Tuesday, April 22, 2014

Apples to Apples - even when it's NOT

As Apple pulls into another earnings report after the bell Wednesday, we thought we would update our momentum comparative that has painted the inflections and trajectory on the tech behemoth quite closely over the past 16 months. 
  • While Apple's performance this year has not surprisingly consolidated the strong upside reversal witnessed in 2013, the momentum going into earnings is still presenting an upside bias for the stock. 
  • As one of the only individual equity names that we cover closely and carry, we continue to like the position. With a return of almost 40% over the past year, the value potential in Apple has both outperformed the broader indexes (SPX~20% & Nasdaq~29%) and its closest tech contemporaries - even Google (~35%) and Amazon (~27%).
  • Considering our expectations that risk aversions and volatility are poised to rise in the equity markets through the balance of the year, we appreciate Apple's 20 month rolling correlation of only +.13 with the Nasdaq and +0.03 with the SPX.    

For further reading on this concept - see some of our previous Apple notes:

Apple Cider
Reboot Complete
Apple Reboots 
Apple Picking
Fruit Salad
Apple Turnover
The Universal Law of Gravitation