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Buy on Apple's Dip Ahead of Earnings

NEW YORK ( TheStreet) -- Wall Street expects strong fourth-quarter earnings growth from Apple (AAPL - Get Report) relative to last year after the market closes on Thursday.

The consensus is $8.85 a share, a gain of $1.80 from $7.05 during the corresponding quarter last year. Analysts are estimating as low as $8 per share, up to $10.05 per share. Even at the very low end, we are staring into the face of an increase of over 10%. AAPL Chart AAPL data by YCharts




Background: Apple, together with subsidiaries, designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players; and sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company was founded in 1976 and is headquartered in Cupertino, Calif.. Arch Coal trades an average of 16.1 million shares per day with a market cap of $587 billion.

52-Week Range: $363.32 to $705.07

Book Value: $119.23

Price To Book: 5.3

Forty-nine analysts rate Apple a buy or strong buy out of 55 analysts. The company has four holds, and two recommend selling.

Twenty-three out of 55 analysts now rate Apple a strong buy up from 22 analysts a month ago. Analysts overall have called this one correctly. In the last 12 months, the shares have accelerated higher. The one year return is 54%. The average analyst current target price for Apple is $778.32.

From a technical perspective, the chart on Apple looks interesting. The 200-day moving average is climbing, but the price broke below the 60- and 90-day moving averages in the past couple of weeks.

At the weekly and monthly level (where long-term investors should be focused on anyway), the picture is in stark contrast to the daily chart. Both the weekly and monthly charts are strong bullish trends with price near support levels. Even this week's dip fits in well with the longer term charts.

The company currently pays $10.60 per share in yearly dividends for a yield of 1.6%. Not what I would refer to as a high yielder by a long shot. But with a payout ratio of less than 25%, Apple has miles of room to increase the amount if the board wills it.

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