QuantumLogicTrading
Long

APPLE: EARNINGS PREVIEW - LOW BAR; 1.38EPS & REVENUE $42.34BN

NASDAQ:AAPL   APPLE INC
4 months ago
Apple earnings to be released after market today

Expectations:

1. 1.39EPS and $42.31bn Revenue

- I personally have been an Apple             bull for some time - I believe the bar for apple             has been set low, with EPS             25% lower than last year and Revenue target also 15% lower than last year - I think this is achievable as Iphone SE sales will be included in the income statement for the first time this quarter which should help beat the low 42.34bn target.

Risks:

1. Obviously, if Apple             misses these expectations i see downside to $89-90 immediately happening - nonetheless I think this opens up a valuable buying opp             and I will be buying any 89-90 (or lower) lows, once the earnings hit/ miss flows are over as i believe apple             is very cheap on a multiple basis some 10x.

Trading Strategy:

1. On an earnings beat I think because AAPL             price has been depressed for so long (30% for 6m+), APPL             will see significant topside e.g. to $111 so you should BUY AAPL             at market and hold past the 101 breakout for 110tp.


2. Equally, if AAPL             misses, we should clear existing risk at $95 and reenter APPL             at the MISS bottom which should be $89, or perhaps less.


- I like owning Apple             as it is one of the least leveraged companies, with over 250bn in cash & marketable securities (highly liquid) and generates 40-60bn dollars in bottom line profit, with 200bn revenue - thus it is one of the most profitable companies. With this cash, Apple             in the future (under new leadership) can regain its prowess and make new highs e.g. 140-160 within the next 12-18m - before if they actually invest in M/A or some heavy R/D - poor leadership by Tim Cook is to blame for APPL's stagnant performance imo - they should have purchased Yahoo             to compete with Google             ad rev, Twitter to compete with FB             and Netflix             to grow their Apple             TV business - all of which would have worked due to Apples massive worldwide brand and i believe such acquisitions can be made in the future thus I value owning Apple             .

Any questions let me know.
4 months ago
Comment: Apple beat expectations at 42.4bn and 1.42EPS.

Not outstanding, nonetheless, the earnings call from Tim Cook gave Apple the momentum to break the 101 resistance and we closed post market up at 103.5 (filled the gap right in).

Today the market will go either way 1) with more liquidity backing the move break-out to the 104's - from here I would advise buying with a target of 110-112. 2) and my prefered prediction is that more liquidity brings us back down as 103.4 is high relative to the results - yes they just beat estimates but IMO the estimates were very low and i infact expected more. Nonetheless, given apples depression and even at 110 trading 20% down I can easily see this becoming a recovery rally to the 112 level before reversing (especially as the Nasdaq continues to make new 12m highs on its way to ATH). BOJ on friday is something to watch though - a miss will likely turn risk markets sour and take the carpet from under apples feet say if it was at 107.

Also it is possible that some profit taking immediately moves us lower to 101, then in the next few days we move through the 104 level on the upbeat earnings call given the 8% post-market move, we could see some TP before moving higher so watch out for signs of either of the three options.
isaac312 PRO
4 months ago
the best!!!
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QuantumLogicTrading isaac312
4 months ago
Thanks
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