Hi Neal,
I know... I am aware of that, and in the past this has caused a bit of a stir in AAPLs price at times, especially when it has been accompanied by beating earnings and raising forward estimates, as we saw in January:
139.142.147.218
I have noticed that there is usually a bit of AAPL bashing going into earnings, and sometimes the stock doesn't immediately respond (next report July 13, consensus $0.30). But the last earnings report was a different matter. I was expecting another great earnings report, and I was correct about that. But what I was NOT correct about was the subsequent market reaction. I thought history would repeat itself and AAPL would rally on the good news, perhaps after sputtering around for a few days first. But just the opposite happened.
At that time, AAPL reported earnings that nicely beat consensus (actually, they beat the street by a full 42%), and revenues increased 74% year over year, the highest year/year increase in their revenues by far, looking back at 8 years of earnings history. This is more than impressive, coming from a well-established company with over $3 billion in revenues; AAPL is hardly some white-hot microcap phenom that may have room for such growth.
Yeah, there was some whining about forward projections or revenues not being quite at the highest end of the range. But you gotta remember, AAPL's forward projections have consistently underestimated actual revenues, and are frequently revised upwards (sometimes 2 or 3 times a quarter, then again at the time earnings are announced). So the whining was about revenues that almost certainly will prove to be way too low.
Furthermore, this was also the 7th consecutive quarter where AAPL reported increased year/year revenues, and the magnitude of the increase has been methodically increasing from 8% (Oct. 2003) into increasing double digit increases every quarter thereafter.
Consider this: AAPL has beat earnings estimates now 13 out of the last 16 quarters. They have beaten the street for 9 consecutive quarters by an average margin of 43% (range, 13% to 100%).
It is hard to imagine how AAPLs earnings could be interpreted as anything other than positive. This is clearly the picture of a solid company methodically expanding its markets that has made a practice over the last several years of increasing earnings and revenues at rates better than all expectations, is becoming a gorilla, and speaks to top-notch management and marketing strategizing that is working. Yet, AAPL stock got hammered after that earnings report that most companies would LOVE to be able to give, and technically the stock took a hit that it still has not recovered from. I see increasing evidence that it will NOT recover any time soon, and seems destined to move down to test lower support levels.
One thing I have learned (the hard way, of course): no matter how great the story, when there is a discordance between the chart/technicals and the story or fundamentals or hype or all three, NEVER----I repeat, NEVER----bet against the chart.
Now, conventional wisdom will tell you that earnings growth is a far more powerful determinant of stock price than hype and visions of the future (or even the present), at least in the long term.
To the extent that is true, then it is hard for me to imagine how anything Jobs could say or present could even hold a candle to the stellar earnings growth performance that AAPL has displayed, and continues to report. Sure, you'll hear the usual chorus of ooohs and aaaahhhs from the devotees, geeks and techies, but no matter how correct they are, remember: they don't determine stock price at all. So what they think hardly matters.
In short: if earnings can't do it, then Jobs certainly can't either.
The charts tell me that for whatever reason, there is just not sufficient buying pressure/accumulation from the big players to sustain increasing price movement in AAPL at this time, and that continued movement down to test lower support levels (where such buying pressure may well emerge) is very likely.
....all IMHO, of course.
T |
