OK, I have to make an admission. I've been rather complacent regarding Apple's (NASDAQ:AAPL) prospects this year. I played a strangle option strategy prior to last quarter's earnings just breaking even in the end and didn't touch it this time around. The stock could have purchased in the 120s following the summer sell-off, but I've been thinking the stock's been overhyped. I've been wrong. Based on continuing impressive product cycles and innovation, I have to reverse my general lack of enthusiasm and endorse the stock as a long term hold.
One cannot ignore the continued strength of the U.S. consumer for these new releases, the Apple computer cool-factor, and continued waves of new, innovative products. Instead of toying with volatility and hoping for massive swings one way or the other, if I had simply gone long the day I bought my iPod mini, I'd have doubled my money multiple times over, or if going long in August, I could have been looking at a quick 50% gain.
Today, Apple released its 3rd quarter earnings. Net income rose to $904 million, or $1.01 a share, from $542 million, or 62 cents. Revenue climbed 29 percent to $6.22 billion in the 3rd quarter. Street estimates called for a profit of 85 cents on sales of $6.02 billion, according to Bloomberg.
This is one of Cramer's Four Horseman. I agree with about 50% of his calls (since his performance roughly matches the market, I can't endorse him any more than an average), but this is one where I've got to hand it to him.
Disclosure: No position in AAPL.