this year). And any young athletes in NZ that are tall enough to be potentially good basketball players are usually pushed into rugby, which is a lot more likely to be financially rewarding - NZs top export after Kiwifruit, Peter Jackson movies, & Jetpacks - is probably Rugby Players.

    We have plenty of local talent though, its quite common to hear a young local player get a scholarship to an american university to play, and we have the odd player in the NBA.

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  • Posted: 18 October 2011 03:05 AM #57

    How quickly does the IV usually fall after earnings?  Is is almost instantaneously first thing Weds morning?

    THanks

         
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    Posted: 18 October 2011 03:12 AM #58

    Gregg Thurman - 18 October 2011 06:00 AM

    You make an important point that I have been trying to get across about Apple’s performance for fiscal Q2/2011.  Apple’s guidance for fiscal Q1/2011 was $4.80, then reported $6.43.  Now thew important point.  Apple’s guidance for fiscal Q2/2011 (the lowest performer of the year) was 10? ($4.90) HIGHER than that of the just completed December quarter.  But then they reported earnings 3??LESS than fiscal Q1/2011 produced.  In my opinion Apple missed its internal estimates, and the institutions reacted appropriately to that fact.  I also believe that Apple missed its internal estimates in OCT and April, which accounts for the poor performance of AAPL through July..

    Thankfully (in my opinion) the “internal miss” in Q2 was likely Supply related (iPad 2 constraints) rather than lack of demand. Some will likely say that screwing up production was worse, but I think if the demand wasn’t there for the item whose production was being screwed up, then that would be a harder problem to fix.

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    Posted: 18 October 2011 03:24 AM #59

    adamthompson3232 - 18 October 2011 06:15 AM
    iOSWeekly - 18 October 2011 06:04 AM
    adamthompson3232 - 18 October 2011 05:53 AM
    iOSWeekly - 18 October 2011 05:52 AM

    With the Euro Debt Crisis likely to maintain headline status for the next few months, even with stellar earnings & guidance tomorrow apple can fall to a P/E of 10x in a almost-worst-case scenario (e.g. widespread european defaults leading to a prolonged global market sell off).

    Regardless, even in AAPL didn’t recover PE wise, in 15 months time a 10x PE will land us at $500 a share.

    No guarantees - especially in the short term, but 15 months out AAPL is pretty close to a sure thing - even if a full blown market meltdown eventuates.

    holding my LEAPS tight.

    Crazy question for you - do you follow basketball in New Zealand at all?

    Have a passing interest, although its pretty hard for any sport that isn’t Rugby to get coverage at the moment due to the All Blacks dominance of the World Cup.

    Unfortunately the local basketball scene is not in that healthy a state, for instance a fully professional national league disappeared and instead there is one New Zealand team competing in the Australian League (On the plus side, they did win the league this year). And any young athletes in NZ that are tall enough to be potentially good basketball players are usually pushed into rugby, which is a lot more likely to be financially rewarding - NZs top export after Kiwifruit, Peter Jackson movies, & Jetpacks - is probably Rugby Players.

    We have plenty of local talent though, its quite common to hear a young local player get a scholarship to an american university to play, and we have the odd player in the NBA.

    Wow, you know quite a bit. Thanks for all the info! This guys looks good. He’ll likely be a top five NBA draft pick in a few years at most.

    http://college-basketball-blog.blogs.cbssports.com/mcc/blogs/entry/26283066/31192289

    You Betcha! In the meantime he will just have to be content playing for New Zealand at the London Olympics next year.

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  • Posted: 18 October 2011 03:34 AM #60

    iOSWeekly - 18 October 2011 06:12 AM
    Gregg Thurman - 18 October 2011 06:00 AM

    You make an important point that I have been trying to get across about Apple’s performance for fiscal Q2/2011.  Apple’s guidance for fiscal Q1/2011 was $4.80, then reported $6.43.  Now thew important point.  Apple’s guidance for fiscal Q2/2011 (the lowest performer of the year) was 10? ($4.90) HIGHER than that of the just completed December quarter.  But then they reported earnings 3??LESS than fiscal Q1/2011 produced.  In my opinion Apple missed its internal estimates, and the institutions reacted appropriately to that fact.  I also believe that Apple missed its internal estimates in OCT and April, which accounts for the poor performance of AAPL through July..

    Thankfully (in my opinion) the “internal miss” in Q2 was likely Supply related (iPad 2 constraints) rather than lack of demand. Some will likely say that screwing up production was worse, but I think if the demand wasn’t there for the item whose production was being screwed up, then that would be a harder problem to fix.

    Best information that I have gleaned is that the problem was iPad displays, not demand.  You’re correct though, fixing a production problem is much better than lack of demand.

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