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Is the bad news fully baked in? Apple (AAPL +3.6%), which closed yesterday trading around 7.4x...

Is the bad news fully baked in? Apple (AAPL +3.6%), which closed yesterday trading around 7.4x FY13E EPS (exc. cash), has rallied back above $500 in spite of Pac Crest's downgrade. The company has received favorable notes today as well: Cowen says its checks lead it to believe Apple's smartphone share rose to ~23.5% in calendar Q4 from 16.4% in Q3. Some suppliers are also up: CRUS +4.5%. OVTI +1.4%. Sterne Agee is defending Skyworks (SWKS +3.5%) after meeting with its CFO.
Comments (42)
  • Morning short covering. AAPL has many bottoms, they get called at every new low.
    16 Jan 2013, 11:43 AM Reply Like
  • Apple has a very small amount of shares short right now, so it is highly unlikely this bounce is short covering.


    We have had four straight months of selling. The stock is very oversold regardless of what you think about its valuation.
    16 Jan 2013, 11:52 AM Reply Like
  • On a technical note...yesterdays low had positive divergence between
    a lower low and a higher RSI
    16 Jan 2013, 11:44 AM Reply Like
  • Stocks hit bottoms because every possible seller is exhausted. They can hit tops for the opposite reason. This is a very good sign for Apple going higher imo--that we got more downgrades and it is rallying. Let's remember that last year's 13 week, Apple to apples numbers are about 34mm iPhones, 14mm iPads, and 43B revs. The chances for another absolute blowout--iPhones and iPads>50% YOY unit growth, and Revs more than 30% YOY are better than a lot of these guys seem to realize.
    16 Jan 2013, 11:48 AM Reply Like
  • So then the guidance to the next quarter WON'T show a quarter to quarter increase (and it would be idiocy to expect it given the holiday and product releases) and that "decline" will be shreiked from the rooftops.
    16 Jan 2013, 01:33 PM Reply Like
  • Yep, it always goes down to the 2nd qtr, but I expect the guidance to be higher than last year's...meaning YOY growth for both 1st and 2nd.
    16 Jan 2013, 04:50 PM Reply Like
  • if this pop holds, and is followed by more buying tomorrow, watch for a move back to 550 by next wednesday.
    16 Jan 2013, 11:53 AM Reply Like
  • They just took out all the people with stops in the 490.00 to 499.00 region yesterday.


    Flushed them so that the big boys could do some more pump and dumping.
    16 Jan 2013, 12:08 PM Reply Like
  • Penny stock jargon for aapl?
    16 Jan 2013, 12:41 PM Reply Like
  • putting blind stop loss at such low levels is insane. Never right below round figure levels.
    16 Jan 2013, 01:38 PM Reply Like
  • All those who are risking money they cannot afford to lose are gone. Only long term holders and traders are left.


    I will let AAPL hit a true bottom, then buy after 2-3 consecutive days of consistent strength is shown. I will give up the first 10% of gains for the safety of the next 80%. Smart ones here see that I did not say 90%, as the last 10% of gains is forgone by selling just before top-out signals are shown or selling just after top-out price weakness is shown.
    16 Jan 2013, 12:19 PM Reply Like
  • bobbo - the way AAPL moves now, you may "give up" the move from $485 to $540 in the first 3 days of the bottom. Thats a 10%+ move overall, and would be well closer to 50% of a total move (assuming AAPL recovers 22% or so, and consolidates near $600.
    16 Jan 2013, 04:51 PM Reply Like
  • Ever notice how an Apple bear is always the first to post a response here. They must wait to post as soon as an S A post is made. Interesting....
    16 Jan 2013, 12:33 PM Reply Like
  • Ever notice how rocback is always the first AAPL-bull to attack AAPL-bears in every thread?
    16 Jan 2013, 03:54 PM Reply Like
  • chopchop is a good example
    17 Jan 2013, 09:44 AM Reply Like
  • Yesterday AAPL "plummeted" losing 15 points. Today's 17 point rally is referred to "as a bit of a bounce."
    16 Jan 2013, 12:41 PM Reply Like
  • Bingo! There you have it. I'm just glad that this idiocy will more or less be over on 1/23 when Apple reports earnings.
    16 Jan 2013, 06:15 PM Reply Like
  • Short interest in Apple is VERY low.Find another reason besides short covering.Wait till the last half hour of trading.
    16 Jan 2013, 12:46 PM Reply Like
  • the headline assumes that the bad "news" was ever substantiated. It wasn't.
    16 Jan 2013, 12:57 PM Reply Like
  • When the share price moves down or up everyone thinks they have the answer as to why it happened. Everyone's a genius looking in the rear view mirror and pontificating. A year ago no one was arguing w/ any conviction that the share price would run to $700 in 2012. 3 months ago no one had that unshakeable conviction that the share price would test $500. Now all of these bears have crawled out of the caves and reminded us that they shorted the stock at $690 and never looked back. The best investors in the world confess that they can't predict what a stock will do in the very short term, but some guy w/ a keyboard and 25 shares of Apple stock has this magical clairvoyance. It's funny to observe if nothing else.
    16 Jan 2013, 01:31 PM Reply Like
  • Very true. I'am not even sure that they speak truth & they never speak about their losses.
    16 Jan 2013, 01:43 PM Reply Like
  • there's an awful lot of noise isn't there? i am getting the feeling that aapl is being poor-mouthed for the benefit of the retail sphere. i guess if you day trade or go from 1/4 to 1/4 there may be some sense in it but i tend to doubt the imminent demise of aapl any time soon.


    long aapl
    16 Jan 2013, 01:48 PM Reply Like
  • Eh, its still doing terribly. The point is the trend is down. The downward momentum creates new potential sellers who get out at the topside of the downward channel. Its not rocket science. So yes, short covering helps move the stock up quickly after a nice downmove, short term long traders take advantage of this move to make a quick buck buying and dumping, and then holders start to rejoice they can get out with less of a loss and exit. Just in time for the shorts to jump back on. Repeat all the way down.
    16 Jan 2013, 01:50 PM Reply Like
  • SInce the start of the Apple dive last year, we seldom have had 2 green days in a row. I think the bottom is finally in. If we have another green day tomorrow, and another on Friday, that will be something we have not seen since thanksgiving, and mid October prior to that.
    16 Jan 2013, 01:57 PM Reply Like
  • Appl = casino chip. Aren't public equity markets fun?
    16 Jan 2013, 02:51 PM Reply Like
  • The title is misleading saying it went back up despite a downgrade. SA you forgot to mention that other analysts reiterated their buy rating. Plus it rose since there wasn't for once a made up rumour about apple's doom.
    16 Jan 2013, 03:10 PM Reply Like
  • aapl will go down to 5 EPS soon
    16 Jan 2013, 04:41 PM Reply Like
  • yes, pman. 5 EPS from just Itunes. I'm sure the iPhone, iPad, Macs, iBooks, iTV, iPeripherals are all dead. Not only with profit margins drop to 0% (ala the Kindle), they probably won't sell any of them.
    16 Jan 2013, 04:53 PM Reply Like
  • Apple is just NOT very good at anything anymore. Jim Cramer's daughter said so. It must be true. Get ready for bankruptcy any day now. Thank god they'll only have like $150 billion in cash to keep the company afloat after they report earnings.


    16 Jan 2013, 06:19 PM Reply Like
  • Simple: value trap
    16 Jan 2013, 06:33 PM Reply Like
  • lol. Let me guess. HPQ SNE and NOK are value plays?
    16 Jan 2013, 06:44 PM Reply Like
  • Repeat: value trap. 01/16 $506,09 . 01/19: $500,00
    19 Jan 2013, 10:58 AM Reply Like
  • I can think of worse value traps than AAPL. Dozens of them.
    19 Jan 2013, 11:54 AM Reply Like
  • Yes, of course there are worse. What Apple should be momentary. I say should because everything depends on Mr Cook and his board have new ideas. Apple grew thanks to the iPod, iPhone, iPad, iMacs and books. All Jobs and team creations. And now? The market does not reach the iPhone 10 or spanking new iPad ... the market wants new things.
    When Jobs was, each conference was a surprise and a new product. And now? renewals only products that have existed for years.
    Apple is the best, but hopefully Mr Cook not drop the company
    19 Jan 2013, 12:13 PM Reply Like
  • Now if they see the value trap? Currently 458.99 -10.70%
    I said it many times, Apple is in a difficult time
    23 Jan 2013, 06:11 PM Reply Like
  • The more of this I see, the more I'm convinced February will be a very good month indeed.


    lol @ bad news fully baked in.
    16 Jan 2013, 09:02 PM Reply Like
  • When AAPL falls below $500 it "tumbles below 500" but then when it rallies by well over 4% or $20 in hours it only "rallies" and doesn't "rocket", or "shoot", or "power higher" or another active, graphically descriptive verb.


    It's quite easy to see that SA's editorial comments on "Currents" have an editorial slant against AAPL. Jhonsa is clearly not a fan. Shame on such non-objectivity "on cue" whenever any good news or movement about the stock emerges. Am I wrong? Find me some text that contradicts what I say.
    17 Jan 2013, 02:48 AM Reply Like
  • It doesn't say smartphone owner share or smartphone buyer share. Going from 16.4% to 23.5% QoQ seems a great underestimation. Maybe they weren't checking up on the Brazillian manufacturing plants.


    I estimate $17.86 EPS, $64.8B Sales, 54.2M iPhones (+46%), 28.3M iPads (+83%), 5.5M Macs (+6%), 13.5M iPods (-12%), 41% GM. Mark this.
    17 Jan 2013, 04:18 AM Reply Like
  • $17+ EPS and 54mil iPhones would be a massive beat - that's quite optimistic. Stock would soar on that perhaps. Better stick with $15-range EPS at best, given the environment.
    17 Jan 2013, 05:51 AM Reply Like
  • What environment? >50M iPhones is guaranteed with AT&T, Verizon, etc. data and earlier and faster rollout and China. iPads should be up ~50-60% without iPad mini or ~80% with. All Tim Cook said was iPad mini may have lower margins (but do you think it will possibly be anywhere below 35%?) and intro of new products would reduce gross margins, but iPod is ~1% profit, new Macs were small portion of all sold Macs, and iPad 4 was easy to create from iPad 3. iPad mini would drive gross margins down 100 basis points at most IMO.
    18 Jan 2013, 12:46 PM Reply Like
  • All I know is more than 220 hedge funds own AAPL and the market has an uncanny ability of making a fool out of the largest number of participants. I wouldn't want to be trying to go through the same exit as them and everyone else. From a fundamental standpoint, you know a company is struggling a bit on the innovation front when they need to engage in legal battles with their competitors (Samsung) to protect market share. Initiating a dividend was also rather disconcerting from a growth perspective. I do not have a position in AAPL, these are just some observations.
    17 Jan 2013, 05:17 AM Reply Like
  • well, after a $200 point drop that already happened.


    legal battles are a must, can't let someone take your product design. even if they lose it sends a message. in the case Apple won there was an internal Samsung report, over 100 pages, where they looked at the iPhone and painstakingly discussed which they should adopt. this links to the whoel report, so people who say Samsung is now the innovator are in fantasy land, this is how Samsung made a decent phone, by copying iPhones, as this documetn made by Samsung for Samsung shows beyond any doubt. Frankly, I don't know why Apple doesn't use this report in an advertisement.

    18 Jan 2013, 05:29 PM Reply Like
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