This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Going by ad campaigns alone, you would think that every person -- or, at least every cool person -- had abandoned their Windows PCs and hoisted themselves onto the Macintosh bandwagon. Not so. The truth is that PCs far outnumber Macs in the market. The big-business worlds of finance, law, medicine use predominantly PC, while the areas of video production, web design and art use Mac. These computers do most of the same things (play games and DVDs, word-process, create web pages, store and play music) but they are completely different operating systems. Even though Apple computers now include the Intel processor that makes it possible to use Windows-only applications, it can still be hard to compare products.
But what about the companies themselves? What does the Apple brand signify that the Dell brand does not? And vice versa.
Apple (NASDAQ: AAPL): Providing innovative products and a user-friendly interface, Apple has turned the whole computer thing into a fashion accessory. For someone who used Dell products for years and then switched to Mac, the difference is like night and day. A Mac is so easy to use. With a clean interface, a near-universal compatibility with external products and tools, these computers are a beautiful breeze. And now that Macs include Intel processors, one can switch back and forth between a Windows interface and a Mac interface, making previous incompatibilities (software, games, etc.) now perfectly compatible. And when it comes to customer service (see below) Apple really socks the house.
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's slideshow of his seven picks).
Taking advantage of the experience he gained over the past 30 years, BusinessWeek's Gene Marcial shares his opinions related to investors' strategy to use market meltdowns for their own benefit, being able to turn the stock market panic into success.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
"I'm like Ma Bell, I got the ill communication." -- Beastie Boys
When considering these two particular companies, it is important to note their roots as offspring of the famous "Ma Bell" network. The Bell System, which has produced the most complex ongoing series of mergers and break-ups in the history of the United States, is the origin of the companies that are now AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), as well as competitor Qwest Communications International (NYSE: Q). A lot has changed since those early times -- remember, after all, that the second "T" in AT&T stood for Telegraph. Now phones are the latest devices to be made supercomputers. AT&T has its exclusive deal with the Apple Inc. (NASDAQ: AAPL) iPhone, while Verizon slings the Research in Motion Ltd. (NASDAQ: RIMM) BlackBerry.
Since wireless is the way of the future, the wireless divisions of these companies is the most hotly contested, and the focus of this "Battle of the Brands." It is important to note that despite Verizon Wireless bearing solely Verizon's name, it is not owned by just them, it is a 55%-45% joint venture between Verizon and Vodafone Group (NYSE: VOD). It is also important to note that AT&T Mobility is the service formerly known as Cingular, which was acquired by AT&T in 2006 when it bought BellSouth for $86B.
Apple Inc. (NASDAQ: AAPL) shares are trading higher today as rumors swirled that partner AT&T (NYSE: T) will offer Apple's 3G, or next generation, iPhone for only $200, much cheaper than the retail cost of these phones. This discount would go straight onto Apple's bottom-line from the pockets of AT&T, who is hoping that these cheaper prices will lure more subscribers to their network. AAPL is also getting support from a Commerce Department report that GDP grew by 0.6 percent in the first quarter, ahead of the 0.5 percent growth expected by economists. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on AAPL.
After hitting a one-year low of $98.55 in May, the stock hit a one-year high of $202.96 in December. AAPL opened this morning at $176.19. So far today the stock has hit a low of $175.80 and a high of $180.00. As of 12:40, AAPL is trading at $177.45 up $2.40 (1.4%). The chart for AAPL looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $140 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.3% return in just seven weeks as long as AAPL is above $140 at June expiration. Apple would have to fall by more than 21% before we would start to lose money. Learn more about this type of trade here.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Research in Motion Ltd.'s (NASDAQ: RIMM) BlackBerry wireless email device has been a staple of the corporate world for years now. RIM, a Canadian company, took the function everyone wanted -- easy and superb access to mobile email -- and turned that single function into an entire industry. Of course, RIM's wireless units now handle voice calls, pictures, document editing and more, but that's not what customers buy BlackBerries for. The single function of secure, instant and mobile email is still the killer application for the BlackBerry.
Enter Apple Inc. (NASDAQ: AAPL) and its uber-popular iPhone that's been on sale for coming up on a year now. The company has sold way over 4 million of the devices since then and has taken a large swipe at the "smartphone" wireless handset category where the iPhone competes. Reminder: the unit has not even been on the market for a year. Apple has selectively released upgrades to the iPhone to make it more competitive in the business customer arena, and with the possibility of the iPhone being able to handle corporate push email, it may become an even bigger threat to RIM in the very near future.
TheStreet.com's Jim Cramer says they can't be profitable with this huge cost – it's time to move on.
Here's a revelation. The airline industry is disappearing right before our eyes. And it doesn't even matter. They can merge all they want, they can try to cut costs through synergy, but the business can't survive $120 oil. The variable cost is 35% of their expense. That's not tenable and it is going higher. Fares have to double to make it up. That's just not tenable. The Dreamliner's a nice savings, but this American industry won't get there in time to be saved by it.
Last week we saw the big give-up, the departure of even the longest-term investors. The stocks are signaling that most of them will have to restructure through bankruptcy. They have done it before, but this time it doesn't matter. The fare increases have to occur, and they are such that the airline structures can't be profitable. It is one of those industries that can't stay afloat without massive federal subsidies, and that can't happen.
I have hated the airline stocks ever since 1985 when I recommended Delta (NYSE: DAL) (Cramer's Take) and my clients promptly dropped 50%. I reiterate that after the tremendous declines these stocks have, they are still worth avoiding. Don't be tempted to pick up these stocks if oil "swoons" down to $115. The airlines will rally, but they will need to do every bit of financing possible if a rally occurs.
In the stock market, there are the indexes of consequence.
Certainly, the closely-watched Dow Jones Industrial Average is perhaps the world's best-known stock market index, as it serves as an indicator of both U.S. economic conditions, and the nation's economic prospects, 6-9 months ahead.
For those who are advocates of technical analysis, including yours truly, the DJIA's 50-day moving average and 200-day moving average, also are important, among other technical measures.
Analysts had been expecting the company to report earnings of $1.07 a share, and the company actually reported earnings of $1.16 for its most recent quarter. Sales came in way above estimates as well, with a reported $7.51 billion, exceeding the $6.964 billion analysts had been looking for.
Today's report should help wipe any concerns that the current economic slowdown in America is negatively affecting the company's business.
Apple (NASDAQ: AAPL) ... the name is synonymous with high-tech and high touch. It has surely been on a roll ... no need for me to tell you that. Tonight, is the real deal, the make it or break it. The question of whether the economic slowdown is going to have any real effect on Mac, iPhone and/or iPod sales.
The word is that iPod sales have been declining because of the continuing increase in iPhone sale. Why would anyone want a traditional iPod if they can have it all with the iPhone or iTouch anyway? This is no news to anyone that follows Apple. So, what do you say we discount that conversation entirely.
Macbook sales have been on fire. The latest update to this line has sent PC laptops to the junkyard as potential buyers who were on the fence have gladly jumped over, head first. (Disclosure: I am a happy jumper!) To the delight of most users, the most concerning aspect of the transition was painless. The fear of not having a Windows machine was put to rest as companies like VMWare (NYSE: VMW) provided virtualization programs that allowed for a seamless experience within a dual operating environment.
The biggest surprise that occurred was that Mac OSX was quick to learn and many never actually used the Windows crutch past the first few weeks. That was bad news for VMWare and other companies in the virtualization business. ( See VMWare: A WallStreet Chainsaw Massacre) . But what is in store for Apple over the next few quarters?
Tech superstar Apple Inc. (NASDAQ: AAPL) is going to be joining the earnings parade tomorrow afternoon when it reports is fiscal second quarter numbers following the market close.
The last time Apple reported earnings was back on January 22, when it reported its fiscal first quarter numbers. The company blew away analyst estimates by posting earnings of $1.76 a share, well above the $1.62 that Wall Street had been expecting to see. This led to a huge jump in Apple stock, right? Wrong. Instead, the company's stock went into a tail spin, falling over 40 points, and erasing around $36.5 billion from the company's market cap.
After the collapse, the stock did rebound nicely, and is once again trading above the $160 mark, so it will be interesting to see just how the market reacts to the company's numbers this time around.
MOST NOTEWORTHY: Garmin, Thomson Reuters and Heritage-Crystal Clean were today's noteworthy initiations:
Garmin (NASDAQ: GRMN) was initiated with a Neutral rating at JP Morgan. The firm sees risk to 2008 Street estimates given the consumer slowdown in the U.S. and potential ASP and margin pressure as channel inventory is worked down.
Morgan Stanley assumed Thomson Reuters (NASDAQ: TRIN) with an Underweight rating and expects revenue growth in the company's financial business to slow sharply into 2009.
William Blair believes Heritage-Crystal Clean (NASDAQ: HCCI) has the opportunity to gain market share over the next several years as a result of its differentiated parts-cleaning programs, strong sales organization, and experienced management team. Shares were assumed with an Outperform rating.
OTHER INITIATIONS:
Lehman initiated Dell (NASDAQ: DELL) and Sun Microsystems (NASDAQ: JAVA) with Equal Weight ratings and targets of $20 and $17 and Apple (NASDAQ: AAPL), IBM Corp (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ) with Overweight ratings and targets of $195, $144 and $59, respectively.
Pacific Growth started Spectranetics (NASDAQ: SPNC) with a Neutral rating.
Merrill reinstated Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM) and Hess Corp (NYSE: HES) with Buy ratings and price targets of $110, $105 and $125, respectively.
For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
These first six companies are expected by analysts surveyed by Thomson Financial to post growth in profits in the most recent quarter, compared to the same period of last year:
Apple, Inc. (NASDAQ: AAPL) has really never been down for the count as a company, although it's been on hiatus a couple of times in its 30 plus year history. Never before has the company seen such product and financial success, though, than in the 2001-current period. Under current CEO and co-founder Steve Jobs, the company is a force in the entertainment business along with ramping up its fortunes in the PC business where it started. We won't even mention the hardware business (iPod, iPhone).
But the one elusive crown that Jobs would probably love to see shift to his company is the operating system used by PC customers. Now that current Macintosh computers can run Microsoft Corp.'s (NASDAQ: MSFT) Windows Vista (or XP) operating system, is Jobs slyly trying to wrestle the operating system of choice crown from his longtime competitor? After all, a Macintosh customer can switch between a full Mac OS (operating system) on his or her PC and Microsoft's Windows with a keyboard press. Use one OS for work-related things and another for -- everything else. Guess which is which? And don't think that's just what Jobs envisions when he's made every single Mac computer being sold capable of running Microsoft's Windows. Perhaps he's trying to win a long war with Microsoft on the basis of Apple's cooler-than-cool hardware rather than software?
With all of the write-offs it has taken in the past and all those it is likely to take in the future, the market rubbed more salt in the wounds of Citigroup (NYSE: C). Apple (NASDAQ: AAPL), maker of the iPod, has passed Citi in market cap.
While the Apple number may be impressive, the Citi figure shows that the bank and its peers are viewed as the equivalent of equity "junk bonds," risked investments for those intrepid enough to go into dark waters.
Who knows, by the end of quarter, if Apple does well in earnings, it may have doubled Citi's market value.
Douglas A. McIntyre is an editor at 247wallst.com.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's 
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This post is part of our 
Here are some highlights from this past week's 
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For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
How Washington can cut gas prices fast -- and why it won't
Oil prices and Fed policy: A solution is not as easy as it seems!
Cramer on BloggingStocks: AIG's foolishness puts cataclysm back on the table
