Light Holiday Forecast Weighs on Apple [AAPL]

Today's light forecast for the holiday quarter, combined with the macro concerns, is likely driving the stock after hours.

Apple posted a solid quarter with sales and earnings above Wall Street's estimates. Despite the record annual profit and revenue, Apple shares fell in after-hours trading.
The reason: all eyes focused on the company's (light) forecast for the all-important holiday quarter.
The company gave an outlook for the December quarter that was a bit below analyst estimates, despite the launch of iPhone XR sales in early October. Historically, the holiday quarter is Apple's largest in terms of sales and profit.
The light forecast in such a critical period is causing concern amongst short-term traders trying to make a quick buck on Apple stock heading into the holidays. The forecast comes amidst uncertainty over how Apple will handle macroeconomic issues in China and how those might affect consumer willingness to upgrade their devices.
Apple launched large-screen and dual-Sim smartphones this year, which were (and still are) expected to play well in the Chinese market. However, Apple must contend with trade-war tensions and new rules around game launches. Both could affect its revenue opportunities in China.
In a nutshell: today's light forecast for the holiday quarter, combined with the macro concerns, is likely driving the stock after hours. Apple's CFO also said the company will stop giving unit sales data on iPhones, iPads, and Macs in the near future. Investors who trade based on this data are hence also concerned.
Taking a step back, we don't believe Apple's intrinsic value just declined by $50-100B (which is implied by the stock's ~5-10% after-hours decline). The holiday quarter is important, but we think the guidance is conservative.
The long-term thesis on Apple is about its sticky software & services ecosystem surrounding its flagship iPhone user base. That's a wide moat enabling Apple to maintain pricing power and therefore sales and earnings growth, even though it may "miss" a quarter here and there.
We remain positive on the long-term prospects for Apple.
Nov. 1st, 2018
Share
As of this writing, AAPL was a portfolio holding of Titan Invest. This security may cease to be a portfolio holding at some point in the future.
The statements, opinions and analyses presented herein generally are provided as general information. Opinions, estimates and probabilities expressed in Titan research constitute the judgment of the author as of the date indicated and are subject to change without notice. While all the information prepared in the foregoing articles is believed to be accurate, Titan Invest (“Titan”) makes no express guarantee as to the completeness or accuracy of, nor can it accept any responsibility for errors appearing in, the foregoing articles. Other events which were not taken into account may occur, and any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. The information contained herein is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities. In addition, nothing contained herein is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. While Titan is a federally registered investment adviser, the information presented is not part of the personalized, proprietary algorithmic based investment advice provided by Titan to its advisory clients. Rather, the information presented constitutes educational and informational materials meant to better inform market participants, including, without limitation, current and potential advisory clients of Titan. Prior to making any investment decision, you are advised to consult with your broker, investment adviser, or other appropriate tax or financial professional to determine the suitability of any investment. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy discussed herein will be profitable or equal any historical performance level(s). Neither Titan, any of its affiliates, nor each of their respective officers, directors, members, agents, representatives, employees, or contractors (collectively, “Titan Parties”), shall be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided herein. You assume all risks of loss resulting, directly or indirectly, from the use of the information contained in the foregoing articles. By accepting receipt of the foregoing articles you acknowledge and agree to hold harmless the Titan Parties from any and all claims, actions, damages, losses, liabilities, costs and expenses of any kind whatsoever, including but not limited to any claims of negligence, arising out of, resulting from, by reason of, or in connection with the use of the information contained in the foregoing articles. Securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore no portion of the above shall constitute a waiver or limitation of any rights you may have under any federal or state securities laws.
Certain articles discuss historical performance of a particular issuer over a limited period of time. The historical performance discussed in such articles represents gross performance of the issuer over the limited period of time depicted, and is not indicative of any actual portfolio or investment returns of any account. Any such returns, even if an account was invested in the security discussed over the limited period of time depicted, would be reduced by fees and expenses paid by any such account. The foregoing articles contains certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results. Comparable companies, strategies, portfolios and indices may be included in the foregoing articles only as a context reflecting general market results during the depicted period or as of the specified date. The comparison of any company, strategy, portfolio or index to a single other company, strategy, portfolio or index may be inappropriate because the relevant assets, strategies and level of risk may vary materially from the comparable company, strategy, portfolio or index as a whole. Titan uses a proprietary algorithmic strategy in selecting recommendations to advisory clients. Issuers and/or securities discussed herein may be, and often are, held by clients of Titan in their investment portfolios. Any single security or issuer identified in herein will not represent all of the securities purchased, sold or recommended for advisory clients of Titan. Please see Titan’s website and Program Brochure for more details on security selection for advisory clients. Before investing, consider your investment objectives as certain investments are not suitable for all investors. Past performance is no guarantee of future results.
© Copyright 2018 Whisker Technologies, Inc. All rights reserved.