This week's Apple trading strategies (5/2-5/6/22)

A place for Apple traders and investors to share their best ideas.

To get things rolling, here's Mad Money's Jim Cramer reporting on his conversation with Tim Cook just before the March numbers came out:

Below: Apple vs. the S&P 500 last week, normalized…

apple trading strategies 5-2-22
Disclosure: Although I am now an Apple shareholder (see Why I bought a share of Apple, my first), I am in no position to give trading advice. Don’t blame me if you drain your IRA doing something you read about here.

See also last week’s trading strategies.

8 Comments

  1. Fred Stein said:
    Wow. I heard every word from Cramer…. and worth it.

    And, $4 to $8 B means nothing. Every penny comes back in the next Q.

    3
    May 1, 2022
    • Robert Paul Leitao said:
      Fred: If I recall correctly, during the conference call and in response to a question, Tim believes some of the $4 billion to $8 billion may not be recovered. That’s unfortunate in the short-term. The lack of clarity on when conditions will change for the better is what I’m concerned about. This is a fluid situation and I’m hopeful conditions will improve quickly but management did need to disclose the immediate challenge. For an enterprise that last fiscal year generated, on average, $1 billion a day in revenue, 91-day periods pass into history quite quickly.

      0
      May 1, 2022
  2. Greg Lippert said:
    Sell these shares at this low price at your own peril.

    Here Cramer is right (and I doing often say that).

    1
    May 1, 2022
  3. John Konopka said:
    That’s awesome that he got 15 minutes with Tim and Luca before the session.

    #jealous

    Philip, why not invite Tim Cook for one of our Saturday zoom calls? (LOL)

    0
    May 1, 2022
  4. Robert Paul Leitao said:
    There’s no question Apple had a great quarter. If it weren’t for the lack of clarity on the June quarter, I would have expected price target revisions to the upside. In general, I believe results were received positively by analysts. It usually takes about three weeks for quarterly results to be worked into the share price. Although Apple had an impressive quarter, I’m not seeing a catalyst to singularly move Apple higher against a currently strong downward trend in the broad market. I’m hopeful Apple will be active with buybacks this week. By my calculations, there was about $15 billion available at the start of the quarter from last year’s repurchase authorization and the new $90 billion repurchase authorization is available to be deployed. Setting aside about $5 billion for net share settlements over the next 12 months leaves about $100 billion available for open market purchases and ASRs. I’m hopeful Apple deploys at least $25 billion for repurchases during the June quarter. I certainly wouldn’t mind $30 billion deployed this quarter due to challenging market conditions. In the March quarter, $22.93 billion was deployed for share repurchases and net share settlements. Of that amount, $22.90 billion was deployed for open market share purchases. In the March quarter, Apple’s net cash balance was reduced by $7 billion and the quarter-ending balance was $73 billion. There’s nothing to stop Apple from being aggressive on repurchases this quarter. Ample cash is available for use.

    2
    May 1, 2022
  5. Robert Paul Leitao said:
    Last week Intel’s CEO cautioned the chip shortage could continue into 2024. If I understand correctly Tim’s comments, much of the chip shortage Apple faces is on legacy nodes. There’s no doubting Apple’s supply chain prowess. It’s actually a tangible competitive advantage. Apple’s ability to secure its most advanced chips for its products as well as the company’s ability to procure all of the chips it needs in a more timely way than most competitors should put the current supply constraints in the context of the industry. Under the circumstances, Apple is performing well in a definitely supply constrained environment.

    0
    May 1, 2022

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