Posts Tagged ‘AAPL’

Using Options to Trade Apple’s (AAPL) iCloud News

Wednesday, June 8th, 2011

Apple iCloud News The much-ballyhooed Apple Worldwide Developers Conference was held Monday, and Steve Jobs was there in his ever-present turtleneck to offer the keynote address.  As expected, among the product team’s major announcements was a new operating System – OS X Lion – and the iCloud service that will sync a user’s personal information (email, contracts, calendars, iBooks, song purchases, and more) among Apple devices and the web. Example – buy a song on your iPad and it will be available to download on your iPhone without having to plug anything in.

This week, however, Apple shares have dropped 3% in a solid demonstration of “buy the rumor, sell the news.”  In the two weeks leading up to this meeting, the stock rose roughly 4% and has sharply backpedaled beginning in early-afternoon trading on Monday.

Perhaps investors were hoping for an iPhone 5 announcement or were underwhelmed by the unveilings they did hear. Either way, the reaction is making Apple investors wince, at least for a little while. (more…)

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How Far Can Apple Inc. (NASDAQ:AAPL) Go?

Thursday, October 7th, 2010


On Tuesday, we  showed potential strategies for option traders who wanted to jump into the long or short side of Ford Motor (NYSE:F) following the stock’s new “overweight” rating at Morgan Stanley.  In a similar vein, today we will examine potential strategies in Apple Inc. (NASDAQ:AAPL). Earlier this week, the company was initiated with a new “buy” rating and a 12-month price target of $430 at Ticonderoga. Based on the stock’s closing price on Friday, that’s more than 50% of anticipated upside in the shares.

This magnitude of move certainly isn’t out of the question; AAPL shares have gained 55% in the past 12 months and are up 37% on a year-to-date basis.  But skeptics question the potential duration of this uptrend. While the trend can be “your friend,” it’s nearly impossible to predict when this upward momentum might draw to a close. Evidently analysts at Ticonderoga think it won’t be reversing course for a long while. (more…)

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AAPL and PANL or, Looking Behind the Curtain (For Values)

Wednesday, September 15th, 2010

Looking behind the curtain for investing choices About a year ago – on September 18, 2009 – I wrote about a company called Universal Display (NASDAQ:PANL), which is at the center of the blossoming OLED technology sector and its derivatives. OLED stands for organic light emitting diode and is a relatively inexpensive, high-efficiency method of producing light and images.

PANL’s focus is more on the development of new technologies within the OLED space and patents as opposed to distributing the actual products to consumers themselves. I bring this up not to gloat about the tremendous year the stock has had, but to remind you about hidden gems that are usually just out of sight when it comes to investing. (more…)

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Two Ways to Play Apple (AAPL) Earnings

Monday, July 19th, 2010


Apple (NASDAQ:AAPL) stock and the company’s product line are both definitely favorites of mine.  If you have followed my writing any amount of time, you’ll know that the smartphone universe and the players within it have been under my microscope for almost two years now.  Apple, of course, is more than a smartphone company, but its number-one product is the iPhone, so many analysts tend to put great emphasis on sales of that product.  Even with strong iPhone sales, the other products do certainly play a role and we will want to see growth across the entire product line.

The iPhone 4 was released this past quarter and the bulk of the new iPads (3G and variants) sales will be included in this quarter’s earnings as well.  Now that we are about three months past the iPad’s April 3 release, data on this device’s sales will also be key.

Based on anecdotal evidence and a statement from Apple, iPhone 4 was a record breaker in new product sales. Obviously there is the antenna issue with this product, but Apple is applying a band-aid in the form of a free case for everyone who bought the phone.

Even though some think Steve Jobs’ tone was almost “condescending” in his conference on Friday to address the issue, the equity market made its own decision and the stock actually held its ground among a sharply declining broader market.  But given reports that the iPhone 4 drops twice as many calls as its predecessor, future sales are certainly a concern, as are costs to the company and a permanent solution  to the issue.

Coming into its Tuesday earnings report, Apple has some serious expectations behind it.  According to several sources, the consensus second-quarter earnings expectation is about $3.10 per share, up from $2.01 a year ago. Most are looking for a revenue increase of about 76.8% to $14.7 billion year over year.

Apple has a tendency to play down its future expectations and is typically quite reserved with any commentary it makes to that end.  They do, however, have a history of beating the Street’s estimates.  In fact, Apple has exceeded analysts’ expectations for the past five quarters, sometimes by as much as 76%.

(more…)

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Apple (AAPL) iPhone4 Conference Coming Friday

Friday, July 16th, 2010

Apple's iPhone 4Apple (NASADQ:AAPL) is doing the unthinkable today; they plan to publicly address the issues with their newest device.  The company is under extreme pressure and has even been sued over the “external antenna” design flaws with the iPhone 4.

Apple has a history of saying practically nothing in between its earnings reports and product launches.  Even in the forward-looking statements provided on earnings calls, extreme lack of detail is the norm, leaving us (the general public) to really wonder what is going on in the “Wonka Chocolate Factory.”  Heck, the iPhone doesn’t even come with a complete user manual; you have to dig through the web for that one. (My grandfather still can’t get past making a call and texting).

That strategy has worked thus far. The Apple mystique and magic marketing machine has pushed product sales to record levels and in turn AAPL stock, which is up $42.00 or 20% year to date (it got as high as $279.00 on June 21).  But Apple now faces a serious challenge with this iPhone 4 “problem.” Of course there may be potential costs associated with repairing/recalling the hundreds of thousands of iPhone 4s produced.  But the bigger issue may be the firm’s reputation and whether the “Kool-Aid” they have so far been able to get just about everyone to drink is in unlimited supply after all. (more…)

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A Couple of Ways to Play Google (GOOG) Earnings

Tuesday, July 13th, 2010

While Google (NASDAQ:GOOG) is not exactly known for a complete lack of volatility around earnings, its movements have not been all that violent (on a percentage basis).  Thursday’s earnings report may be a pivotal one for Google, with the smartphone wars continuing to heat up.

The Blackberry, part of the Research in Motion (NASDAQ:RIMM) family, still leads the sector with a 41% market share in the U.S. and of course the iPhone craze powers on, but Google’s Android operating system is still growing at an exponential rate.  I like to think of it as the 1980s Microsoft (NASDAQ:MSFT)/Apple (NASDAQ:AAPL) saga, redux.  Back then, MSFT, like Google, offered its “window” operating system to multiple computer makers.  In doing so, the company got folks across the world and on different hardware platforms addicted to its products.

Apple, in typical Jobs’ style, only sold its operating system software (and all software, for that matter) for Apple-made PCs.  This strategy hurt Apple in the early days.   Obviously, things have improved for the company and now the iPhone is like the Rubik’s Cube of the 2000s.  Apple has done a good job at getting the public addicted to a cool (albeit flawed) product.  Now that Consumer Reports won’t bless the iPhone 4 because of antenna issues, I’m looking forward to seeing how Apple spins it. (more…)

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Anecdotal Evidence: You Could Have Waited to Get Your iPhone

Friday, June 25th, 2010

The question is, why would you want to?   Earlier this week I wrote about the man who was camped out in front of the Apple (NASDAQ:AAPL) store for seven days to ensure that he got his new iPhone 4.  Well. Mr. Wagoner maybe could have saved himself a bit of heat stroke and heartache in the sweltering Texas sun.

This morning, I took a ride by the Apple store at 10 a.m. to check out the insanity.  Lo and behold, the lines had died down to about 12 deep.  There was still a fully armed Dallas police officer to keep everyone in line; you know how those Apple users can be rowdy and unruly… :-)

But in fact, all of the prospective customers who showed up at the Highland Park Apple store yesterday were able to claim their new shiny glass devices and could, in fact, have waited until Friday to claim their phones, as there were still some in stock this morning. According to a very helpful and seemingly knowledgeable rep (called “Geniuses” at the Apple Store, btw), they were beginning to run low.

Highland Park and uptown Dallas, if you don’t know the area, is chock full of multi-million dollar homes, along with a dense array of high-end condos, lofts, and townhomes.  You will find trust-fund hipsters and yuppies galore, which you think would be the perfect breeding ground for Apple and their product line, thus creating high demand and leading to a lack of phones. So how could they still have stock left? (more…)

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A Derivative of Apple’s (NASDAQ:AAPL) Success?

Tuesday, June 22nd, 2010

So after the market closed yesterday, I took a ride down the street to my dentist’s office for my every-six-months hour of fun and excitement with the hygienist.  On my way home, I decided to take a different route that took me right past the Highland Park Apple Store, about a block away from my home.  I had heard a rumor about a guy who had been camping out since last Friday for the new iPhone 4 and I had to check this out.  Sure enough, with tent, Bunsen burner, lawn chairs, and an endless supply of water (it’s 103 degrees today, with not a cloud in sight), I saw him.

The guy I saw (who prefers to remain anonymous) is a local celebrity and maybe a bit crazy for waiting in the 100+ degree endless summer solstice sun.   According to him, he has been the first in line for the all of the iPhone releases at this store.

He was greeted with some honking by passing Dallas-ites during the three minutes I was there, but many just think he is crazy, according to local blogs and articles.   I would call him determined and passionate to say the least. I mean, you can’t get a iPhone 4 right now, so maybe he’s not so nuts. They did pre-sell 600,000 in one day.

But this story isn’t about this Apple fan or his compatriots braving ridiculous weather conditions alone to get the iPhone 4, it’s about the slew of 3Gs and 3GSs that will be hitting the secondary market, namely by way of places like eBay, craigslist and Gazelle.com, who has received a record number of iPhone trades.   By my estimates, there are more than 49 million 3Gs and 3GSs in the hands of folks around the world.  When Apple rolled out the 3GS, a large amount of legacy owners upgraded their phones, and that change was largely to do with speed rather than the phone itself. (more…)

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Trading Strategies on Netflix (NASDAQ:NFLX) as it Continues to Outperform

Wednesday, June 9th, 2010

Netflix envelopesEarly Tuesday, brokerage firm Caris lifted its 12-month price target on Netflix (NASDAQ:NFLX) to $130 from $120 (roughly a 20% advance from current levels). Monday, at Apple’s (NASDAQ:AAPL) much-anticipated Worldwide Developer Conference, NFLX officially announced what has been speculated for months – a free app that will allow streaming video across various Apple devices for NFLX customers.  Caris points out that the 20 million iPhone users in the U.S. may help grow the Netflix customer base.

NFLX shares have been in uptrending mode since the last quarter of 2008, more than quintupling in value over the last 18 months or so. While the broader market has given back more than 11% since late April, NFLX has continued to chug higher, up more than 5% during the past six weeks.  The stock’s uptrend has slowed down, but the overall outperformance continues.

Investors who think the “trend is their friend” and who want to follow Caris’ bullish thesis might wish to take advantage of the leverage that option strategies can prove.  Those who feel the uptrend is petering out and who wish to take a contrarian approach may also want to explore an option strategy.  Two hypothetical option strategies on NFLX – one bullish, one bearish – are described below.  Remember these serve as examples, not recommendations.  Consider your own risk/reward parameters and personal trading goals before executing any new trades.

Want to learn more about different options strategies or the OptionsHouse platform?  Stop by our events page to review our schedule of free weekly webinars and sign up for one that interests you. Next week’s Tuesday strategy webinar is a look at the short-call strategy. (more…)

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Is the Apple iPhone 4G on the Way?

Monday, June 7th, 2010

Steve Jobs, AppleExpectations are always high for new Apple (NASDAQ: AAPL) products and with Steve Jobs being the showman and master of spin that he is, he can generally deliver.  Blogs are lit up with anticipation ahead of today’s Worldwide Developers Conference and Jobs’ keynote speech is expected to contain news of a new product (Note: I am writing this at 7:30 am CT).

There have been many sites that have leaked photos and specifics of the closely-guarded product.  Of course there was the notorious beer-garden incident in California, which offered a “free look” into the phone, thanks to Gray Powell, an engineer from Apple who left the phone at Gourmet Haus Staudt (which I hear has a great selection of German beers, by the way).  That fourth-generation phone ended up in the hands of the website Gizmodo for the sum of $5,000 but was later returned to Apple.

According to Gizmodo, the new iPhone is thinner than the 3GS and previous iPhones, containing smaller internal components and a 16% larger battery inside the new metal frame; this could mean that poor battery life will be improved. There is now a front-facing camera, which should help with many apps and with video chat, and there is also a larger and better-quality camera with an LED flash on the back, a higher-resolution display, and a second microphone for noise cancellation.

There is also reportedly a new back cover, which is speculated to be glass or ceramic, possibly to address the scratching issues that iPhone owners face every time they sit their naked iPhone on just about any surface other than one coated with cosmoline. It is also reported that there will also now be a MicroSIM slot in the phone, which is the same device used in the iPad. (more…)

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