Apple stock
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Apple Inc.'s (Nasdaq: AAPL) "Store Within a Store" Strategy Bold But Risky
Hoping to expand its reach, Apple Inc. (Nasdaq: AAPL) is testing a store-within-a-store concept with both Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT).
Although both retailers have already been selling Apple merchandise, the new "micro-stores" will expand the current offerings (with the exception of Mac computers) and create a product experience more akin to an Apple Store.
Several dozen more micro-stores are planned, though the rollout will be gradual.
Piper Jaffray analyst Gene Munster said Apple's long-term goal isn't so much to stuff a micro-store into every Wal-Mart and Target, but to place them strategically in rural areas many miles from the mostly urban, wildly successful mall-based Apple Stores.
"We always talk about growth outside the U.S.," Munster said on CNBC recently. "The reality is, just look in our backyard. There's still a growth opportunity that no one's talking about, which is kind of outside the urban areas."
The allure for Wal-Mart and Target is the extraordinary foot traffic Apple products can generate. They're hoping that customers who come to shop for Apple products will stick around to buy other merchandise.
If the strategy works, both Apple and the big retailers win. But, as the saying goes, the devil is in the details.
In fact, Apple is no stranger to what can go wrong with the store-within-a-store concept.
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Apple Inc. (NASDAQ: AAPL) Q2 Earnings: iPhone Carries the Day
Thanks to booming sales of the iPhone, Apple Inc. (NASDAQ: AAPL) Q2 earnings far outpaced Wall Street expectations.
Apple earned $12.30 a share on revenue of $39.2 billion, compared to analyst expectations of $9.99 a share on $36.6 billion. In the year-ago quarter Apple earned $6.40 a share on revenue of $26.67 billion.
Apple sold 35.1 million iPhones in the quarter, well beyond the 30.5 million analysts had projected.
AAPL stock had fallen in recent days when U.S. carriers AT&T Inc. (NYSE: T) and Verizon Communications (NYSE: VZ) both reported significant declines in their quarterly iPhone sales. The reports raised concerns, unfounded as it turned out, that iPhone sales would miss.
That's one reason why the news was greeted enthusiastically in after-hours trading. AAPL was up $41, or 7.29%, within 30 minutes of the earnings announcement.
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Don't Be Surprised by Apple Inc.'s (Nasdaq: AAPL) Q2 Earnings
Following its extraordinary beat last quarter, expectations for Apple Inc.'s (NASDAQ: AAPL) earnings are even higher than usual.
With Apple having such an outsized influence on the markets, even investors who don't hold the stock will be watching for Apple's Q2 earnings report after the closing bell today (Tuesday).
Still, with its stock having tumbled 11% in the past two weeks, from its peak of $640 April 10, Apple needs to beat Wall Street expectations.
If Apple earnings disappoint -- as occurred in the September quarter last year -- the stock will get beaten down even further. Such negative news would push the stock toward $500.
The consensus estimates for Apple's Q2 earnings are $9.99 per share on revenue of $36.6 billion, which most analysts believe is achievable.
In fact, just in the past week several analysts, such as Shaw Wu of Sterne Agee and Bill Shope of Goldman Sachs, again raised their estimates for iPhone and iPad sales.
However, Money Morning Chief Investing Strategist Keith Fitz-Gerald isn't so sure.
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He Predicted the Apple (Nasdaq: AAPL) Sell-Off … Here’s What's Next
The recent sell-off we've seen in Apple Inc. (Nasdaq: AAPL) shares came as a real stunner to Wall Street.
But Strike Force Editor Keith Fitz-Gerald saw the sell-off coming.
In fact, he predicted it.
Back on March 27, Keith wrote a lead story for Money Morning in which he articulated seven very clear reasons that investors should consider shorting Apple's stock.
And that was a couple of weeks after he detailed a "put" option strategy - in essence, a "short" trade - that resulted in a 47% profit (in just two days, no less) for the subscribers of his Strike Force trading service who followed his recommendation (a short-term reversal delivered those gains).
I wanted to know what tipped him off that a reversal was coming - as well as what he was predicting for Apple's shares going forward.
"BP, it was clear to me that this kind of reversal was coming - and sooner rather than later," Keith said during a private briefing late last week. "The shares had soared 75% in just five months - one analyst actually described the performance as "euphoric.' Suddenly, we're seeing all these mainstream-news-media stories explaining why Apple shares are going straight to $1,000. But I know from my own experience as a professional trader that even the shares of the best companies on earth don't go straight up. I happened to time it perfectly and help Strike Force subscribers take advantage of the reversal I just knew was in the offing."
Key Questions for Apple Stock
The way we see it, the Apple stock sell-off raises these three key questions for investors:
- No. 1: What's going to happen to Apple shares in the near-term?
- No. 2: If the stock is headed for a volatile stretch, is there any way to profit until the smoke clears?
- No. 3: What's the long-term outlook for Apple - both the company and the stock?
Here's what Keith had to say.
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Will Apple Inc. (NASDAQ: AAPL) Keep Driving Technology ETFs Higher?
Despite the recent selloff, shares of Apple Inc. (NASDAQ: AAPL) have skyrocketed 48% in the first quarter, dwarfing the 12% gain posted by the S&P 500.
Apple's astonishing rise has also helped to underpin the Nasdaq Composite, which gained nearly 19% in the first quarter -- its strongest showing since 1991.
But that's not the only place to experience the "Apple Effect."
Many investors who own technology ETFs -- which hold almost 4% of all Apple shares outstanding -- were rewarded with even better returns.
For instance, theVanguard Information Technology ETF (NYSE: VGT) was up 20.85% in the first quarter.
Even better, the iShares Dow Jones U.S. Technology Index Fund (NYSE: IYW), was up 21.77%, thanks in part to Apple.
Now the question is: Can Apple's momentum continue to drive technology ETFs higher?
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The Antitrust Curse: What Apple (NASDAQ: AAPL) Can Learn From Microsoft, IBM
On the surface, it would appear that Apple Inc. (NASDAQ: AAPL) has little to fear from the antitrust lawsuit filed by the U.S. Department of Justice last week.
The DOJ accused Apple of colluding with several major publishers to fix the prices of electronic books in its iBookstore.
The evidence was strong enough that three of the five book publishers settled before the DOJ filed the suit. Two, Macmillan and the Pearson PLC (NYSE ADR: PSO) Penguin Group, decided to fight the charges along with Apple.
The antitrust case itself poses little threat to Apple. With $100 billion in the bank, it can afford to fight government lawyers until doomsday.
Even losing the case wouldn't make much of a dent in Apple's pocketbook. The three publishers that settled paid a combined $51 million, hardly a concern to a company that earns an average of $120 million every day in profits.
Likewise, a remedy that forces Apple to lower prices for e-books in its iBookstore would have almost no impact on earnings. Nearly all of Apple's profits come from sales of high-margin hardware like the iPhone and iPad. Profits from all iTunes Store segments, which include the far more voluminous sales of apps and music, account for less than 4% of Apple's profits.
And yet this antitrust suit poses the biggest threat Apple has faced in years, as former tech kings Microsoft Corp. (NASDAQ: MSFT) and International Business Machines Corp. (NYSE: IBM) can attest.
"This echoes back to the peak in Microsoft," Sean Udall, author of Minyanville's TechStrat Report, said in a Yahoo! Finance interview. "Microsoft had a monopoly and was doing great and was the star tech stock of yesteryear. And you can almost draw the peak of their stock when they had major DOJ issues."
The problem with being in the DOJ's gunsight is that it distracts management, makes the company hesitant to innovate, and blemishes the company's public image.
While antitrust woes may not have been entirely responsible for Microsoft and IBM ceding their dominant positions in tech, they were clearly a major factor.
And worse for Apple, the e-book case could be just the beginning.
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Is Apple Stock (Nasdaq: AAPL) the Short of a Lifetime or the New Widow Maker?
I have a confession to make.
I believe Apple stock (Nasdaq: AAPL) is going to be world's first trillion-dollar company yet I want to short the snot out of it.
Am I being compulsive?...impulsive?....or foolish?
Perhaps it is all three considering that Apple has risen more than 3,000% in the last ten years, turning almost any attempt to go against the grain into a "widow maker" trade.
I say almost because I am one of the lucky ones.
A few weeks ago I recommended my Strike Force subscribers purchase put options on Apple, effectively shorting the stock. That resulted in a 47% profit in less than 24 hours for anyone who followed along, excluding fees and commissions.
I'm not alone in my thinking.
Uber investor Doug Kass, general partner of Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP, tweeted recently that he had covered "half his short" on Apple following the announcement of their dividend and buyback plan.
Given that the stock had run up to nearly $608 a share before the announcement, presumably Kass had banked some gains, too.
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How to Earn a 9.25% Gain in 30 days While Waiting for Apple's
(Nasdaq: AAPL) DividendAlthough it's been one of the market's darlings for a decade now, dividend-oriented investors have long shunned computer giant Apple Inc. (Nasdaq: AAPL) because, well ... it didn't pay one.
That, coupled with AAPL's historically high share price, has always kept me from buying Apple stock - but, as a trader, it hasn't kept me from generating income with Apple options.
Last week, the cash-rich company finally took a step toward rewarding loyal shareholders by declaring a dividend - a quarterly payout of $2.65 a share, beginning with the fiscal fourth quarter, which runs from July 1 to Sept. 30, 2012.
Assuming the payouts continue, which they almost certainly will, that means Apple's annual dividend in fiscal 2013 will be $10.60 a share, which sounds fairly rich - except for one thing...
At its closing price of $599.34 last Thursday, Apple remains one of the market's highest-priced stocks, meaning the new annual dividend of $10.60 will equate to a yield of only 1.76%.
That's decent, but it's hardly near the top of the income-stock ranks. Plus, it'll be well over a year before you can collect the full dividend.
Fortunately, by using options, you can easily generate some significant income while waiting for Apple's new dividend to kick in - and multiply your yield at the same time.
Let me explain...
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New Apple Dividend Will Help Push Shares Higher (Nasdaq: AAPL)
A new Apple Inc. (Nasdaq: AAPL) dividend will make the stock even more attractive while expanding the pool of potential investors.
Apple announced Monday that starting in September, it will pay a $2.65 quarterly dividend.
Apple also announced a $10 billion stock buyback program to be conducted over three years, beginning in September.
The stock buyback was a bigger surprise to analysts. While too small to move the stock significantly, Apple CEO Tim Cook said the intent is to avoid earnings-per-share dilution from future shares issued to reward employees.
The Cupertino, CA company's enormous pile of cash and investments - over $97 billion as of the end of 2011 - had led to increasingly strident calls for an Apple dividend in recent years.
Yet despite today's investor-friendly moves, some think Apple could have done more.
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