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Apple (AAPL) announced its third quarter (Q3) results on Tuesday and largely beat expectations. Some key points:
- Quarterly Revenue: $42.4 billion (beat by $310 million)
- Quarterly Net Income $7.8 billion
- Diluted Quarterly EPS: $1.42 (beat by $.04)
- Gross Margin: 38%
- $.57/share dividend declared (yield is currently 2.34%)
- Service revenue grew 19% year-over-year. It now represents 11% of Apple’s revenue (up from 8%).
A flood of positive sentiment and articles came out almost immediately after Apple’s earnings release. Apple stock closed up 6.5% yesterday, which is great because I think the company is undervalued. That said, I initially thought the market reaction was abnormally bullish based on Apple’s only moderate beats, in my opinion. In reality, the beat was simply a wake up call to bearish investors who had allowed a temporary decline in Apple’s growth to rule the stock price.
- Gilead Sciences (GILD) is trading at an absurdly low valuation, even considering slowing earnings growth.
- GILD has a well-managed balance sheet, high cash position, and decent dividend yield (2.16%).
- GILD is likely to be involved in a highly beneficial acquisition.
- There are some indications that GILD may positively surprise on earnings.
The Auto Industry
Let me start off by saying that my research into the car industry is some of the most difficult investment research I have ever done. There are so many critical factors affecting the industry and its future right now that it is just flat-out hard to get a grasp on. Since the recession and GM’s old demise, the car industry has rebounded nicely. Continue reading
Now that we’ve covered stock valuation for beginners, this is the first [exciting] edition of Stock Analysis Thursday where I will discuss stocks that I have done research on, usually in the same sector. As an FYI, I will tend to be bullish on the stocks I discuss. The reason why is that I will be sharing the research that I’ve already done for my own personal investments. When I come across a deal-breaker characteristic of a stock, I often stop and do not complete my full research into that stock. As a result, I cannot discuss those stocks. That said, in the future for the purpose of this site, I will attempt to complete my research into any stocks I look into and thus there will be some bearish articles too. Enough said, let’s begin. Continue reading