Best Mobile Communication Device Stock Buy Now, As Seen By Market-Maker Hedging

by: Peter F. Way, CFA

In this corner of the ring is the opinion heavyweight, by product price testimony, Apple, Inc. (NASDAQ:AAPL). In the opposite corner is the low-price, low-(no?)-profit could-be contender, Inc. (NASDAQ:AMZN).

In another corner (What is this, a tag-team match? No, just another "street" brawl.) is that super-aggressive, strongly diversified, and imaginative competitor, Google, Inc. (NASDAQ:GOOG). In the fourth corner is that past champion, attempting a comeback in a newer related field, by using established resources and experienced handlers, Microsoft Corporation (NASDAQ:MSFT).

The fight will be judged by Street Referees Associated, a collective mob of essential locals intent on getting their vig from all parts of the betting handle. As they do every day, each round will be awarded by their collective capital-liquidity votes, strongly influenced by the communications of their most important clients.

Whaddya ya mean, it's not a fair fight? Ya wanna know fair? Thirty days hath September, April, June and November, all the rest have thirty-one except February, and it has twenny-eight. Now is that fair? You gonna try and do sumpin' about it?

So siddown and see what the initial weigh-ins imply:

(Click to enlarge)

(used with permission)

They all are in good-looking shape, with lots more upside than drawdown weaknesses. Yeah, AAPL [1] seems to be a bit ahead of the rest, perhaps more popular with the crowd, especially those that can afford 'em.

GOOG [3] is more conservative in appearance, but every bit as strong against adversity as AAPL. AMZN [2] shows a bit more downside uncertainty, and perhaps not as much as the critics think it deserves. But this ain't no beauty contest, we should be here to make money. Or is that AMZN's problem?

O'course MSFT [4] shows that lots of the crowd thinks he's past his prime, but this up-vs.-down weigh-in confirms he's a contender with plenty of experience, and still in the fight.

The dimensions above reflect what the judges all think is possible in the brawl ahead, while it is scored over the next 63-day rounds. No guarantees, just reflections on what could happen. Their training programs over the past 6 months may tell us something of what we might expect, in case ya believe in trends and "momentum". Here's AAPL's recent workouts:

(Click to enlarge)

(again, with permission, all such)

Wow! He looks rarin' to go! With a +25% gain from his low in June to now, and only one brief downside test, now behind him, AAPL will be tough to KO, or perhaps even to hurt much. Let's see what GOOG has to offer.

(Click to enlarge)

GOOG looks like he's just been keeping in shape, waiting for the right time to make his move. A strong contender like this can spring a powerful surprise; be prepared, 'cause even with that big price there's plenty of upside there. Now let's look at old MSFT.

(Click to enlarge)

He took a lump in early July, but has been working back from it since and has regained +10% by doing a lot of TV advertising. There's upside to be had, but as the weigh-in showed, a fair amount of knockdown possibility. Like what happened this past summer.

Finally, let's check out the bad-boy's activities since March:

(Click to enlarge)

Amazin' AMZN just keeps on staggering up in price, weaving back and forth from weakness to strength, but on an upward path that few thought could be sustained, and one that even fewer thought was deserved. But maybe that's his strength secret?

Now these judges have been keeping their forecast scorecards every day for years. That gives us a chance to see how well what they have been thinking has actually worked out. Let's see how much they really know about what's likely to happen in the days ahead.

The trick here is that the forecast balances between upside and downside change a lot. For sure the actual results ought to be quite different when there's seen a big upside than when the potentials look like they're getting skinny. So if ya wanna bet on one fighter or another, ya maybe wanna pick yer moments carefully.

Just because today's outlook doesn't make yer boy the top dog of the moment, don't mean he has no potential. Maybe this just isn't his day. Knowin' when to wade in or hold back for an opening can be real important in when to schedule the fight. Let's see how the judges compare, given the possible current condition of the contenders.

Their past scorecards, on just the fights each contender has had at this stage of his condition are below. All of them have been in the ring every one of the 1261 days of the last 5 years, but each of them have had today's condition a varying number of days out of that total. The two that look the most alike now are AMZN and GOOG, each with over 200 days of being in the shape they're in now.

Look what happened when they went the next 63 rounds (days) after that initial bell. GOOG won 64 out of each 100, but AMZN took 91 of the 100s to a win. And the AMZN wins were much more decisive, at a 10+% payoff, more than double the size of GOOG's. Moreover AMZN did his in only 42 rounds, compared to 49 for GOOG. That makes a difference at the CAGR box office.

(Click to enlarge)

Now poor old Mister Softy got whupped in 63% of his bouts when in this condition, taking wins in only 37 of 100. This is definitely not his day, but there may be a better time in the future, when he's better prepped.

The hard one to figure is AAPL. His conditioning for an ordinary tussle is great, but the record has been clouded by that long decline from 700. It set him up at times looking like a winner, but he couldn't come through on it, time and again, losing more than half his 106 fights.

But the boy is a momentum fighter, and to make it clear, it takes evidence that the tide has turned. When that happens, his price rises more than those around him tend to believe, making his Range Index rise up into the mid-30s to 40 or more. Then others see him moving and start to get in his corner and the trend builds. But it's not clear that we're there yet.

So, the judges have handed in their scorecards and most seem to favor "the amazin' one" at this point in time. But don't count any of the others out yet. They each may yet get in better shape and turn in surprising wins in times ahead.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The author has an investment interest in the website which, while not yet open to the public, is in conversion from being a delivery medium of information to institutional investors to a new life of providing similar help to do-it-yourself investors. Both brief and extended-time subscriptions for single or multiple issue inquiries should be at quite reasonable and manageable costs for individuals. Announcement of its opening is hoped for in the 4th quarter of this year.

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