Author Archives: Scalper1

Why You Should Closely Watch Apple’s Stock Chart

Loading the player… Apple ( AAPL ) shares tried to make a pivotal move in the stock market today with the recapturing of a key technical level. Credit Suisse raised its price target on Apple from 140 to 150, saying that gross profit from Apple services — including Apple Pay, Apple Music and iCloud — has big growth potential. Meanwhile, Brean Capital cut its price target from 170 to 155. The analyst said that the Street’s iPhone unit shipment expectations for the March and June quarters may be too optimistic. Shares jumped as much as 1.9% in heavy volume Monday morning, breaking past resistance at the 110 price level and retaking the critical 200-day moving average in intraday trade. Apple hasn’t traded above the 200-day since five months ago, and even then it stayed above the line only briefly. Shares pared their gains to close up 1% at 111.12, pennies below their 200-day line at 111.32. If the stock can close above the 200-day line, it would be bullish. The stock has suffered severe technical damage over the last year, but it’s up more than 20% from its January low. Apple is now 16% below its all-time high of 134.54, reached at the end of last April. Among other widely held tech stocks, Microsoft ( MSFT ) is trading about 2% below its late December high and a consolidation base buy point of 56.95. Microsoft shares were down 0.5% in intraday trade. Facebook ( FB ) fell 3% in big volume on a cautious report from Deutsche Bank. Facebook is now trading about 4% below its February high and a buy point at 117.69. Google owner Alphabet ( GOOGL ) is trading 6% below a cup-base buy point of 810.45. Alphabet lost 0.6% Monday. And Netflix ( NFLX ) is hitting resistance at its 200-day line for a second session. The stock is 21% below its December peak. Netflix shares fell 1.3% Monday.

Apple Earnings Quality Better Due To GAAP-Only Reporting, Says UBS

Apple ( AAPL ), IBM, and Cisco Systems ( CSCO ) have higher earnings quality than some 3D printer makers, based on their GAAP vs. non-GAAP accounting, says UBS. Tech companies, and some others, typically report both non-GAAP  earnings — which exclude stock options grants to employees and often other items — and earnings under GAAP (generally accepted accounted principles), which include everything. Financial analysts typically provide non-GAAP estimates for quarterly results, and those numbers frequently get more play in quarterly earnings stories in the business press. “Non-tech investors sometimes recoil at the liberal non-GAAP reporting by tech companies and its acceptance by investors,” noted UBS analyst Steven Milunovich in the research report. Milunovich says a large difference between GAAP and non-GAAP earnings should be taken into account in assessing a stock’s price-to-earnings, or P/E, ratios. “Apple’s financial statements embody the same user-friendly nature as its products in only reporting GAAP numbers,” he wrote. Milunovich also said the GAAP to non-GAAP EPS difference for  IBM ( IBM ) is just “modest,” and is a “relatively conservative” 12% for Cisco. IBM is slated to report its Q1 earnings on April 18, and Apple on April 25. IBM stock fell 0.3% to 152.07 on the stock market today. Apple rose 1% to 111.12, closing just below Apple’s 200-day line after the stock topped that key level intraday for the first time in 2016. Milunovich is the second tech analyst in a week to take a close look at GAAP vs. non-GAAP earnings. Citigroup analyst Mark May last week slashed his price target on LinkedIn ( LNKD )  and also lowered its targets on shares of  Amazon.com ( AMZN ),  Alphabet ( GOOGL ),  Facebook ( FB ) and  Netflix ( NFLX ) in a report that examined the earnings dilution from stock compensation grants . Milunovich says restructuring charges also impact GAAP vs. non-GAAP accounting. The UBS analysts flagged the leading makers of 3D printers. He said that in 2015 “both Stratasys ( SSYS ) and 3D Systems ( DDD ) had large impairments, especially Stratasys’ write-off of MakerBot, creating the biggest gaps (in GAAP vs. non-GAAP accounting)” among the companies he looked at. Storage vendors including Nimble ( NMBL ), NetApp ( NTAP ) and EMC ( EMC ) also had relatively large differences in GAAP vs. non-GAAP earnings, he wrote.