AAPL closed July 31st over $610 a share, erasing most of its loss after earnings release. There’s a few important catalysts moving the stock:
- Macro economic factors have subsided a little. Greece isn’t leaving the Euro and Europe itself isn’t failing this week. China is likely to offer up some stimulus to keep its economy up a bit. There’s been little talk of Iran/Israel. While Syria is a mess, the general state of things is calm and that helps ease overall pressures on AAPL’s P/E.
- iPhone 5 launch rumors abound. September 12th has been pegged as the date of a media event where AAPL will release the next gen phone. I previously suggested September 7th as being exactly six months after the iPad release. If I had looked at the calendar, I would have seen that was not a realistic date as AAPL always holds events on Tuesdays. Tuesday in this case would be September 11th and I think they chose wisely in bumping it up one day.
- The shipping date for the next iPhone is said to be September 21st (Friday as usual), giving the company about 9 days in the quarter to squeeze out sales. Analysts have talked about 5 million sale opening weekend. With the follow up days, I’m guestimating AAPL could push out about 9 or 10 million phones, if they’ve got them done and ready to sell.
- Rumors for the iPad mini are also heating up. There’s some suggestion it will happen this fall, possibly with the iPhone event. That would be great and change a lot of estimates. I’m still not entirely convinced it will be there.
- There’s some suggestion a stock split would lead to a listing in the Dow. People just love talk of a stock split, but that type of news can’t produce a long term move in the stock.
- Ex-dividend for AAPL’s first ever dividend is August 9th. At $2.65 a share, it’s a mere 1.7% on today’s close. Still, it offers to bring in a new class of investor and new institutional funds as it becomes a dividend payer.
I’ve used profits from Sprint (S) calls to fund new AAPL calls since the earnings disappointment. These are now performing well, however, more “fast” upside is needed in order for me to capitalize on some of the far OTM September calls. To move out longer, I added 1 Feb $800 call today as this would include the January earnings release. Investors looking to play that after the iPhone launch should help move the premium up in this call.
AAPL reached a 3 month high of around $613 prior to earnings release. With no new macro issues, it should move through that tomorrow. If the current world picture holds together, it AAPL should work to test the spring (and all time) high of $644 as we head towards the iPhone 5 launch.
I’m still holding $675, $690, $760, $775 & $800 September calls. The $760′s and above were purchased pre-earnings, but I’m not giving up on them just yet. I was mostly out of AAPL from April through May. I moved back into it around June and, at this moment, I feel like I’ve hit the timing pretty good. The momentum has switched to AAPL’s favor. I’m glad to be on this freight train as it picks up speed, not running behind it try to catch up.