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Mike Stallings
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10+ years of documented success in the sales industry, currently a sales manager with a financial background having held, health, life, series 6 licenses.
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  • Apple Tanks: Are You Really Surprised?

    For the past year ago I have written articles on SA regarding Apple (NASDAQ:AAPL) and following the trends and playing the pullbacks in order to profit from the market swings. I also once made a prediction that Apple would pullback to $500 before ever seeing $600. I was wrong, and ate my crow for it.

    (click to enlarge)

    Today (Thursday) marked the biggest pullback both in dollar amount and % wise the stock has ever seen. Although it has seen some double digit pullbacks over time, never has the stock dropped at the rate we saw today based on non-world events: more than a 12% drop, even more after-hours, based on lighter I-Phone sales which ultimately led to lower earnings. The question now is, is this carnage over and is it time to buy?

    If you read my article over the summer, you would see I expected some type of slow to Apple's rocket launch toward $700, $800 and beyond. The talk of seeing Apple hit $1,000 before the end of 2012 was something (I hope) many of you did not believe would come to fruition. Can I honestly say I expected this type of decent? Of course not, the stock has pulled back nearly 25% since the summer, and over 35% off it's high of $705. There are both pros and cons to the stock that I will discuss below, but my take is it is a solid company that is feeling the panic of the holders whom thought this stock would reach the moon faster than a speeding bullet.

    One thing we have noticed especially recently is that the street punishes companies that miss their marks ever so slightly. Apple missed predictions on their I-Phone, I-Pads and the Macs (according to street predictions). Are you surprised? With the market share this company has, the only way their market share could have went was lower! The competition such as Samsung (OTC:SSNLF) has come out with new and improved phones and tablets to steal away some of Apple's thunder. But what was the correction today too much?

    I personally do not believe Apple to be a stock to hold in the $400-$500 range for long. There is too many good things happening for it to remain there. This is stock that after today is only trading at 6 times its earnings (huh?). And also let's not forget that in reality (as another SA author mentioned here) there were only 13 weeks in fiscal year QTR 1 2013 as compared to 14 weeks last year. In reality, they averaged higher weekly sales this year than last so perhaps the panic is a bit much. The company still maintains a solid market share, even if it is shrinking. They have tons of FCF, and are in the process (finally/hopefully) of bringing Apple TV to fruition with something added to it we haven't seen yet, instead of dodging the question.

    Overall there are pros and cons and as I have always said, you as an investor need to weigh them all and make a decision. It is your money after all and you should know the advantages and disadvantages ahead of time before you make a decision of how to invest it!

    Tags: AAPL
    Jan 25 8:48 AM | Link | Comment!
    I am not a blogger.  Period.  So please be gentle with your comments, this will be my first attempt to blog. 

    I feel the need to clear the air and express why I believe Longing SIRI is the way to go.  I felt this necessary after reading article after article BASHING this stock for the last 3-4 days.  Someone needs to be the voice of reason here!

    1) I am long on SIRI, with JAN 2012 calls at $2.00 and $2.50 and JAN 2013 calls at 2.50 and 3.00.  I want to make you all understand I have no agenda nor work for any company regarding stocks or anything financial.  I am a person, like many of you, that like the chances of this stock.  It does not mean if I see bad news I will sweep it under the carpet.  I am a realist and recognize there usually is good and bad with many of the companies we sink our hard earned dollars into.

    2) Now, Why am I longing this stock?  I have a few reasons, and I believe they are credible.  This company is a MONOPOLY.  Period.  Noone is even close to having their content, affordability, technology and the equipment in place to even compete on a level that they are.  Their main vehicle for bringing us this entertainment is of course in a vehicle.  I do not have the %'s but imagine that pretty much every household in the USA and Canada has at least 1 of them.  That opens up a pretty wide area of potential customers.  It also is affordable and also has many DIFFERENT types of talent on the air (From Howard, to NFL, to Oprah).  This keeps it to different genders, races, and religions so it does not discriminate.  Let's not also forget the tax advantages of the carry forwards for the next 5 years!!

    It also is priced fairly reasonable for a stock with a 7BILLION market cap, and has no significant increased expenses (other than loans) for the next 10 years (all satellites in place) They also have the ability to raise prices this year, which I hope they keep to the $1-2 range to lose less subscribers.

    Now, the bad news which I promised you.  Our company is 40% owned by LIberty.  This DOES send up a red flag in my eyes however I see it is a minor one.  The stock is near the price it should be at IF Not for the monopoly potential and the rollout of 2.0 later this year.

    You can get into 2013 calls at 2.50, 3.00 and 4.00 at reasonable numbers and still make a tidy profit come late 2011 into early 2012.  I do not see it reaching 4.00 by JAN 2013 BUT I believe a jump UPWARDS is coming in the next 4-6 months, or perhaps once 2.0 comes forward will drive those option prices up to turn a nice 20-25% return.

    Hope you enjoy this, and BASHERS there is a NEW SHERIFF in town to stop this madness!

    Disclosure: I am long SIRI.
    Mar 07 4:58 PM | Link | Comment!
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