The shadow of a man is cast on the wall of an Apple store as he uses his mobile phone in Beijing on … [+]
Apple
AAPL
Earnings Preview:
The company is expected to report a gain of $1.93/share on $122.05 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $1.96/share. The Whisper number is the Street’s unofficial view on earnings.
Charts & Data Courtesy MarketSmith Inc.
A Closer Look At The Fundamentals:
It is very impressive to see that sales grew in each of the past four quarters. It is also impressive to see that earnings grew in three of the past four quarters. That is impressive for several reasons, first the environment was lousy for tech stocks. Second, it is not easy for a company this large to continue to grow, especially in a lousy environment. It is also very healthy to see the company enjoy triple digit Return on Equity in each of the past four quarters! Normally, high double digits would be cheered, >150% in each of the past four quarters is exceptional!
A Closer Look At The Technicals:
Technically, the stock fell over the past year as the bear market hit many tech stocks. However, the bulls were resilient and the stock is only 16% below its 52-week high which is impressive, considering many other tech stocks fell by 50-70%! The stock jumped above its 200 day moving average line which is a bullish sign. The bulls want to see the stock gap up and the bears want to see it gap down after reporting earnings.
Pay Attention To How The Stock Reacts To The News:
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclosure, the stock has been previously featured in my FindLeadingStocks.com newsletter.
