Monday, March 15, 2010

BAGAKOAA; March 15, 2010 Time to take a bite?


March 15, 2010 Time to take a bite?

OK I suggested you keep an eye on your stops and that still holds true. That will be tomorrow when we hear from the Fed. I wanted to go over a few more earnings call for Tuesday and Wednesday. But first, a word from our sponsors.

We’ll I don’t realty have sponsors. I don’t have subscribers either. So I am not really sure why I said that. And I don’t know why I am not going back to erase it. But I digress

Today AAPL got hit for 2%. I do not understand this as all rumors about the pre-sales for iPAD are very promising. In fact the rumor number for iPad sales in their first weekend is 150,000 units. That is a higher number than when they launched the iPhone. 150 thousand works out to about 100 million in sales. My point is that this could be last time you get into AAPL below the 225 mark for a while. Another rumor is that there have been more than 40,000 apps built for the iPad in the last 8 weeks. In researching possible purchase of additional shares, there was a quote from a Piper Jaffary Analyst who disclosed information from a research paper from NDP inc. that Mac and iPod shipments are much higher than expected. This could make for a very exciting 1st quarter report from AAPL in a couple of weeks. Anyway if you think you missed the Apple cart, think again. 12 to 18 month target prices are in the 280-300 range.

Now before we get to earnings how did I do on the Empire State survey prognostication. The guess was flat and I suggested we’d see a bump. We’ll we got a bump. It was less than a point and obviously not enough to excite the market, but more importantly I was right.

Now let’s look at the two earnings calls I guessed at. Apparently I goofed or Baron’s goofed and WSM does not report until the 22nd. I still like the 75 vs 73 cents a share.

And I guessed a nickel in earnings compared to eight cents for COMS 3COM, but we won’t know till Wednesday.

Ok who else is reporting earnings this week and how will they fair. The two assumptions I make here is no interest increase tomorrow and no surprised from China.

Here is a little sleeper you might want to do homework on. RUE Rue 21 is a small retailer that is getting some good press. It has a manageable amount of debt and a great return on equity. IBD (Investors Business Daily has it as a top rated equity.) I do not own it but have put it on a watch list. They are hoping for 30 cents a share. I am thinking 37 or better. This is a 40 dollar stock by years end.

OK another one to watch is FDS Fact Research Systems. They provide financial and economic information to institutional traders. This is a promising stock with a great balance sheet and a great Return on Equity. It has legs to 80 a share in 12 months. At 71 a share the PE ratio is a little rich at 21. look for better than expected earnings tomorrow to bring that PE down to 16-18 which would mean an earnings number of 80 cents versus the 73 cents currently being suggested.

Also look at Discover Financial DFS to post better than the 9 cents being suggested. This of course is the discover Card people. Remember what I mentioned last weekend, people are spending again and paying down their credit card debt. I am thinking 14 cents a share.

Remember to do your homework and watch your stops.

Salve Lurcum


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