This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Buy on Apple's Dip Ahead of Earnings

Stocks in this article: AAPL GOOG

After falling 6.5%, investors can be forgiven for scratching their heads and wondering how much more they need to endure. One strategic solution, especially attractive in front of earnings, is writing calls against some shares. Premiums are high as volatility (time premium) increases in front of the earnings release.

Obviously, I am bullish with Apple, but I haven't always been, and I am not an iFanatic with Apple's products (I own a Samsung S3). I rate Apple positively simply on the numbers, and the numbers are attractive.

The last reported short interest is paltry and without reason to consider it a meaningful influence at only 1.6% of the average trading float.

Google's (GOOG) miss shook the market, and shortages in availability of the iPhone 5 have many questioning if Apple can hit their numbers or not. What is missed in this conversation is it doesn't matter what the numbers are for the last quarter (within reason), because everyone with a finger on the buy and sell buttons during the earnings call will have their full attention on what to anticipate beyond 2012.

Questions related to supply and availability of the iPhone 5 are plaguing shares as if extreme customer demand for your high-margin product is a bad thing. People used to buy iPhones that couldn't make a phone call, and the status of the iPhone hasn't lost its luster. Count on Apple selling every last iStatus symbol it can produce until it is ready to release the next in the series.

I am leaning towards the upper end of the estimates and believe Apple blows the sliding doors off the minivan. I believe Apple delivers above the mean estimate. More important, I believe Apple rallies after the earnings are out as investors put risk back on.

Apple has been the "buy on dips" stock for several years, with good reason. The current dip will once again prove that those sitting on the sidelines should have jumped on board for the next $100 in gains. AAPL Revenue Quarterly Chart AAPL Revenue Quarterly data by YCharts




At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs