APPLE OVERVIEW
Apple Inc. Apple closed at $493.42 on Friday, February 10, 2012, which is an all-time closing high. AAPL continues well above all the major moving averages on an incredible bull run with 4 consecutive weekly gains and 9 in the past 11 weeks. Apple’s market capitalization is not only #1 worldwide, but greater than Microsoft and Google combined. Apple reported legendary earnings on January 24. AAPL performance to-date:
Week: +7.34%
Month: +8.09%
Quarter, Year: +21.83%
2011: +25.56%
Apple is up +493.70% from the market cyclical low on March 9, 2009. AAPL is at an all-time closing high. Apple is easily outperforming the S&P 500 (+6.76%) in 2012.
Apple Fundamentals Apple reported calendar Q4 2011 financial results on January 24, 2012 and are reviewed here: “Apple Reports Legendary Quarter: Tech Record Revenues & Income”. A review and analysis of the Q4 2011 earnings call is forthcoming. The fundamentals of Apple are now legendary. Total assets are $138.68 billion, the highest of any technology company. Current and noncurrent cash and investment reserves are a mind-boggling $97.6 billion! Annualized return on assets is an outstanding +30.34%.
APPLE DAILY CHART
Apple Daily Chart Below is the AAPL daily chart since the October 4, 2011 and including calendar Q3 2011 and Q4 2011 earnings announcements.
Noteworthy Closing Prices
Current Close: $493.42 (All-Time High)
2012 High, Low: February 10 at $493.42, January 3 at $411.23
2011 High, Low: October 18 at $422.24, June 20 at $315.32
Cyclical High, Low: February 10, 2012 at $493.42, January 20, 2009 at $78.20
Apple Chart Review
Intermediate Term Trend 25d avg > 50d avg, AAPL > both, bullish
Long Term Trend AAPL > 10 month ema = 407, bullish
Key Resistance at all-time closing high, 2-10-12 all-time intraday hi 497.62
Key Support 1-31-12 peak 456, 20d avg 449, 1-25-12 peak 447, 1-18-12 peak 429
Moving Averages above all major avgs: 20d, 50d, 100d, 200d, 300d, 400d; bullish fan
Uptrend Line above since 12-22-11; line from 1-20-09 close 78.20 up thru 2-4-10 close 192.05
Downtrend Line none, at all-time closing high
RSI 14 Day = 88.03 is very overbought, descending
RSI 28 Day = 82.74 is very overbought, mostly level
MACD (12,26,9) = +3.67, highest since 10-18-11, ascending
Volume very high 22.5M latest day, 50 day avg = 11.99M, slight uptrend
Price Earnings Ratio (ttm) higher 17.19
APPLE SUMMARY
Commentary Apple rallied to yet another all-time closing high on Friday. Apple is overbought both short-term and intermediate-term. AAPL is +17.37% since the legendary earnings report on January 24. However, the calendar Q1 outlook has dampened the post-earnings pop and euphoria to some extent, believe it or not, or Apple would be well above $500 which is probably resistance too strong to break through. Apple seems to being pulled upwards by the overall market rally and exuberance, corporate and even government adoption of iPhones and iPads, and analysts raising AAPL price targets. This is indeed a case study in expectations, as Q1 estimated revenues are $32.5 billion and estimated earnings per share are $8.50. The Q1 projected revenues will be the second highest not only reported by Apple, but by any tech company ever! Holiday Q4 is the annual cyclical peak for Apple and Q1 is the annual cyclical trough, so the lower outlook was expected, but is still extraordinarily high. The introduction of the iPhone 4S early in Holiday Q4 resulted in an explosion of iPhone sales. The intermediate-term trend indicator continues bullish and the long-term trend continues bullish.
Apple Outlook When will Apple exceed the company and tech sector record Q4 2011 revenues of $46.3 billion and net income of $13.06 billion to propel earnings per share onwards and upwards? The short answer is not in at least the next 2 quarters. As noted, Holiday Q4 is the annual cyclical peak and Q1 is the annual cyclical trough. The record sales were achieved in Q4 2011 by launch of a major product at the beginning of October and the quarter – the iPhone 4S driven primarily by sales in the USA. The timing of the eventual iPhone 5 launch and expected tremendous sales growth in China will be required to set another quarterly sales record. To sustain incredible longer-term sales growth, India and other Asian nations also have to be ultimately penetrated. Revenues for Holiday Q4 2012 could beat Holiday Q4 2011 if the timing of the iPhone 5 is favorable and Asian revenues begin to exceed North America. A sales record in Q3 2012 is possible, but not probable, contingent on the launch date of iPhone 5 and the Asian revenue growth rate. Maybe you should just ask Siri?
Apple News A summary of recent news and views.
● Market Capitalization Apple is #1 worldwide at $458.59 billion, pulling away from #2 Exxon at $401.67 billion and #4 Microsoft at $256.53 billion. Apple surpassed Microsoft in market capitalization to become the largest technology company, and second largest overall, the week of May 24, 2010.
● Dominate Market Cap At 2-10-12, #1 Apple’s market capitalization ($458.59 billion) exceeded #4 Microsoft ($256.53 billion) and #12 Google ($196.25 billion) combined.
● iTunes Hacked? Reports of users receiving spontaneous refunds are surfacing, which may indicate a hack or at least a glitch. Apple has not officially responded.
● Apple Store Protests Activists protested at Apple stores worldwide in early February protesting the working conditions at Foxconn plants in China and calling for an “ethical iPhone”.
● iOS versus Android comScore reports Google Android had a 47.3% (+2.5%) USA smartphone market share for QE 12-31-11. Apple was #2 at 29.6% (+2.2%). Trailing RIM, Microsoft, and Symbian lost market share.
● China Networks Apple already partners with China Unicom to provide and sell the iPhone. Chatter continues for future partnerships with China Telecom and China Mobile in 2013.
● iPad Corporate Market Apple is touting rapid headway selling into corporations and the iPad has become “has become a standard business tool.”
● Final Cut Pro X was released January 31, a significant update to its revolutionary professional video editing application.
● China Working Conditions CEO Tim Cook responded to allegations of poor factory conditions in China, “We care about every worker in our worldwide supply chain. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.”
● iOrwell Apple has been accused of “ignoring the human cost” of its product manufacturing by a New York Times report, which criticized Foxconn’s poor factory conditions in China.
● Global Smartphone Shipments Apple regained the lead over Samsung in Q4, shipping 37 million units. Samsung shipped 36.5 million and Nokia 19.6 million. (Strategy Analytics)
● iPad Market Share was a solid 15 million units sold in Q4 2011, easing concerns that rivals were threatening market share.
● iOS versus Android Some market analysis is showing Apple has tied Google Android for USA smartphone market share in Q4 with record iPhone sales. (PC World, et. al.)
● India Apple may open stores in India, now that the government will allow full ownership of single-brand retail stores by foreign companies.
● China Telecom has expressed interest in offering Apple devices and the iPhone has been approved by the government for their network. (WSJ)
● iBooks 2 and iTunes U were unveiled to enter the digital textbook and educational market. (WSJ)
● Supplier Responsibility Report Apple released, for the first time ever, a list of 156 suppliers (here).
● International Sales accounted for 58% of Q4 2011 revenues, down from 63% in Q3 2011 and 62% in Q4 2010.
● Apple vs. Microsoft Apple reported calendar Q4 2011 total revenues of $46.3 billion and net income of $13.1 billion. Microsoft reported total revenues of $20.9 billion and net income of $6.6 billion. Microsoft has higher gross, operating, and net margins.
● Headcount Per the annual SEC Form 10-K filed 10-26-11 for the FYE 9-24-11, Apple had 60,400 full-time employees and 2,900 temporary full-time employees and contractors as of September 24, 2011. More than 50% of total employees work in the 357 retail Apple stores.
