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  1. Phil

    What the Hell was that?  

    Seriously, up to $430 and now back to $406?  Oh well, as long as they're buying their own stock at this price I'm thrilled.  Conference call killed it – no promise of new product but, on the other hand, if that was the guidance WITH new products, THEN I'd be concerned.  The guidance they gave with no new products is fine with me.  

    Apple (AAPL): FQ2 EPS of $10.09 beats by $0.02. Revenue of $43.6B (+11% Y/Y) beats by $1.1B. 37.4M iPhones, 19.5M iPads, just under 4M Macs. Expects FQ3 revenue of $33.5B-$35.5B, below $39.3B consensus. Buyback increased by $50B. Shares halted. CC at 5PM ET (webcast). (PR)

    More on Apple: Quarterly dividend increased by 15% to $3.05/share (3% yield); Apple "plans to borrow" to return cash. FQ2 iPhone and iPad sales beat expectations, Macs a little light. Gross margin was 37.5%, at low end of guidance range of 37.5%-38.5% and -990 bps Y/Y. Apple expects to return $100 in cash via capital return program by end of 2015, up from prior $45B. Exc. retail, Americas revenue +7% Y/Y, Europe +11%, Greater China +8%, Japan +19%, rest of Asia-Pac +26%, Retail +19%. iPhone revenue only +3% Y/Y, iPad +40%, Mac +7%, iPod -20% on 5.6M units. AAPL halted, to resume trading at 4:50PM. (PR)

    A little more on Apple: Implied FQ2 iPhone ASP of $613, down from FQ1's $641 (was emerging markets discounting or a mix shift to older iPhones the culprit?). iPad ASP was $449, down from FQ1's $467 (shift to iPad Mini). Mac ASP of $1,378, up from FQ1's $1,359. iTunes/Software/Services revenue +30% Y/Y to $4.11B. Accessories +15% to $1.38B. R&D spend +33% Y/Y to $1.12B, SG&A +14% to $2.67B. Cash balance stood at $145B at quarter's end, up from prior $137B. 

    Tim Cook (AAPL) on the five-inch smartphone: "Our competitors have made some significant trade-offs in many of these areas in order to ship a larger display. We would not ship a larger display iPhone while these trade-offs exist." He adds that if IDC's right, the tablet market declined 30% since December, so Apple's decline of 15% beat the market. 

    David Einhorn likes Apple's (AAPL) feisty share buyback : "We applaud Apple's decision to borrow money and return excess capital to shareholders, an idea that was off the table only months ago. This positive development represents a more shareholder friendly capital allocation policy and demonstrates the conviction of Apple's management and board in the Company's future."

    More from Apple's (AAPL) FQ2 call: Mix shift towards iPhone 4 responsible for iPhone ASP drop; iPhone channel inventory up 1M Q/Q. Greater China sell-thru growth was 18% Y/Y, above reported (sell-in) 8%. Revenue mix shift towards iPad hurt gross margin, expected to fall to 36%-37% in FQ3 due to lower revenue and mix, partly offset by lower costs. Tim Cook talks of "exciting new product categories" (an iWatch?). While Cook said competitors made tradeoffs to offer ~5" phones, he didn't mention one-handed use (Apple's traditional critique) – is he hinting one will eventually arrive? AAPL -0.3% AH, as investors focus on FQ3 guidance (implies rev. growth of -4% to +2% Y/Y). CRUS -1.9%. (transcript) (previous)

    Here's the transcript.

     

    CC highlights:

    • Revenue for the quarter was $43.6 billion compared to $39.2 billion in the year ago quarter, an increase of $4.4 billion or 11% and $600 million over the high end of our guidance range.
    • Our revenue for the first half was over $98 billion and our net income was over $22 billion. During that time we sold 85 million iPhones and 42 million iPads. These are very, very large numbers unimaginable given to us just a few years ago.
    • Our revenues grew about $13 billion in the first half of the fiscal year. Event though that’s like adding the total first half revenue of Fortune 500 companies, our average weekly growth slowed to 19% and our first closure levels of a few years ago. Our 2012 results were incredibly strong and that’s making comparisons very difficult this year. Last year our business benefited from both high growth and demand per products and a corresponding growth in channel inventories along with the virtual mix of higher gross margin products and more favorable foreign currency environment and historically low cost.
    • Take the smartphone market for example IDC estimates that this market will double between 2012 and 2016 to an incredible 1.4 billion units annually and gardening into the tablet market is growing at an even faster rate from a 125 million units in 2012 to a projected 375 million by 2016.
    • An aggressive plan that more than doubles the size of the capital return program we announced last year to a total $100 billion by the end of calendar year 2015.  In addition, the share repurchases we are increasing our current dividend by 15% to further appeal to investor seeking yield.  
    • Based on research published earlier this month by comScore, iPhones garnered the number one spot in the U.S. smartphone market for the three-month period ended in February with 39% share, up from 35% in the previous (inaudible) period. In Japan, IDC, Japan announced that iPhone gained the number one position for all of calendar year 2012 as well as for calendar Q4 2012 in both handsets and smartphones. It’s also for the first time, a non Japanese company has achieved the number one spot for an entire year.
    • Turning to iPad we were thrilled to 19.5 million iPad during the quarter, compared to 11.8 million in the year ago quarter that’s an increase of 7.7 million units or 65%.  The most recent (inaudible) indicated a 96% satisfaction rate among iPad customers. 
    • First let me start with the tablet side, the numbers that we’ve seen from IDC would indicate that they believe the market in March declined by 30% from December, December being obviously seasonally high quarter with a holiday. As you can see from our numbers, we declined 15% and so if that holds, we did much better than the market and had a very nice pick up in market share.
    •  I think the reason that we were down last quarter, (inaudible) as Peter mentioned, the market for PCs are incredibly weak. I did see – said that the market for the March quarter was down 14% year-on-year which is the largest decline that I remember from being in this industry for long time. At the same time we sold almost 20 million iPads and it’s certainly true that some of those iPads cannibalize some Macs. 
    • Cumulative app downloads have surpassed 45 billion and app developers have made over $9 billion for their sale through the App Store, including $4.5 billion in the most recent four quarters alone. 
    • I’d now like to turn to the Apple retail stores. Revenue for the quarter was $5.2 billion compared to $4.4 billion in the year ago quarter, (inaudible) 19%. This was primarily by strong sales at iPhone and iPad. We ended the quarter with the total 402 stores including a 151 outside the United States. We expect to open about 30 new stores in total in fiscal 2013 and at least 20 stores in August. With an average of 401 open in the March quarter, average revenue per store was $13.1 million compared to $12.2 million in the year ago quarter. The segment income was $1.1 billion.  We had $91 million visitors to our stores during the quarter compared to $85 million in the year ago quarter.
    • And turning to our cash, we ended the quarter with $144.7 billion in cash for short-term and long-term marketable securities. From $137.1 billion at the end of the December a sequential increase of $7.6 billion overall $2 billion (??) of our total cash was off shore at the end of the March quarter
    • And cash flow from operations was $12.5 billion. We paid $2.5 billion of dividend in the March quarter and earlier this month we concluded $1.95 billion dollar accelerated share repurchase program that we initiated in the December quarter. Resulting in the retirement of over 4 million shares of Apple stock.

    Certainly not a stock we're upset to own long-term but I think we'll have a lot of opportunities to sell calls while we wait for things to pick up into 2014.  



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Zero Hedge

"All Men Are Not Created Equal" Louisiana State Rep. Rejects Declaration Of Independence

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via The Hayride,

HB 1035, a bill by Rep. Valarie Hodges that would have mandated that schoolchildren in Louisiana be taught the Declaration of Independence, sailed through the House Education Committee with a 6-2 vote. But Wednesday, when the bill reached the floor of the House, it had a different fate – amid a torrent of squabbling, Hodge...



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Phil's Favorites

Trickle-Down Crash? Trophy Assets Suddenly Tanking

Courtesy of John Rubino.

One of the defining traits of the past few years’ “recovery” has been the torrent of money flowing from big banks to favored clients, and from there into trophy properties like high-end real estate, superyachts, and fine art. This might be the first financial bubble to completely bypass the 99%.

And now it’s ending. Falling oil prices and negative interest rates (rich people own a lot of government bonds) seem to have sucked the animal spirits out of the 1%, leading to stories like this:

A Worrisome Pileup of $100 Million Homes

(New York Times) –...



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Market News

Breaking News And Best Of The Web

Courtesy of John Rubino.

China’s growth slows further. Japan ramps up the stimulus, bolstering the thesis that huge deficits are the next big financial mistake. The government’s fake numbers become a campaign issue. Charles Hugh Smith on why pension funds (that is, your retirement) are doomed. Great interviews with James Rickards and Helen Chaitman. Oil stabilizes and gold continues to correct. Look for next week’s COT report to be a lot less bearish. Bitcoin gets a serious cryptocurrency competitor. Trump clinches the nomination, but won’t debate Sanders. Clinton gets some bad legal news.

Best Of The Web

Here’s why all pension funds are doomed, doomed, doomed… – OfTwoMinds.com

...

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ValueWalk

Brian Bares on His Favorite Investment Books and Resources

By Jacob Wolinsky. Originally published at ValueWalk.

Brian Bares on His Favorite Investment Books and Resources

Here are some books he recommends

Berkshire Hathaway letters 

...



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Chart School

World Markets Weekend Update: The Global Rally Accelerates

Courtesy of Doug Short's Advisor Perspectives.

Seven of the eight indexes on our world watch list posted gains over the past week, up from five the week before, and the average of the eight was an impressive 2.60%. India's SENSEX was the outstanding out performer with a 5.34% surge, and three indexes, France's CAC 40, the Hong Kong's Hang Seng and Germany's DAXK closed the week with gains in the mid-three percents. China's Shanghai was the sole loser with its fractional 0.16% decline. Japan's Nikkei had the second worse performance with a modest gain of 0.59%. Incidentally, the Nikkei about 4% below its late January close when the Bank of Japan adopted its negative interest rate policy.

A Closer Look at the Last Four Weeks

The tables below provide a concise overvi...



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Kimble Charting Solutions

Gold Mining Stocks- Most dangerous time to own them in years?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The rally in mining stocks since the first of the year has been very impressive.

The rally has taken Gold Miners ETF GDX up to test the 23% retracement of the collapse over the past 5-years. At the same time it is hitting the 23% level, two other resistance lines are being put to a test, with momentum at the highest levels in the past 5-years.

Joe Friday Just The Facts...



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Insider Scoop

Graham Media Group To Buy WCWJ, CW affiliate In Jacksonville, NBC Affiliate in Roanoke

Courtesy of Benzinga.

Graham Media Group, Inc., a Graham Holdings Company (NYSE: GHC) subsidiary, said it struck a deal with Nexstar Broadcasting Group, Inc. and Media General, Inc. to purchase WCWJ, a CW affiliate television station in Jacksonville, Florida and WSLS, an NBC affiliate television station in Roanoke, Virginia for $60 million in cash and the assumption of certain liabilities.

The agreement to acquire Nextar Broadcasting included pension obligations. Graham Media Group, Inc. would continue to operate both stations under their current network affiliations.

Graham Media said the acquisition is subject to approval by the FCC, other regulatory appr...



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OpTrader

Swing trading portfolio - week of May 23rd, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

The Biggest Bitcoin Arbitrage Ever?

Courtesy of Chris at CapitalistExploits

Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?

Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.

I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.

I was thinking of this since a buddy of mine recently started ...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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Promotions

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

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News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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