Apple closes at 9.3% above VWP 25 November, 2014 16:00 EST

US DAILY STOCK REPORT

Apple Inc. (NASDAQ:AAPL), NASDAQ's largest computer integrated systems company by market cap, decreased 86.50c (or 0.7%) to close at US$117.76, ending a three-day streak of rises. The price is at a premium of 9.3% to the 1-month volume weighted average price of US$107.70. In the past year the premium has been greater than 9.3% just seven times, suggesting a topish level and cautious buying at the current price. Compared with the NASDAQ-100 Index which rose 3.9 points (or 0.09%) in the day, this represented a relative price change of -0.8%.

BULLISH SIGNALS

Fundamentals:

+ Over the last 3 years average annual compound growth rate of earnings per share was 17.7%. This is considered moderate.

+ Net profit margin has averaged 23.2% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ The total dividend paid over the past 12 months is up 9.5% to US$1.85 per share, comprising four quarterly amounts.

+ As per the Du Pont analysis, Return on Equity is high at 35.4%. This is computed as net profit margin of 21.6% times asset turnover [sales/assets] of 0.79 times leverage factor [total assets/shareholders' equity] of 2.1. Also, this has improved from 30% last year.

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year35.421.60.792.1
Previous Year3021.50.831.7

+ Revenue growth is negative but improving in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit Margin
Jun 14-1820.7
Mar 14-20.422.4

+ Net Profit margin is positive and has seen consecutive rises in recent years. [Year ended, all figures in %]

YearNet Profit Margin
Sep 1421.6
Sep 1321.5

Undervaluation [compared with sector average]:

+ Dividend yield of 1.6% [0.9%].

Technicals:

+ The price increased 2.0% in the last week and soared 12.5% in the last month.

+ Compared with the NASDAQ-100 Index which rose 1.1% for the week and 6.1% for the month, this represented a relative price increase for Apple stock of 0.9% for the week and 6.4% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 114.44 minus the 26-day EMA of 110.68 is positive 3.76 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 14:8 or 1.8:1.

+ In the last three months the stock has hit a new 52-week high twenty-three times, pointing to a significant uptrend.

+ The present value of US$1,000 (PV$1000) invested one year ago in Apple is US$1,653, comprising a capital gain of US$619 and dividend reinvested of US$34.

PV$10001-week1-month1-year
AAPL.NASDAQ1,0201,1301,653
NASDAQ-100 Index1,0111,0611,261

High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverUS$7.1 billionIn Top 1%
Annual RevenueUS$182.8 billionIn Top 1%
MCapUS$690.6 billionIn Top 1%
Return on Equity [ROE] %35.4In Top 4%
Revenue Per EmployeeUS$2 millionIn Top 4%
Return on Assets [ROA] %17In Top 6%
Price/MAP2001.29In Top 8%
Price/MAP501.12In Top Quartile
Relative Strength (6M)89In Top Quartile
% Prem To Vol Wtd Price9.3In Top Quartile
Net Profit Margin %21.6In Top Quartile

BEARISH SIGNALS

Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 3. Compared with the rest of the market the stock is overvalued and ranks in the bottom quartile of stocks by value of Q Ratio.

Technicals:

+ The 1.7% discount to 12-month high of US$119.75 against the 69.8% premium to 12-month low of US$69.35 suggests the climb might be peaking.

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 84.8 has penetrated the overbought line of 70, suggesting the price gain of 8.3% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -16.7, suggesting the price is close to its 14-day high of US$119.75.

+ The Money Flow Index [MFI] is 83.4 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 5 suggests positive money flow was 5 times negative money flow.

+ The Stochastic indicator of 91.7 has broken through the overbought line of 80.

Open Interest:

DurationOpen Interest change %Price change %Interpretation
1 day0.5-0.7Weak Market

Put Call Trend1 Day1 Week1 MonthInterpretation
Put Call Ratio Change %17.327.858.8Downtrend

Top three traded Apple call options:

[volume of contracts in brackets- 1 contract is 100 shares]

+ Exercise US$118.0: Expires 28 Nov, 2014; US$1.29 up 134.5% [39686]

+ Exercise US$117.0: Expires 28 Nov, 2014; US$1.99 up 126.1% [35934]

+ Exercise US$120.0: Expires 28 Nov, 2014; 39.0c up 95.0% [34996]

Low Performance Indicators:

DescriptionValueRank In Market
P/E * P/NTA117.47In Bottom Quartile
Price to Book Value6.7In Bottom Quartile

NOTE

Technicals:

+ Beta: the Beta of Apple stock is 0.9. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

Fundamentals:

Parity [compared with sector average]:

+ Price/Earnings of 17.5 [17.6].

+ Price/Sales of 3.8 [3.8]. We estimate Apple stock is trading at a current year Price/Sales of 3.5 and a forward year Price/Sales of 3.2.

+ Price to Book of 6.7 [6.7].

+ Return on Equity 35.4% [34.7%].

+ Return on Assets 17% [16.8%].

Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Frankfurt: APC.FRA 140,390 [VI of 3.2] volume 0.23% of aggregate. Price: EUR94.70.

+ Nasdaq: AAPL.NASDAQ 59,947,994 [VI of 1.0] volume 99.77% of aggregate. Price: US$117.76.

+ Aggregate volume: there were 60.1 million shares of Apple worth US$7.1 billion traded. The aggregate volume equalled average trading of 59 million shares.

Financials:

Annual Report for the year ended September 27, 2014 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 6.7% to $US39.5b.

+ EPS up 13.6% to $US6.45.

Unfavourable Changes:

+ Although the Total Liabilities to Operating Cash Flow ratio of 2.0 compares favourably with the Joseph Piotroski benchmark of <4, it had deteriorated by 28.8% from the previous year.

+ Total liabilities to Total assets up 30.0% to 0.5.

+ Current ratio down 35.7% to 1.1.

+ Net tangible assets per share down 86.8% to $US16.79.

+ Working capital to total assets down 84.7% to 2.2%.

+ Retained earnings to total assets down 25.4% to 37.6%.

+ Total revenue to total assets down 5.1% to 0.8.

Major Common Size Ratios:

+ Long term investments to Total Assets up from 51.3% to 56.1%.

+ Total current assets to Total Assets down from 35.4% to 29.6%.

+ Fixed Assets to Total Assets up from 8.0% to 8.9%.

+ Current Debtors to Total Assets up from 6.3% to 7.5%.

+ Cost of Goods Sold to Sales down from 62.0% to 61.4%.

+ Profit before tax to Sales up from 29.1% to 29.3%.

+ Profit after tax to Sales up from 21.5% to 21.6%.

+ Tax expenses to Sales down from 7.6% to 7.6%.

+ Sales and marketing expenses to Sales up from 6.3% to 6.6%.

Analyst Recommendations: Past Fortnight

DateBrokerageActionCurrent RatingPrev TargetPrice Target
24-Nov-2014SusquehannaBoost Price TargetPositive120135
20-Nov-2014Evercore ISIBoost Price TargetBuy125135
20-Nov-2014Piper JaffrayBoost Price TargetOverweight120135
19-Nov-2014Jefferies GroupBoost Price TargetHold112120
19-Nov-2014Morgan StanleyBoost Price TargetOverweight115126

Activities:

Apple Inc.designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers.

Ranking:

It is placed 153/2226 in BSS News Bites's ranking of NASDAQ performers in the past year, a percentile ranking of 92%.

Apple is the 14th largest by revenue in the FT Global 500.

FT ValueFT Rank
SalesUS$170.9 billion14
Net incomeUS$37 billion2
AssetsUS$207 billion107
MCapUS$690.6 billion1

It is also in the Forbes 2000 ranking 5th largest by net profit, 14th largest by revenue and 129th by assets.

It is the 28th largest by revenue and largest by MCap among the PwC Global Software Leaders.

+ Easy, one-click access to comprehensive trading information, company background data, the latest regulatory and corporate announcements, Stock Buzz and much more on Apple can all be reached from its Portal Page

ISIN: US0378331005

O:AAPL; AAPL.OQ

Source: www.BuySellSignals.com