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During their 3Q earnings call Apple announced a product transition that competitors will not be able to match. It's anyone's guess as to what they will come up with next. I'm guessing they will release a multi touch MacBook (see link below). It makes sense since this is an expensive piece of equipment to produce and will likely contribute to the expected margin contraction if priced competetively.

http://gizmodo.com/5027706/rumor-macbook-touch-coming-in-october

Any other thoughts?

Over the past 13 quarters Apple has beaten it's own earnings guidance as well as analyst estimates. Analyst estimates have also always exceeded Apple guidance.

For anyone interested I've put together a chart that summarizes the relationship between guidance, estimates and actual results.

The moral of the story is not to freak out about conservative Apple guidance. Actual EPS has beaten guidance and analyst estimates by an average of 35% and 18% over the past 13 quarters!

The large drop in Apple after earnings may be a blessing in disguise... A lot od shares changed hands and those who picked up the stock on the low should be in for the long run. Also anyone who shorted while Apple was falling is now scrambling to cover their shares. I expect a nice run up in the short term.

This is in relation to my earlier post on LTM.

LTM started the day off down over 5% and down over 30% since June 6th, despite essentially no company specific news. The 5% drop today came before the market tanked over 1%. It then steadily climbed into positive territory on 2.5x average volume. The climb continued even as the market declined, possibly signaling a short squeeze as over 50% of LTM shares are sold short.

I'm expecting the uptrend to continue for a while, since it will take quite a bit of buying, even on 2.5x average volume, to cover all those shorted shares.

On another note, LTM looks very attractive fundamentally.

LTM continues to be extremely battered on no company specific news. Traders are shorting it left and right with the short float over 50% now. Any slightly positive news should start a serious short squeeze. At a 15x PE, this stock is a bargain.

Good times might be ahead for recently battered refiners - insiders are buying the most shares since 2000. Also prominent hedge funds / asset managers are picking up shares.

I'm staying away from this sector since I have no clue where oil prices / crack spreads are heading, but it will be interesting to see how it plays out. I hope they go up since that means I will likely at least benefit at the pump.

Read the following for more details:

http://www.bloomberg.com/apps/news?pid=20601213&sid=aC42xa9nwu5A&refer=home 

Any thoughts?

"Nicole M. Parent said in a client note that Emerson, which offers electrical products and services, remains one of the best managed companies in her coverage group. But shares of the St. Louis company trade at higher-than-normal premium to similar large-cap peers, such as General Electric Co., Honeywell International Inc. and 3M Co.

This gap is likely due to investor aversion to companies with financial exposure -- such as GE -- or aerospace exposure -- such as Honeywell, Parent said. But it will probably narrow in the near term.

Parent downgraded the stock from "Outperform." She cut her price target to $56 from $60, implying she expects shares to gain 4 percent over Monday's close of $53.63."

 What she failed to mention / observe:

- Honeywell, 3M and GE are substantially different businesses than EMR. It's unfair to group them together just because they are large cap industrial conglomerates. The analyst should have taken the time to notice besides aerospce, Honeywell is also skewed towards petrochemicals and refining as well as transportation. Only the Automation and Control Solutions segment is relevant to EMR. 3M is not even close in it's operations to EMR and GE besides its financial exposure also operates in media and even its industrial operations are largely different than EMR's

- At 20%, EMR has experienced the best 3-Yr cumulative EPS growth rate of the group, aside from Honeywell (30%), which benefited from its exposure to energy and defense. GE is at 10% and 3M is at 16%

- EMR has consistently improved its operating margins, which not stand at 14%. Granted GE has better margins at 16%, but they have not demostrated any improvement. Honeywell has improved its margins, but they are only 10%. 3M actually really stands out as it has improved its margins and they are at a whopping 25%.

- From an ROE perspective EMR matches Honeywell at 25%, beats GE (19%) and trails 3M (35%)

- It's quite a stretch to say EMR trades at a premium anyways. EMR's forward PE is 16.5x. GE is 15.2x, HON is 17.8x, and MMM is 16.8x. Only on a trailing basis is EMR at a premium. Also, GE's, HON's and MMM's forward PE's are higher than traling PE's singnaling an expected contraction in EPS.

- Again, a lot of these comparisons are not fair to begin with as the business mixes of these companies are different. Another example of thoughtless analyst notes that send a good stock down... the market would be better without analysts.

LTM has fallen from $40 at the beginning of June to under $32 on essentially no news. This company has demonstrated consistent EPS growth of well over 20% over the past 5 years and is currently trading at a bargain PE of 17x. Operating margins have declined only ~1% from 31.5% to 30.5%; however, net income margins have improved as interest expenses have declined as a % of sales.

Also, as their most recent quarterly report shows, it doesn't look like people are cutting back on their gym memberships.  

06/16/08:

This time Covestor is showing 1.7%, actual return was 2.6%... that's 1.4% off in two days now... This bug needs to be made a priority and addressed quickly!

Blain, this cannot just be due to the day trading for profit bug you described in my previous post. I only made 0.2% on day trading yesterday.

06/17/08:

Covestor: 0.38%

Actual: 0.5%

06/18/08: This one is way off the other way...

Covestor: (0.9%)

Actual: (2.2%)

06/19/08: I didn't even make a single trade today and the returns still don't match up

Covestor: 1.5%

Actual: 2.1%

Absolute Value of Cumulative Error (5 days): 3.42%

Making the site work properly should be a greater priority than making it look pretty!

Has anyone noticed errors with how their returns are being calculated? This Friday, my portfolio was up over 2.2%, yet Covestor is showing  only 1.7%. This may have something to do with the fact that 20% of my account is on margin and I also made 3 margin day trades on Friday.  Has anyone  experienced a similar problem?

on absolutely no news and at most average volume... 20% in 2 days. i'm not too worried about long term prospects, but this short term decline is mind boggling. anyone have any insight?

Update: the waiver of the credit agreement issued yesterday shouldn't in my opinion drive the stock down this much - it essentially extends the deadline to sign an amendment to an existing credit agreement, though it will cost APP 75k + some legal fees.