If you thought Apple’s stock was rich at its current lofty levels above $600, just wait until you get a load of it at $1,100.

So thinks one analyst, who despite the company’s surprising earnings miss on Thursday is maintaining a $1,111 price target on its stock – putting the tech giant’s market capitalization above a whopping $1 trillion.

Apple’s [AAPL 604.00 -5.538 (-0.91%) ] disappointing third quarter performance was a rare misstep for a company that normally can do no wrong in the eyes of Wall Street investors. Still, Brian White, analyst at Topeka Capital Markets, believes Apple’s fundamentals justify his aggressive price target.

“It’s very reasonable for a company that’s growing at this rapid pace,” said Brian White, analyst at Topeka Capital Markets. He called Apple’s stock “significantly undervalued,” especially given a revenue outlook of $52 billion.

With the company unpacking both a new iPhone and two new versions of its market beating iPad, White says that many analysts are struggling with how to accurately estimate the company’s performance, and the impact of key products on its bottom line.

It all started when the iPhone 4S launched last fall. “The Street didn’t exactly know how to model that seasonality, and you’re seeing it again,” White said. “This iPhone 5 is a much bigger launch than 4S, so people are really grappling with how do you model the seasonality.”

Although Apple watchers applaud the company’s innovative products, some have wondered whether it — like Microsoft [MSFT 28.21 0.33 (+1.18%) ] — could soon find itself traveling on a road to eventual irrelevance. Apple’s recent success has been on updates to existing products, and a few analysts have pointed to a pipeline of products that looks fallow.

White, however, says Apple can continue its ascent by making do with what it already has.

“Their market share in the core markets is tiny, so they still have a big opportunity to gain share in their markets,” the analyst said. Meanwhile, the new iPad Mini, which is priced at $329, “opens up a whole new product opportunity in the lower-end tablet.”

In that way, White said, the company won’t need a new game-changing gadget to achieve his price target.

Source: Published: Friday, 26 Oct 2012 | 1:28 PM ET
By: Javier E. David,
Special to CNBC.com

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Market Pulse

24Oct12

YIELD SIGN
Stocks have already more than doubled since hitting bottom in 2009, but financial analysts say they can climb still further. One reason: Many offer higher yields through dividend income than government bonds. Fifty-seven percent of companies in the S & P 500 index have a dividend yield above the yield on the 10-year Treasury note, according to Wells Fargo Wealth Management. In 2006, only 1 percent did. That’s mostly because the yield on the Treasury has dropped so much: It’s down to about 1.75 percent from 5 percent in 2006.

Source: Wells Fargo, written in the Oregonian Spetember 22, 2012

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Despite its now notorious problems with manufacturing, Apple (NASDAQ:AAPL) is now seeing calendar fourth quarter iPhone 5 build orders of between 60 and 65 million units from the previous 55 to 60 million. If this proves accurate, Peter Misek at Jefferies thinks it’s a positive for component suppliers like Qualcomm (NASDAQ:QCOM), Cirrus Logic (NASDAQ:CRUS), OmniVision Technologies (NASDAQ:OVTI), and Broadcom Corporation (NASDAQ:BRCM). The analyst added that iPhone 5 lead time is still at 3 to 4 weeks in the 31 countries where it can be used, and continues to expect that 55 million iPhones will be shipped in the current quarter.

Source: By Mark Lawson

October 17, 2012

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With little question, the leader among high cap stocks the past four years has been Apple (NASDAQ: AAPL). After bottoming at about $97 per share in late September, 2008, it has been trading close to $700 recently, for an average annual increase in share price value of about 65%. Over the last five years, earnings have grown at a 73% compounded clip.

The company hasn’t achieved this astonishing growth by being the perfect company—in fact, there are websites devoted to mistakes the company has made in its product. But it is simple to discover Apple’s success beyond the dollar signs.

Twenty years ago, Apple was a computer company, and nobody would have thought it would come to dominate digital music, tablets, and smart phones as it has. In fact, Apple fundamentally created these markets. That being said, I do not know what Apple will be selling twenty years from now. Televisions? Smart cars? Womens’ dresses (microchips included)? What I do know is that in 2030, Apple will be selling, in large volume, something you and I can scarcely conceive of today.

With much fanfare, Apple recently released its iPhone version 5. Sales of the phone in this country are limited only by Apple’s supplies. Through its first weekend on sale, Apple sold over 5 million units of the new phone, with millions more being sold overseas.

Perhaps most interesting, the phone includes a Qualcomm modem chipset compatible with China Mobile (NYSE: CHL) and its 688 million subscribers. Apple had already been selling product through China’s second and third largest carriers, China Unicom and China Telecom. But China Mobile in particular is an interesting proposition.

Its scope, in case you were not paying attention, gives it a subscriber base well over twice the number of men, women and children in the U.S., and it has room to grow. In the first half of 2012, China Mobile grew its subscriber base by 5%, increased the number of minutes used by its customers to 9%, and increased data usage, which became 11% of overall revenue in the first half of 2012. Only about 10% of its subscribers use 3G service, so China Mobile has plenty more room to grow its data based services.

The stock has struggled some as China’s growth rate has ebbed, but over the long run, steady revenue and profit growth are likely from this behemoth. Couple that with a dividend yield of 3.4% and a beta score of just 0.14 and China Mobile is a fine choice for conservative investors seeking Asian exposure.

Despite recent success, all is not quite perfect for Apple. Its massive, 80,000-employee factory in northern China has been the location of worker unrest and riots. The new iPhone has also taken heavy criticism, as Apple rejected using Google’s (NASDAQ: GOOG) ubiquitous mapping app in favor of Apple’s new, proprietary application. Apple’s map hasn’t been received very well, and needless to say many users are still finding themselves relying on Google Maps instead.

On the earnings side, the deluge of these high margin phones and tablets will likely give Apple sterling earnings for the first quarter of fiscal 2013. In its third quarter of 2012, Apple posted earnings of $9.32 per share on revenue of $35 billion, up 19.6% and 22.4% respectively. While those are hardly embarrassing numbers, they were disappointing by Apple standards. This lackluster performance was largely due to many Apple devotees waiting on new versions of Apple’s iPhone and iPad before making purchases. And unfortunately, fiscal fourth quarter will benefit from one week only of iPhone 5 sales, which may translate to another earnings disappointment.

Apple is the most richly capitalized stock in this country, with a market value of nearly $650 billion. There is much chatter of Apple perhaps becoming the first U.S. based company to reach a capitalization of $1 trillion. I don’t see why Apple would not reach that number, and with a PEG of 0.69, it even appears that Apple may be undervalued by traditional measures. Value issues aside, this is the growth company of our era, and I do not believe the ride is over yet. At a 20% annual growth rate, that trillion dollar barrier will be breached by mid-2015. I bet Apple gets there.

Source: By Maxwell Fisher – September 27, 2012| Tickers: AAPL, CHL, GOOG| 0 Comments

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With the proliferation of smartphones, tablets and other mobile-enabled gadgets, telecom companies will continue to build out their wireless networks to support the anticipated explosion in data usage.

That puts companies like American Tower [AMT 70.90 0.49 (+0.7%) ] and Crown Castle [CCI 63.97 -1.29 (-1.98%) ], which own cellular towers and other wireless infrastructure, in position to benefit from the coming data boom.

Apple’s [AAPL 690.79 -9.305 (-1.33%) ] iPhone 5 could be a transformational event for the wireless industry, American Tower CEO, James Taiclet, told CNBC’s “Squawk on the Street” on Friday.

“What this does is it takes the most popular device with the most applications and brings it into the most modern wireless technology being operated in the world right now,” he said. “So you’ll be able to do much more robust things as a consumer.”

For one, consumers will be able to use the iPhone 5’s video chat, Face Time, on mobile, not just wi-fi.

(Read More: Apple’s iPhone 5 Launches Across the World.)

That will consume a good deal of data and wireless companies — like AT&T [T 38.25 0.17 (+0.45%) ], Verizon [VZ 45.68 0.04 (+0.09%) ] and Sprint [S 5.70 0.05 (+0.88%) ] — are going to strive to be able to deliver that signal where people are going to need it, Taiclet said.

While there are about 300 million wireless subscribers in the U.S. only 10 to 15 million will have the 4G iPhone 5 initially, he noted, so carriers will have plenty of time to meet the expected boom in data demand.

Taiclet expects it to take six to eight years to roll out the service completely, and every year, there will be more equipment put on more towers. Since the towers are already built in the U.S., American Tower “won’t have to invest the capex for a brand new tower every time a carrier needs a transmission.”

American Tower is also moving overseas in search of new growth. The company is building 1,000 towers a year in India compared to the 250 or so they build in the U.S. each year. They’re also buying towers and partnering with carriers in places like South Africa, Brazil, Mexico and Ghana.

“In a place like South Africa and Mexico, they’re just now implementing robust 3G services,” Taiclet said. “If you go further back on the technology curve, countries like Ghana and India have not started on a robust 3G network.”

Source: CNBC Published: Sunday, 23 Sep 2012 | 4:06 PM ET |Justin Menza

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While many investors fear the market is ignoring reality, some technical analysts say stocks could continue to move higher as the market looks past what worries it. The unresolved European debt saga, the so-called U.S. “fiscal cliff” and the tension surrounding the U.S. presidential election are all wild cards for the market.

Slowing corporate earnings and the sluggish U.S. economy and global growth, in general, are all valid worries. Yet stock prices are riding a wave of momentum to near four-year highs, even as few investors can be found that love the stock market.
“I think we’re in good shape to go higher, sort of riding the run if you will,” said Carter Worth, chief market technician at Oppenheimer Asset Management. The S&P 500 closed above 1,400 Tuesday for the first time since early May, and it was hovering in that area Wednesday afternoon.

“It has to do with the world looking out. The market right now is contending with the last week in January and first week in February. Obviously, whatever the fiscal cliff people are talking about, we will be past it. Whatever election people are talking about, we will be past it,” he said. “The number one leading indicator is stock prices … so here it is, the message of the market is things are not as bad as the headlines would appear.” (Read More: Cramer—Biggest Myth About Markets)

More fundamentally oriented market strategists have been worrying about slowing earnings and fretting about the potential of a congressional battle royale over the fiscal cliff, the dual expiration of tax cuts at year end and automatic spending cuts Jan. 1 if Congress fails to act. Some say it has already slowed business activity and will hit the stock market much like last summer’s deeply partisan congressional feud over the U.S. debt ceiling.
Strategists also say the stock market is being supported by the prospect of more Fed easing, ahead of its Sept. 12 meeting. The double whammy of possible moves by the European Central Bank are also underpinning markets. (Read More: Is the Rally Just a Set-Up for a Bigger ‘Collapse’?)
Barclays Capital chief technical analyst Jordan Kotick said, however, that stocks are moving beyond the immediate economic worries.

“Not so much is happening today, but yesterday was a very big deal. The SOX (semiconductor index) confirmed a bottom. You also had, equally important, the small caps also confirmed a bottom yesterday,” he said Wednesday. “The SOX and small caps are economically sensitive so the fact they confirmed a base is suggestive that the bearish apocalyptic trade is being priced out of the market, and we are evolving toward a more stable, optimistic, more bullish environment for equities.”

Kotick has expected stocks to correct during the summer and see a move up in the fall. “Since 1900, if you look at the election season (starting) from August to September, the market tends to really trade positively. From August to the end of the year, we call it pre- and post-election optimism. You have a very strong tailwind,” he said.

“The market always wants to find the pain trade,” he said. “Most people are either neutral bearish or really bearish. The most painful trade would be a higher stock market because nobody has it,” he said.

Not all technicians are convinced equities will continue to ride the current wave higher. Technical analyst Louise Yamada said while the stock market feels like it will head higher, there are some warning signs. One is that the Dow average and Dow Transports are not moving in tandem, as the Dow theorists believe they need to be to confirm a bullish move. The Dow on Wednesday afternoon was up more than 1 percent for the month so far, while the Transports were about a third of a percent lower. (Read More: Dow Rally Likely to Hit Barrier at 13,500)

Her proprietary volume indicator is also sending a troubling sign. “The up/down relationship has not been impressive. It’s been right on the line of trying to get out of oversold and going back to oversold,” said Yamada, managing director at Louise Yamada Technical Research Advisers.

“There’s not the oompf yet that you like to see if something’s going to move substantially higher,” she said. If the volume indicator does not move into the zone where it shows positive buying volume, “that leaves some question marks as to what’s happening below the surface.”

Kotick said he does not expect to see a straight move higher. “The next couple of weeks, end of summer, slow volume whippy trading, meandering tone, but we are setting up for gathering strength before and after the election,” he said.

Yamada said the market’s technical cross signals are a bit puzzling. “It seems to be selective stocks that are getting an inordinate amount of attention. At least we’re seeing a little bit of possible broadening,” she said.

Oppenheimer’s Worth said the market is being powered by relatively few names, and some of the recent high-profile blowups, like Priceline [PCLN 563.162 0.902 (+0.16%) ]and Coach [COH 54.83 -0.23 (-0.42%) ] have little impact on the averages. “The top 40 names in the S&P 500 mathematically would represent 46 percent of the S&P,” he said.

“The only way you see trouble is if you start seeing trouble in those,” he said.

Worth expects the S&P to finish the year at 1,450. “When we get to 1,422, you back and fill,” he said. That would then take the index to 1,400, 1,390, before positioning it for a new high of 1,435 and 1,450.

Source: By: Patti Domm
CNBC Executive News Editor
Published: Wednesday, 8 Aug 2012 | 2:34 PM ET

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Housing prices have now risen for the last year in more than half of major U.S. cities, marking a milestone in the historic housing collapse that set off the 2007-2009 recession and now may be nearing an end.The S&P/Case-Shiller home price index rose 2.2% in May, beating economists’ forecasts, as all 20 of the nation’s largest metropolitan areas posted gains from April.

More important, 12 of the 20 cities now have higher prices than they did a year ago, suggesting that the improvement is durable, the report said.

The 20-city composite home-price index overall is down 0.7% in the past year. The biggest gains have come in Phoenix, where prices are 11.5% higher than 2011, and the worst performance was in Atlanta, where the home price index is down 14.5% from last May.

In addition to Phoenix, other hard-hit markets are posting some of the bigger gains in home prices, the Case-Shiller report said. Tampa and Miami are each up about 3% in the last year. Homes in Phoenix are still less than half as valuable as in 2006, and Las Vegas is down more than 60%, the report said.

The biggest month-to-month gain was a 4.5% climb in the index for metropolitan Chicago, the report said. Atlanta had the second-biggest monthly gain.

Case-Shiller home price index
Metro area May index Change from April Change from 2011

Atlanta 87.85 4.0% -14.5%

Boston 150.67 2.4% -0.1%

Charlotte 112.84 1.0% 0.9%

Chicago 108.62 4.5% -3.0%

Cleveland 99.17 2.4% -0.1%

Dallas 118.6 1.9% 3.8%

Denver 128.48 2.1% 3.7%

Detroit 66.1 0.4% 0.6%

Las Vegas 92.55 1.9% -3.2%

Los Angeles 165.76 2.2% -2.0%

Miami 143.35 1.4% 3.4%

Minneapolis 113.47 3.1% 4.7%

New York 160.4 1.4% -2.8%

Phoenix 111.92 2.7% 11.5%

Portland 135.09 2.6% 0.4%

San Diego 153.06 0.9% -1.1%

San Fran. 135.28 3.9% 0.6%

Seattle 137.37 2.6% 0.6%

Tampa 130.26 2.0% 2.5%

Washington 185.55 2.5% 2.8%

The indexes have a base value of 100 in January 2000; so an index value of 150 translates to a 50% appreciation since then for a typical home in the market.
Source: S&P Indices and Fiserv

“We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns,” says David M. Blitzer, Chairman of the index committee at S&P Dow Jones Indices. “However, we need to remember that spring and early summer are seasonally strong buying months, so this trend must continue throughout the summer and into the fall.”

Housing is expected to help the economy grow this year for the first time since the recession, according to forecasts by Bank of America Merrill Lynch and other economists.

Housing prices have dropped about 35% from their peak and the nation has shed more than 2.2 million construction jobs since early 2007, including 455,000 in residential construction, almost half the industry’s total.

Merrill’s forecast says housing prices will be close to flat this year and next, with mid-single-digit nationwide gains emerging by mid-decade.

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With the housing market stabilizing after years of decline, buyers who had been waiting for a bottom are now showing up in force.

But home-sales numbers released Thursday by the Regional Multiple Listing Service show sellers remain on the sidelines. In June, demand outpaced supply to a degree not seen in more than five years.

The 8,799 homes on the market would sell in 3.9 months at June’s sales rate. Six months is considered a balanced market, and anything less shows more demand than supply. The last time the measure was lower was March 2007.

“It’s not like we have a shortage of buyers,” said Brian Houston, the principal managing broker at Coldwell Banker Seal in Portland. “There are buyers ready and able, ready to go. We just have a shortage of homes.”

Would-be homebuyers have been lured back to the market by the gathering consensus that housing has started to recover. Homes are more affordable but are no longer losing value.

Meanwhile, mortgage rates continue to hit record low after record low, amplifying that affordability. On Thursday, the average rate for a 30-year fixed mortgage fell to 3.56 percent, according to Freddie Mac. That’s the lowest since long-term mortgages began in the 1950s.

Deals closed on 2,244 homes during the month. That’s fewer than half the number of transactions recorded that month at the market’s peak, but it’s a 14 percent increase compared with a year ago. Buyers and sellers agreed on a price on another 2,435 homes, most of which will be finalized in coming months.

The limited home supply and competing buyers have pushed prices higher. The median sale price in June was $242,000, an 8.6 percent increase compared with a year earlier.

But that hasn’t yet galvanized homeowners to sell. June brought 3,208 new listings, 2.1 percent more than a year earlier. Still, new listings for the year to date lag 2011 by 6.8 percent.

Many homeowners who might otherwise sell are hoping prices will continue to rise, said Nick Krautter, of Keller Williams Realty in Portland.

“I just don’t have as many sellers coming to the table as I would hope,” he said. “The crystal ball question now isn’t, will prices go up? The crystal ball question now is, how much do you think it will it will go up over what period of time?”

To that end, some move-up buyers are choosing to rent out their old house instead of selling it, Krautter said. Slow production of new apartments during the recession means fewer are vacant, creating more competition among renters and allowing landlords to charge higher rents.

And other would-be sellers have asked real estate brokers to evaluate their home, but aren’t happy with what they learn, said Mickey Lindsay, vice president of Beaverton-based Oregon First Realtors.

“It’s nice to see prices are going up a little bit, but most sellers putting their homes on the market are still surprised how much their value has fallen,” she said.

Elliot Njus
Oregonian
July 13, 2012

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Last month’s jarring decline in the stock market may only prolong investor anxiety. Investors have pulled money out of U.S. stock mutual funds for 12 months straight – a net total of $178 billion.

Many continue to ditch stocks and shift their money elsewhere. But “playing it safe” comes at a cost. Over the long run, fleeing to cash or buying Treasurys maybe even more dangerous in an era of low interest rates and low returns. It can do permanent damage to your money’s buying power and your retirement prospects.

Even with periodic plunges, the stock market provides the most realistic chance for your savings to beat inflation over the long term. The quest for safety also can cause you to lock in big losses. After the market hit bottom in March 2009, the Standard & Poor’s 500 index rose 50 percent in about six months. Many investors weren’t in the market during that run.

“It’s easy to jump off the train, but it’s difficult to get back on when it’s moving,” says Jim McCool, head of institutional services at Charles Schwab.
Besides, so-called safe havens aren’t all that safe anymore:

CASH Although it can provide a sense of security, cash doesn’t hold its value well. The average yield on a money-market account is just .46 percent. Even the best-paying online savings accounts pay 1 percent or less. And “high-yield” checking accounts offer less than that.

CD’S Certiificates of deposit also pay poorly. The highest rates available are 1.15 percent last week and remains at a meager 1.62 percent as the result of the stampede into safety.

Treasuries The yield on the benchmark 10-year U.S. treasury note fell to a record-low 1.44 percent last week and remains at a meager 1.62 percent as the result of the stampede into safety.

GOLD It is far too speculative to be used wisely as protection against a falling stock market. Gold fell $46 to settle at $1588 an ounce Thursday, after Fed Chariman Bernanke didn’t give any signals that the central bank would take immediate action to stimulate the economy.

Sources: Bankrate.com; BlackRock.com, Dave Carpenter; J. Paschke -AP (Oregonian, Friday, June 8th)

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Mom-and-pop investors, and not the Federal Reserve, have been the ones most responsible for driving the mad dash to government debt, according to newly released data.

The Fed’s ambitious Treasury-buying program has pushed the central bank’s balance sheet to $2.83 trillion and, by many accounts, the benchmark 10-year Treasury yield to record lows, most recently to 1.56 percent.

But despite the low yields, it’s been retail investors most responsible for the recent move plunge.

“The conventional view is that 10-year Treasury yields have been pushed down to 1.5 percent and 10-year (Treasury Inflation Protected Securities) yields to -0.5% by the actions of the Federal Reserve and the safe haven demand from foreign investors,” Capital Economics said in a research note. “The reality, however, is slightly different.”

The demand among average investors has swelled so much, in fact, that they bought more Treasurys in the first quarter than foreigners and the Fed combined.

Households picked up about $170 billion in the low-yielding government debt during the quarter, while foreigners increased their holdings by $110 billion.

The Fed, meanwhile, actually slightly decreased its net holdings, not a surprise since its latest quantitative easing endeavor begun in September — nicknamed Operation Twist — was designed to be balance sheet-neutral. The central bank is selling short-dated notes and buying an equal number of longer-duration issues in an effort to drive down borrowing rates and boost risk.

For Capital, the more meaningful aspect of Treasury demand from households is that should the Fed opt not to do more easing when Twist concludes at the end of June, there still will be demand for government debt that could keep yields from surging as some expect.

Retail investors have continued to draw down their money market funds but direct the cash instead to bonds, while equity mutual funds continue to lose flows. The move is seen in large part because of fears over the European debt crisis and U.S. economic slowdown.

Last week saw a mild reversal of the trend, with equity funds taking in about $1.5 billion and bonds losing $317 million, but the long-term story has been clearly on the side of fixed income.

“This suggests that even if the crisis in the euro-zone were to be solved overnight, any easing in demand for Treasuries from overseas investors may at least be partly offset by a further increase in demand from households,” Capital’s economists said. “With banks still looking to increase their holdings of risk-free assets and the Fed standing ready to launch a QE3 if conditions deteriorate, that may limit just how far Treasury yields can rise.”

Source: By: Jeff Cox
CNBC.com Senior Writer
Published: Friday, 8 Jun 2012 | 2:09 PM ET

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