The markets sure have had a hard time busting through the DJIA 14k range. You know I’m not nearly as bullish for the near-term as I have been in the past few years (especially when there’s not a panic out there to buy against). That said, I had a realization over the weekend. You always have to strive to “flip” even your own logic, and here’s what I realized — I’ve mentioned several times how remarkable it is that the markets have been able to rally to new all-time highs in the last few months without the help of Apple. And with Apple now trading at about 6x earnings ex-cash and with the apathy and hate that everybody is showing to Apple right now, maybe Apple and the markets are both set up for yet another big run to the upside. I sure wish the bears were out there blasting away at this market to really help set us up for a big rally, but here’s the Trader’s Thought of the Day –
If the markets have been able to rally to new all-time highs in the last few months without the help of Apple, where will the S&P 500 be if Apple were to finally show some sustainable rally action?
Meantime, we’ve got ZAGG coming up with earnings after the market’s close tomorrow. And we’ve got ADSK, my favorite play on the 3-D printing revolution, reporting tonight. I’m not sure that the 3-D printing revolution is going to be showing up in the ADSK demand curve this year, but five years from now it sure might be one of the biggest revenue drivers for Autodesk. I plan on starting to scale into some common on that one imminently, doing a half tranche in this one today before the report, just to get my toe back in the water in this name that I’ve made great money with over the years.
Here’s an insight into what one of my sources is looking for on ZAGG:
Top of List is to improve image of business and brand.
Longs need signs of business durability.
Investors love to hear “lots of runway” for revenue growth. New geographies, new products and roadmap, etc.
Show the cash flow. Talk up the free cash flow on call. Shorts hate free cash flow. I have seen bad revs/eps be totally salvaged by strong free cash flow generation.
And here’s what one of the sellsider’s, JPM’s, analyst is looking for in the quarter:
We expect ZAGG to report solid 4Q results and constructive FY13 guidance. The
company is executing to plan under the new CEO. Recent developments include
being first to market with products for the iPhone 5 and iPad Mini, debt
restructuring (reducing interest expense by $2mm p.a.), expansion of the product
line at CES, and announcement of a $10mm share buyback over the next 12
months.Solid 4Q results expected. We expect ZAGG to report 4Q12 GAAP EPS of
$0.28 on revenues of $83.5mm (Street: $0.28/$83.7mm). We expect solid
results as the CFO stated at CES that he was “very comfortable with 2012
guidance.” We expect 4Q revenues up 24% y/y with Invisible Shield sales of
~$40mm (up 27% y/y and 48% of revenues), ZAGG other which includes
keyboards up 22% y/y, and iFrogz up 20%. We expect gross margins to end
2012 at ~46%.
I’ve no feel for how this quarter will play out, but feet to fire, I’d expect that any decent report and guidance (and cash flow, as noted above) in the report would get a big of a short-squeeze going afterward.
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