Trying to Think it Through

  • Posted: 25 July 2012 07:07 AM

    It looks like I ignored my own metric for the past 2 weeks.  Obviously, the Institutions were not to be found in AAPL’s daily trading volume, and as before, that signals that they already knew what earnings was going to look like.

    This got me to thinking about the next “run up”.

    The next iPhone is going to launch in September (got more thoughts about that) or October.  Several surveys indicate extremely strong pent up demand for this unit.  In any case, in the days before October earnings is it possible that the Institutions aren’t going to be looking for EPS so much, as they are December quarter iPhone sales.

    Could that result in a run up prior to October earnings?  I think it can.  I can see AAPL at $650, or higher, regardless of guidance just given for the September quarter.

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    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

         
  • Posted: 25 July 2012 07:37 PM #1

    I’m thinking the new iPhone will be released in September, a week or two before the end of the quarter. That will allow for a bump in iPhone sales in the current quarter, and setting up the holiday quarter (which shouldn’t really need any setting up) for good numbers. There have been enough rumors and case photos that I believe the new iPhone is now in production and Apple is building inventory for a late September release.

         
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    Posted: 25 July 2012 08:07 PM #2

    Francisco Geraci - 25 July 2012 10:37 PM

    I’m thinking the new iPhone will be released in September, a week or two before the end of the quarter. That will allow for a bump in iPhone sales in the current quarter, and setting up the holiday quarter (which shouldn’t really need any setting up) for good numbers. There have been enough rumors and case photos that I believe the new iPhone is now in production and Apple is building inventory for a late September release.

    I hope you’re right, but Apple’s guidance is 7.65, if they beat this like they just did we’re looking @ about 8.2 earnings per share.  I will be buying only Jan 13 and further out.

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    Waiting to be included in one of Apple’s target markets, but I still own an iPod, iPhone and iMac and APPL stock.

         
  • Posted: 25 July 2012 10:04 PM #3

    It’s possible, but things to derail your plan:

    - Summer doldrums
    - Continuing Euro dramas
    - AAPL sensitivity to above, thanks to Q3 “miss”
    - General FUD, taking advantage of above
    - iPhone specific FUD rumours of delays, yield issues, etc
    - And last but not least, no iPhone release before next earnings

    With a TTM of $42.54, I’m holding out for 540 before getting on the train. That’s a PE of 12.7, a reasonable assumption of bottom of range given the last year or so I think. I’ll also be leaving a couple of bullets in the gun for $530 or lower.

         
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    Posted: 25 July 2012 10:25 PM #4

    rickag - 25 July 2012 11:07 PM
    Francisco Geraci - 25 July 2012 10:37 PM

    I’m thinking the new iPhone will be released in September, a week or two before the end of the quarter. That will allow for a bump in iPhone sales in the current quarter, and setting up the holiday quarter (which shouldn’t really need any setting up) for good numbers. There have been enough rumors and case photos that I believe the new iPhone is now in production and Apple is building inventory for a late September release.

    I hope you’re right, but Apple’s guidance is 7.65, if they beat this like they just did we’re looking @ about 8.2 earnings per share.  I will be buying only Jan 13 and further out.

    $8.20 is a smidge more than the $8.10 Mav posted yesterday. Here it is with my response:

    Apple II+ - 25 July 2012 03:28 AM
    Mav - 24 July 2012 10:24 PM

    Sell now, then.

    Get used to it.  Here’s an early number from me:  $35B revs, 22M iPhones, 19M iPads, 41% GM, $8.10 EPS.

    $8.10 would bring fiscal 12 to about $43.60. As of today, the average professional analyst estimate is $46.80, per Yahoo! Finance. The low is $44.42 and the high is $51.18.

    Are people thinking that Apple changed its guidance methodology, so that guidance will now more closely match results? Why? Just because of the “miss”?

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    The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. — Steve Jobs

         
  • Posted: 25 July 2012 10:47 PM #5

    Apple II+ - 26 July 2012 01:25 AM

    Are people thinking that Apple changed its guidance methodology, so that guidance will now more closely match results?

    No.  Later tonight I’m going to post what I have learned about management’s ending inventory statements.  I think it may portend to a much better quarter than all the shell shocked analysts are currently thinking.

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    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

         
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    Posted: 25 July 2012 11:24 PM #6

    LongAAPLsince02 - 26 July 2012 01:04 AM

    (...)
    With a TTM of $42.54, I’m holding out for 540 before getting on the train. That’s a PE of 12.7, a reasonable assumption of bottom of range given the last year or so I think. I’ll also be leaving a couple of bullets in the gun for $530 or lower.

    I concur.

         
  • Posted: 26 July 2012 12:22 PM #7

    From yesterday: I don?t know all the factors but announcing the product in the last two weeks of Sept would be good.. For the stock at least.  It won’t adversely affect revenue per se to announce early as the drop in sales in the last 2 weeks of the qtr will be overshadowed by sales in Oct -Dec guessing an Oct release, Apple only counts revenue once the phone is activated or signed for by the buyer via FedEx which for online orders virtually elimates the last two weeks of the qtr.  it would certainly drive the stock up via the buy on the news theory.  The low numbers for this qtr are already built in from the guidance.

    Everyone is expecting Apple to drop and be in the doldrums but rise just prior to the iPhone announcement then perhaps fall off till end of Dec early Jan.  Maybe wishful thinking on my part but I can’t see large funds going along with that plan; it’s too predictable.  I think they will start to accumulate earlier than later as the uncertainty in regards to which qtr will be the first to benefit from serious earnings is gone (as per next qtr guidance).  Given various options, uncertainty with other companies earnings, there is nothing much surer than the earnings blowout of Apple in Jan.  Unless you want to get into the maze of corn futures (yes pun intended)

    [ Edited: 26 July 2012 12:24 PM by fas550 ]