Where’s the crisis?
Greece? Russia and Ukraine? China stock market bubble/crash? Did these “crises” suddenly disappear? Why aren’t we hearing about them? Oh, because our own stock markets have rebounded and gotten back near their all-time highs. All is well with the world, I guess, huh? Let’s keep looking past the headlines and finding our balance and our edge. Balance, patience, and following a playbook that’s sustainable — those the keys to making big money in the stock markets.
Don’t forget to join me for this week’s Live Q&A Chat at 2pm EST at http://twc.scutify.com/members or send me an email by hitting reply to this email and I’ll include your question in the Cody Kiss & Tell transcript we send out later.
Here’s an update on Apple and our Apple supplier stock.
Apple – iPhone unit sales slightly underwhelmed. Apple didn’t provide specifics on Apple Watch but the CFO did mention in the earnings report conference call that it beat internal company projections. Most analysts were looking for Apple Watch sales of about 3 million units for the quarter and Apple’s own internal company projections could have been anywhere from 1 million to 3 million, so that CFO Apple Watch comment doesn’t really help much. The next couple earnings reports will have a lot of focus on Apple Watch and whether or not it’s a loser like most of Wall Street currently thinks it is. iPhone 6s and 6PlusS or whatever they’re going to call the next iPhones and how well they’re received by the marketplace is probably the next major catalyst for this stock.
Synaptics – This iPhone supplier is down along with just about every other Apple iPhone and Apple Watch supplier. Heck, almost every single semiconductor stock on the planet is down 3-7% today, and it’s just outright ugly in the chip world. I bought the bulk of my Synaptics stock when it was in the low $60s a few months ago and trimmed some in the $90s. I bought some of those shares back a couple weeks ago near $82. Synaptics is likely more than pricing in an ugly quarterly report and guidance here and the sell-off has been exacerbated by rumors that Apple’s going to internally develop their own touchscreen controller chips to replace Synaptics. Given that it would take at least a few quarters for Apple to do so, even if they’re successful in designing it in the next few quarters, I think that exacerbation probably gives the bulls the edge for both the near-term because any decent or especially a better-than-expected quarterly report would probably make this stock pop back towards $90 in a hurry. Of course, if the entire semiconductor supply chain is getting glutted up in the smartphone sector as Samsung struggles and Apple’s iPhone numbers weren’t good enough to offset that Samsung softness, then Synaptics could miss the quarter and guide down. And that, even with the current discount would likely take the stock lower anyway. I might nibble a little more Synaptics in the next few days if it drops down closer to $70, but the stock’s still 25% above my cost basis and I’m not in a rush yet. I’ll post any moves I make at TradingWithCody.com.)
Microsoft – Microsoft did less than half as much in sales as Apple did in the last 90 days. Microsoft’s market cap valuation is just slightly more than 1/2 of what Apple’s is. Isn’t it remarkable to think that Apple had a market cap of less than 1/10th its value today and that Microsoft has exactly the same value as back in 2005 when I wrote that some day Apple would be worth more than Microsoft? I’ve owned Microsoft at times in the past decade when the stock’s been crushed and there’s some valuation upside. I’ve owned Apple for twelve years though and am still holding it. It’s obviously grown into being my largest position over that time frame, and regardless, I would still rather own Apple than Microsoft.
