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Sharpen Your Pencil – And Put These Three Stocks on Your "Shopping List"

Ask any of our gurus for advice on how to survive a stock-market sell-off – or even a whipsaw period like the one we’re navigating now – and you’ll get a surprising answer.

Keep a shopping list ready, they’ll tell you…

  • AAPL

  • Tech Stocks to Watch: Cisco (CSCO), Apple (AAPL), Demandware (DWRE) Tech stocks continued their all-star year yesterday (Thursday) with a Cisco Systems Inc. (Nasdaq: CSCO) deal, a new intraday high for Apple Inc. (Nasdaq: AAPL), and an explosive first-day performance for Demandware Inc. (NYSE: DWRE) moving markets.

    The tech-heavy Nasdaq closed up 0.51% to 3,056.37.

    Here's why these are the tech stocks to watch today (Friday):

    Cisco Systems (CSCO) makes play for video: Cisco Systems Inc. (Nasdaq: CSCO) announced a $4 billion deal with video-software specialist NDS Group Ltd, a small company based outside London.

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  • Tech Stocks Soar on "Off the Charts" Demand for Apple Inc.'s (Nasdaq: AAPL) Products If you're invested in technology stocks, you've had a great ride lately.

    With demand for Apple Inc.'s (Nasdaq: AAPL) products soaring, tech stocks will continue to do well.

    Tech stocks have posted a whopping 16% return in 2012, the top performing sector in the Standard & Poor's 500 index. By comparison, the broader market has notched just a 9% gain year-to-date (YTD).

    "Large-cap technology stocks have exceeded our expectations with better revenues, earnings, margins and cash flows," Michael Sansoterra, a sub-adviser for the Ridgeworth Large Cap Growth Fund, told The Wall Street Journal. "You just can't find that elsewhere in the large-cap growth space."

    Tech Stocks Offer Bargains

    Even as they march higher, prices for tech stocks are a relative bargain.

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  • How Apple Inc. (Nasdaq: AAPL) Became the Vampire Squid of Tech Business partnerships with Apple Inc. (Nasdaq: AAPL) produce abundant profits - but usually only for Apple.

    Using its clout as a vendor of highly desirable consumer technology, Apple secures extremely favorable deals with suppliers, providers of goods and services, and retailers.

    Such deals are a major reason behind Apple's extraordinary profits.

    "Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?" Craig Moffett, an analyst at Sanford Bernstein & Co. told the Los Angeles Times.

    Despite increases in business volume, many companies that deal with the Cupertino, CA-company discover it's usually a one-sided relationship when it comes to profits.

    Apple has, in effect, become the technology world's "vampire squid" -- a term coined by Rolling Stone Matt Taibbi in 2009 to describe Wall Street behemoth Goldman Sachs (NYSE: GS).

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  • How Apple Investors Can Profit from the New iPad Apple Inc. (Nasdaq: AAPL) shoveled more coal into its money-making locomotive today (Wednesday) with the official launch of the New iPad.

    If the third version of Apple's trend-setting tablet is as big a success as most expect, then owning the company's stock isn't the only way that Apple investors can profit. Many of Apple's suppliers will also reap reward from the New iPad.

    The New iPad's marquee features, such as support for 4G LTE networks and the ultra-high resolution Retina display, should help Apple maintain its dominance in the tablet market at least through the end of the year. And if rumors of a 7-inch iPad Mini eventually pan out, Apple will have a cheaper tablet option to appeal to consumers now buying's (Nasdaq: AMZN) $199 Kindle Fire.

    A Forrester Research report published yesterday (Tuesday) put the iPad's share of the tablet market at 73%, with no other rival having more than 5%.

    Analyst estimates for 2012 iPad sales range from 55 million to 60 million. Apple has sold 55 million iPads since the product's debut in April 2010, winning over not just consumers but multiple markets.

    "It's astonishing how fast the product has spread through business, education and health care," Needham & Co. analyst Charles Wolf told USA Today.

    Sales of the iPad, along with the iPhone, have pleased Apple investors by pushing stock past $500 a share this year.

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  • A New Way to Play Apple Stock Money Morning's Chief Investment Strategist Keith Fitz-Gerald joined Fox Business' "Varney & Co." to talk about the usual market pattern that follows Apple Inc.'s (Nasdaq: AAPL) product release. With the tech giant expected to release the latest iPad today, watch this clip to hear how Fitz-Gerald would play Apple...

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  • If I'm an Apple (Nasdaq: AAPL) Investor, I Want a Dividend Now that their stock is up more than 20-fold in the last ten years, Apple Inc. (Nasdaq: AAPL) investors have had a wonderful ride.

    On top of that the company has amassed a $97.5 billion cash hoard that would be the envy of any small nation.

    However, as a dispassionate observer with experience of past such glorious valuations, I will tell you: If I were an Apple shareholder I'd want a cash dividend.

    In fact, I think investors should certainly demand payout of at least three quarters of that cash hoard.

    Simply put, a dividend is the best way for Apple shareholders to get real value out of their investment.

    Here's why.

    If Apple decided to pay out a $25 billion dividend per annum, allowing shareholders to benefit directly from the company's profits, it would be less likely to diversify unwisely in the future.

    By receiving such a dividend, Apple shareholders would find their capital value preserved and their income increased.

    However, the temptation of the $97.5 billion cash hoard would remain and management would still dream of the $100 billion acquisition that could revolutionize Apple's prospects.

    That's why besides an annual dividend of $15-$20 billion (giving a 3.75%-5% yield on a $400 billion capitalization), shareholders should demand that the cash hoard itself, or the great bulk of it, be paid out to them, by a special dividend of maybe $100 per share.

    By doing that, the diversification risk would be removed, and Apple would retain only enough earnings to guard against the onset of recession.

    The Larger Case for an Apple Dividend

    But that's not the only reason why Apple should do the right thing and start paying a dividend.

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  • The Three Innovations That Will Make Apple Inc. (Nasdaq: AAPL) the First $1 Trillion Company Apple Inc. (Nasdaq: AAPL) has the potential to be the first company ever to reach $1 trillion in market capitalization.

    And I believe it will in a relatively short order - but it won't be easy.

    Apple took the most valuable company crown from Exxon Mobil Corp. (NYSE: XOM) in January after stunning December quarter results sent the stock soaring. Yesterday (Wednesday), AAPL's market cap crossed $500 billion.

    As Apple's valuation has climbed, fueled by a five-year average annual growth rate of 59%, more people have started throwing the t-word around - as in trillion.

    "Apple's a no-brainer to me to hit a $1 trillion-dollar market cap within the next year," James Altucher, managing director of Formula Capital, said on CNBC's "Fast Money" recently.

    The record for market cap is just over $650 billion, achieved briefly by Microsoft Corp. (Nasdaq: MSFT) at the peak of the dotcom bubble in early 2000.

    Only a handful of companies have made it to the $500 billion club, and membership has been fleeting.

    The list includes Cisco Systems Inc. (Nasdaq: CSCO), Intel Corp. (Nasdaq: INTC) and General Electric Co. (NYSE: GE) - all during the 1999-2000 market peak. The last company to breach the $500 billion mark was Exxon Mobil in 1997.

    One factor in Apple's favor is that it has risen to its current lofty levels not riding a bubble but despite a recession. And the markets for its existing products, such as the iPhone, the iPad and the Mac, still have room to grow.

    "The reason Apple has been able to continue growing at a spectacular rate, even as its revenue base has surpassed $100 billion, is because it targets the world's biggest markets," Robert Cihra, an analyst at Evercore Partners, told The New York Times. "The simple fact is that they still have a small share of huge markets - single-digit shares in both PCs and mobile phones."

    Naturally, getting to $1,000 a share and a $1 trillion market cap will require the addition of new sources of revenue, as well as sustaining growth in existing markets.

    However, Apple already has head start with at least three cutting edge innovations...

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  • What Apple is Signaling about a Market Top

    by Guest Author by Albertarocks

    Global Economic Intersection Article of the Week

    When a general stops leading his army mass surrender usually soon follows.  Very often when an index begins to lose leadership from its general the entire complex soon finds itself in big trouble. If there was ever an index that had a singular more important hard-core heavyweight leader than the Nasdaq 100 has in AAPL, I’d like to know what index that was.  AAPL now makes up a full 17% of the market capitalization of the entire $NDX.  So obviously when an enormous corporation like AAPL starts to take a bit of a bruising, it behooves us to take a real close look at what’s going on.  (Click on picture for larger image of apple face.)

    Follow up:

    The enormity of the effect that AAPL has on the entire $NDX can’t be overstated. Only last April its weighting had been reduced from 22% to 12%. Today, only 10 months later, that weighting has made another astonishing burst back up to 17%. The only other heavy hitters in any index that I’m aware of which even comes close to having the weighting that AAPL has, are Simons Property Group which makes up approximately 10% of IYR (real estate ETF) and IBM which makes up about 12% of the DOW. With a market cap. of $446 billion, AAPL is now slightly greater than twice the size of IBM. The bank account? With $98 billion cash on hand, AAPL now sports a cushion 6 times that of IBM. If AAPL really wanted to buy something nice they could certainly afford it. May I suggest Greece?
    Before we dive in, just a few notes for clarification. I don't mean to insult anyone here, but it has come to my attention that there are some people whose eyes glaze over when dealing with a chart that is made up from a ratio. There's nothing to it really. In fact, all currency crosses are the same thing... just a ratio:

    a) When viewing ‘any’ ratio chart, think of it as a ‘leadership gauge’. In all cases, what we’re really doing is dividing the component on the left side of the ratio (the ‘numerator’), by the component on the right side. In this particular instance, AAPL is the 'numerator' and is 'the component being judged' for leadership and not the Nasdaq. But of course the ultimate goal of any division operation is to generate the "quotient". It answers the question "How many AAPLs can we buy with one unit of NDX?" We then put that quotient on the chart in the form of the ratio itself... the candlesticks. What we're really after is to reveal what the ratio is doing and what it means for the broader index itself. The purpose of this study is not to discern when to buy or sell AAPL, but the NAS.

    b) In order to improve the ‘viewability’ of a ratio-style chart, I’ve changed the way I display them from the method I used to employ, in order to make them far less "busy".. Rather than to overlay the two individual comparators behind the ratio itself, I’ve placed them in the upper section of the chart in separate panels so that they appear as individual line charts. But the all-important ratio, the subject of our focus, is still shown in the heart of the chart as candlesticks. In every ratio chart, any indicators that are displayed pertain to the ratio itself and not to either of its components.

    Again, I apologize to those who already understand how ratios charts work, but out of respect for our friends who have been a bit reluctant to admit they didn't know, I just wanted to offer that bit of clarification. We start by taking a look below at the weekly chart of the ratio between Apple and $NDX:

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  • Apple's (Nasdaq: AAPL) Meteoric Rise is Distorting Everything It happened almost a year ago, and it's happening again.

    The meteoric rise in Apple Inc.'s (Nasdaq: AAPL) stock price is distorting the major benchmark indexes, including the Nasdaq-100, the Nasdaq Composite, and the S&P 500.

    That is still true even though the Nasdaq executed a "special rebalancing" of its Nasdaq-100 tech-heavy index to reduce Apple's 20% weighting down to 12% last April.

    With Apple's impact on the Nasdaq 100 now approaching 17% (that's greater than Google Inc. (Nasdaq: GOOG), Inc. (Nasdaq: AMZN) and Intel Corp. (Nasdaq: INTC)...combined), it's only a matter of time before another rebalancing takes a bite out of Apple's influence on this important index.

    The problem isn't that Apple's share price has been so strong.

    It's that investors may be unaware that the Nasdaq 100's rise and the Nasdaq Composite's jump to new 10-year highs wouldn't have been remotely possible without Apple's 60%+ gain since last summer.

    Instead, investors need to understand Apple's impact on these market barometers and pay more attention to the core movements in those markets, not just the shine of a single stock.

    Apple's Gigantic Impact

    Apple's outsized impact on the Nasdaq-100 (NDX), which is a 100-stock index of the largest domestic and international non-financial companies listed on the Nasdaq, impacts in equal measure the popular $32 billion PowerShares QQQ Trust (Nasdaq: QQQ). The QQQ is an ETF based entirely on the NDX.

    Apple's nearly 17% weighting in the NDX causes the NDX and the QQQ ETF to be closely correlated to Apple's stock whenever it makes a big move up or down.

    The NDX (and by extension the QQQ ETF) is also a sub-set of the Nasdaq Composite Index.

    The Nasdaq Composite Index (COMP) measures all of the domestic and international common stocks listed on The Nasdaq Stock Market. The COMP is one of the most widely followed and quoted major market indices.

    Apple's weighting in the Nasdaq Composite is 10.6%. Thanks in no small part to this heavy weighting, the COMP is now approaching 3,000 - a level it hasn't seen since November 17, 2000.

    But it's not just the tech-heavy NDX and COMP where Apple has an impact.

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  • Apple Inc. (Nasdaq:AAPL): When to Buy the World's Hottest Stock Shares of Apple Inc. (Nasdaq: AAPL) are taking a breather, leaving many investors wondering if they've made an iBoo-Boo.

    The hottest stock on the Nasdaq has fallen more than 4.6% as I write this since hitting a new intraday high of $526.29 on February 15, 2012.

    Does that mean it's time to sell?

    Perhaps, but first you should ask yourself why.

    If you're a long-term investor, there's a lot to look forward to. Apple is much more than a brand; it's a lifestyle. People tattoo the company's iconic brand on their rear ends for crying out loud.

    Always the innovator, Apple has barely scratched the surface with regard to new devices and has hardly tapped into ways to use them.

    People line up thousands-deep to buy newer versions of the company's most basic products every year -whether they need them or not.

    That is something no other tech company has figured out how to do.

    Plus Apple's market share is growing overseas, with a particular emphasis on the Asian Rim.

    In China alone, for instance, there's the potential for another 30-50 million iPhone sales in the next 12 months that could add another $4-6 in EPS to Apple's bottom line.

    I remain convinced that Apple could be the world's first trillion-dollar company and I'm not alone in my thinking. Since I first voiced that highly controversial opinion a few years ago, many other firms and analysts have joined me.

    How to Play the Short-Term Apple Top

    But in the short term, Apple's chart now looks like a classic blow-off top- and technically speaking it is.

    Last Wednesday, we saw the stock close near the lows of the day after making a quick run up and a high volume, hi-speed failure midday.

    The chart tells the story.

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  • Why $500 Apple Inc. (Nasdaq: AAPL) Stock is Conservative Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business' "Varney & Co." to discuss Apple Inc.'s (Nasdaq: AAPL) growth prospects - and tells just how big he thinks this tech behemoth will get.

  • How iTV and iPad 3 Will Push Apple Inc. (Nasdaq: AAPL) Over $600 Even with its share price at a lofty $470, Apple Inc. (Nasdaq: AAPL) still has startling upside potential, thanks to the iTV and iPad 3.

    These younger iSiblings will provide the fuel to sustain Apple's amazing growth rates, which until now have been almost single-handedly driven by the iPhone.

    The next version of Apple's tablet, the iPad 3, is expected to arrive in March.

    But the product that's been getting the most buzz is an Apple-branded TV - nicknamed by pundits as the iTV. While unconfirmed by the company, most analysts believe the iTV is in the pipeline and will debut before the end of the year.

    The added pop an iTV would deliver to Apple's bottom line, along with the iPad's continuing dominance of the rapidly growing tablet market, will make AAPL worth at least $600 over the next year or so.

    "If Apple were to sell a TV, we continue to believe its margins and pricing could be industry leading given its vertical integration with content," Barclays Capital (NYSE: BCS) analyst Ben Reitzes wrote in a note to clients.

    Toronto's Globe and Mail newspaper set off the latest wave of iTV speculation this week when it revealed that two of Canada's largest telecommunications companies, Rogers Communications (NYSE: RCI) and BCE, Inc. (NYSE: BCE) were in talks with Apple.

    The Globe and Mail report added that both companies already had an Apple iTV in their labs.

    Numerous rumors out of China in recent months have claimed that Apple's manufacturing partners are already gearing up for production of Apple iTVs.

    The only snags appear to be the availability of the display screens in sufficient quantity and deals with content providers, which Apple has been working on for well over a year. But Apple is very good at resolving such problems.

    Reitzes calculated an iTV could contribute $5.40 of earnings per share (EPS) to Apple's bottom line in its 2013 fiscal year. Reitzes puts Apple's total estimated EPS for 2013 at $48.46.

    When you multiply that by Apple's modest price to earnings (P/E) ratio of 13.26, you get a stock price of $642.58. And keep in mind that the historic average for Apple's P/E over the past five years is 22.6. That math puts AAPL over $1,000.

    Reitzes believes the Apple iTV will capture about 5% of the LCD-TV market, which is expected to sell 230 million units in 2012.

    The Magic of iTV

    Once in the market, the iTV will reshape the TV manufacturing industry, creating the same kind of headaches for competitors as the iPhone and iPad did.

    "It appears that mainstream TV manufacturers are likely to be at least six to 12 months behind in the best-case scenario," Jefferies & Co. analyst Peter Misek told the Los Angeles Times. "Many of them lack the software and cloud capabilities as well as the innovative cultural elements to effectively compete."

    So what will be so special about Apple's version of television?

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  • Buy, Sell or Hold: 100 Billion Reasons To Buy Apple Stock Apple Inc. (NASDAQ: AAPL) is one of the world's largest companies based on market capitalization.

    Cupertino, CA-based Apple just released one of the best earnings reports in the history of capitalism.

    In short, they crushed it-sending Apple stock to a fresh 52-week high.

    Take a look:

    In a record setting first quarter, Apple sold an astounding 73 million devices, including:

    • 5.2 million Macs.

    • 15.4 million iPods.

    • 37 million iPhones.

    • And 15.4 million iPads.
    Keep in mind that's just devices. Apple also takes a 30% cut of all the music, apps, movies and books sold in the online iTunes Store, and its retail operation is a gem within itself.

    All told, it's a remarkable growth story - and one that's far from over.

    But that is only part of why you should buy Apple stock. Its balance sheet boasts 100 billion more reasons showing the company is a solid "Buy."

    Ironically, Apple has so much cash its stock could actually be considered cheap.

    Apple reported $97.6 billion in cash, but given the rate the company was selling products in the fourth quarter, that figure is surely higher now.

    Today, Apple's cash-on-hand has to be around $100 billion. This mounting pile of cash has been the source of much speculation in recent years, and the issue was again raised by analysts last week during the earnings conference call.

    Judging from Chief Financial Officer Peter Oppenheimer's response, it was clear the company has plans for it.

    According to Oppenheimer:

    "We're examining all uses of our cash balance, what we might do in the supply chain, what we can do from an acquisition perspective and otherwise. Since I don't have any perspective to share with you today, specifically on dividends or buybacks, other than again, we are actively discussing the cash balance."
    It's my expectation Apple will...

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  • List of Apple Inc. (Nasdaq: AAPL) Suppliers In a fortuitous turn of events for investors, notoriously secretive Apple Inc. (Nasdaq: AAPL) has released a list of more than 150 of its suppliers.

    But for investors, the list of suppliers is a potential a treasure trove. Although many of the names on the list were known, some are new and represent possible ways to play Apple without paying the premium for Apple stock.

    Apple was compelled to release the list of suppliers to mollify critics who accused the Cupertino, CA,-based company of being complicit in questionable workplace practices in parts of its Asian supply chain.

    According to Apple, the list of suppliers represents "97% of Apple's procurement expenditures for materials, manufacturing, and assembly of Apple's products worldwide."

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  • Tech Stocks to Watch: Apple Inc. (Nasdaq: AAPL), Research in Motion (Nasdaq: RIMM), Guidewire Software Research in Motion Ltd. (Nasdaq: RIMM), Apple Inc. (Nasdaq: AAPL), and a software company's IPO round out the biggest headline-making tech stocks this week - but not all are "Buys."

    Major change for RIM: Research in Motion, the struggling Blackberry smartphone maker, has named a new Chief Executive Officer to replace co-CEOS Mike Lazaridis and Jim Balsillie - but could be too little, too late for RIM.

    The company announced Monday morning that RIM-insider Thorsten Heins would take over the reins effective immediately. Lazaridis will stay on as vice chairman of the board; Balsillie will stay as a director.

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