Written by |

AAPL Range Analysis: Technicals and News Update 11.19.2012

[shareaholic app="share_buttons" id="24556347"]

The pullback, since hitting $700, has lasted 39 trading days, more than any other pullback of late. The length of time the bears have been in control is unusual by AAPL standards, but also the range is unusual. The average range of this pullback is $15.67. Traders on Friday saw a massive range. As indicated before, AAPL had a range (high to low) of $24.25 or 4.59%. This is outside 1.5 standard deviations of the mean. Meaning that 83.6% of the observations were below this. In addition to this, the volume on Friday was massive. 43 million shares traded hands. The last time AAPL traded that much volume was on 3/13/12’s ‘gap and go.’ While these are interesting quantitative observations, qualitative observations are important too in stock analysis.

Given the unusual nature of Friday’s action, a short-term bottom could have been built. Volume may indicate a ‘wash out’ and the price action could be confirming given the massive hanging man. The other side of this trade is clear however. AAPL has dominated for a long time now. They were formerly the underdog, but now they are the firm to beat.

A massive trend line connecting AAPL’s bottom to the flash crash low and finally touching the 6/20/11 bottom, sits only $50 away from Friday’s low. Given the $20 at the money weekly straddle, this is not out of the question in the short term if the market takes a dive.

In related news AAPL is expected to produce a slick flat screen LCD or LED HDTV by next year. Perhaps one can expect it to look similar to the new iMac given that skinny design.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

mark@keeneonthemarket.com

MarkAAPL

 

Written by |

ABT May Cure Your Portfolio (Part 2) 11.16.2012

[shareaholic app="share_buttons" id="24556347"]

ABT’s dividend has always been an important part of Abbott’s investment identity. According to management, ABT expects that the combined dividend of the 2 companies will be at least equal to Abbott’s pre-separation annual dividend. And they went on to say that AbbVie will be even more focused on shareholder returns in the form of dividends, paying a larger portion of the dividend.

With the former in mind, ABT announced that they expect AbbVie to pay an annual dividend of $1.60 per share, starting with a quarterly dividend to be paid in February. Management also announced that they expected the new Abbott dividend to be $0.56 per share. This new rate will be in line with its peer group and growth prospects. The combined annual dividend rate of $2.16 for the 2 companies exceeds the current annual dividend rate of $2.04. And this increase is expected to be implemented 1 quarter earlier than in past years…just another way this deal is benefitting shareholders.

Away from the fundamentals for a moment, the options market is implying a $4.00 move either way by Jan 2013; this expirations cycle is past the date of this corporate event, but it is till relevant. This will be an interesting stock to watch, not only because it has recently tested its 200 day moving average, but also because investors have clearly liked the idea of the firm splitting up. Shares are up over 20% since the announcement, but market risks like the fiscal cliff may present an opportunity to get into ABT on the cheap; if one is compelled to do so.  More to come on this story.

Screen shot 2012-11-16 at 8.14.19 AM

Part 1 here

http://www.keeneonthemarket.com/blog/1611-abt-may-cure-your-portfolio-part-1-11-14-12

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

mark@keeneonthemarket.com

Written by |

ABT May Cure Your Portfolio (Part 1) 11.14.12

[shareaholic app="share_buttons" id="24556347"]

ABT announced the idea to split the stock on October 18th, 2011. The company plans to be split by 12/31/12. The press release said the, “Two publicly traded companies will offer shareholders distinct opportunities given unique investment identities, business profiles and attributes” and “builds on a decade of strategic and operational advancements.”

One company will be the research-based pharmaceutical firm and will focus on select specialty products with breakthrough innovation that serve patient needs in some of the most critical medical areas, such as immunology, Multiple Sclerosis, chronic kidney disease, Hepatitis C, women’s health and oncology. This company will continue to generate the majority of its revenue from developed markets. The company’s sustainable portfolio and advancing pipeline, including established biologics expertise, have the potential to deliver accelerating revenue growth in the coming years.

Then the other firm, the diversified medical products company, will be one of the largest and fastest growing investment opportunities in medical products with strong sales and ongoing earnings-per-share growth and a large, broad mix of products addressing many essential areas of health care. It will generate nearly 40 percent of its sales in high-growth emerging markets, with further expansion expected in the coming years.

AbbVie will be the drug portfolio and pipeline company, while Abbott, with nutritional products and devices, will be the other firm. More to come with this story. 

Data from ABT IR

mark@keeneonthemarket.com