3 Stocks Poised to Move on Tuesday

Shares of Apple Tarnished Ahead of Tuesday Event: Apple (APPL) lost about 1.5% in Monday trading after being down by as much as 5% and up by 2.5% during the day ahead of a presentation on Tuesday which is expected to the announcement of a new iPod Nano in addition to details on iPhone sales. As illustrated in the accompanying three month chart, shares of Apple have fared worse than the Nasdaq Composite Index, but have fared better than smart phone competitor Research In Motion (RIMM) and tech bellwether Google (GOOG), which are both down over 20% over the past three months. Of the three tech titans, shares of Google may be the best value, trading at a forward PE below 20X and PEG under 0.8X as the stock trades very close to its 52-week low.

Lehman Nears Sale of Neuberger Berman: CNBC is reporting that Lehman Brothers (LEH) is close to selling its investment management division, including its most prized asset in Neuberger Berman in an effort to raise capital to stem billions of losses. Lehman values Neuberger at $10 billion, which is about equal to the market cap of the entire company as of the close on Monday, but potential buyers are looking for a better price.

Airlines and UAL Look to Regain Altitude: Shares of UAL (UAUA) and other airlines may get a relief rally on Tuesday, following a false bankruptcy rumor on Monday for the parent company of United Airlines which grounded its shares along with many others in the industry. Airlines could also get a boost if oil (USO) continues to decline on concerns of a global economic slowdown and a strengthening US Dollar (UUP).

Comments

[Andy Zaky:]

Seriously. Why do you writers continue to compare GOOG, RIMM and AAPL by looking to their P/Es? Can you answer that question? Have you heard of P/FCF at all? Do you realize that Apple defers revenue it receives from iPhone sales an recognizes the revenue ratably over a 24-month period? What if Apple deferred all of its revenue? Would you still use Apple's P/E to compare it to other companies? Think about it. If Apple only recorded $1 billion in revenue because it decided to defer all of its revenue, but produced $4 billion in free cash flow (4x the revenue) would you still be inclined to look at Apple's P/E as if it meant anything? Obviously not. So why do you do so when Apple defers a large portion of its revenue each quarter? It's because you know nothing about stocks, fundamentals and finance and probably shouldn't be writing anything ever.

2008 Sep 09 03:44 AM

[Andy Zaky:]

Seriously. Why do you writers continue to compare GOOG, RIMM and AAPL by looking to their P/Es? Can you answer that question? Have you heard of P/FCF at all? Do you realize that Apple defers revenue it receives from iPhone sales an recognizes the revenue ratably over a 24-month period? What if Apple deferred all of its revenue? Would you still use Apple's P/E to compare it to other companies? Think about it. If Apple only recorded $1 billion in revenue because it decided to defer all of its revenue, but produced $4 billion in free cash flow (4x the revenue) would you still be inclined to look at Apple's P/E as if it meant anything? Obviously not. So why do you do so when Apple defers a large portion of its revenue each quarter? It's because you know nothing about stocks, fundamentals and finance and probably shouldn't be writing anything ever.

2008 Sep 09 03:44 AM

[winindthedust:]

This pull back is a great opportunity to buy before the springboard, that WILL happen. Apple just has too much momentum to be held back by rumor induced stock manipulation.

P.S. - Why is everything Apple is putting out, selling like hot cakes? And even in this recessionary climate? Hmmm... the real numbers don't lie. Apple is a solid company, producing great products, that will continue to outperform, come what may in the future.

P.P.S.- don't forget that iPhone revenue is deferred. If the company books look good now, they are actually much, much better then a casual look reveals, because of this deferred revenue. This company is WAY undervalued by the street.

While Dell sells off factories, and Microsoft continues to burn cash, Apple is actually producing a very solid profit through innovation that will carry it for the next ten years, even if they did NOTHING... and we all know that isn't going to happen.

My advise- all of you investors playing russian roulette with the casino- settle down, there is much, much more money to be made with Apple buying paper and going long.

2008 Sep 09 11:41 AM

[KenC:]

Good hypothetical to illustrate your point, Andy.

2008 Sep 09 03:26 PM

[Fish Gone Bad:]

I went shopping for an IBD last weekend at Victoria Gardens in Southern California. The mall was fairly empty. I walked past the Apple store and it was packed. There is a recession on, and stores are going out of business. Yet the Apple store was packed. Next time you are out shopping, take a look at an Apple store.

Clark Jenkins
FishGoneBad.com

2008 Sep 09 10:29 PM