Let’s just call it a seller’s strike.  You can’t find anyone selling Apple.  In the ten trading sessions since earnings, the days with gains have been on seven of the ten days but the days with losses have been only negligible.

Apple jumped to $446.66 after earnings, up from $420.41 at the close on the day of its earnings.  Now shares have closed up 1% at $468.83 for a new all-time high closing price and Apple’s market cap is now at a staggering $437 billion.

And to think… Apple is trading at only 11-times the implied 2012 earnings estimates.  By now it has more than $100 billion in cash on the books.  One day this run will end, but who knows when…  James Altucher gave a $1,000 Apple call last night on CNBC.  The consensus target is now $562.96 and some analysts see $650 as a target.

This stock is now much larger than Exxon Mobil Corporation (NYSE: XOM) and about its only care about Microsoft Corporation (NASDAQ: MSFT) is now just remembering that there is supposed to be a rivalry.

JON C. OGG

More important is the note on a dividend by Canaccord: “We anticipate another year of record cash generation. With Apple expected to cross $100B in cash during the March quarter, we believe this milestone might push Apple to announce a dividend.”

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Another even larger analyst target upgrade was over at Morgan Keegan.  That firm took a $513 price target all the way up to $650 as well. We have seen a new $515 price target from Morgan Stanley as well.  Citigroup took its price target to $600 from $500…

Before the earnings report we had a consensus price target of almost $515 and that is now going to be much higher after this week.  The current figure shows a consensus above $516 but that is because so many of the fresh target price upgrades remain undercounted.

JON C. OGG

The gross margin was 44.7% compared to 38.5% a year earlier. International sales accounted for 58% of the quarter’s revenue.
 
Apple’s guidance is generally taken as sand-bagged guidance so it can over-deliver, but the guidance is much better this time.  The company now sees earnings of $8.50 EPS and $32.5 billion in sales.  Thomson Reuters had estimates of $8.03 EPS on $32.04 billion in sales, indicating what would be 25% earnings growth and almost 30% sales growth to the consensus estimates.

The highlights:

• sold 37.04 million iPhones in the quarter, up 128%
• sold 15.43 million iPads in the quarter, up 111%
• sold 5.2 million Macs in the quarter, up 26%
• sold 15.4 million iPods, a decline of 21% because everyone already has one

If you include the long-term marketable securities of $67.44 billion with the $10.3 billion in cash and the $19.85 billion in short-term securities, Apple has more than $97 billion in cash and total liquidity on hand. 

Shares closed down 1.6% at $420.41 and the 52-week range is $310.50 to $431.37.  The stock has also rallied from alow of about $365 around the end of November for a 16% gain since that time.

Before the effects of the downgrades and upgrades and before seeing any new changes, the current consensus price target objective is roughly $515.00.  If Apple only meets its $35.39 consensus earnings estimate for Fiscal 2012 (September-end) then this stock trades just under 12-times expected earnings before considering the bump from today’s earnings report.

UPDATE: Apple shares resumed at 4:50 PM EST and at 5:00 PM EST the stock is up almost 8% around $454.00 in very active trading.

JON C. OGG

Thomson Reuters has estimates of $10.08 EPS on $38.85 billion in revenues (56% earnings growth and 45% sales growth).  Apple often offers guidance and the coming quarter is expected to be $8.03 EPS on $32.04 billion in sales (25% earnings growth and almost 30% sales growth).  Keep in mind that Apple is often conservative on its guidance.

Stern Agee has raised estimates ahead of the report but it should b noted that as recently as Monday the WhisperNumber.com report showed that Apple’s earnings estimates had been showing a whisper trend down to $9.99 EPS from $10.01 EPS earlier.  The whisper numbers are less official but are trader-biased.

A few things to consider.  Apple is on the way to having $100 billion in cash on hand.  Last quarter’s earnings report was the first substantial miss in about five years.  This is the first full quarter without Steve Jobs.  Apple is a company which some investors would like to see either a dividend or some use of this cash arsenal now that Steve Jobs is not in charge.  This is also the first report that includes the full sell-thru of the iPhone 4S.

Shares are still around $424.00 per share and the 52-week range is $310.50 to $431.37 with a consensus price target from Thomson Reuters of $514.98.  If Apple only meets its $35.39 consensus earnings estimate for Fiscal 2012 (September-end) then this stock trades just under 12-times expected earnings.

If you use the monthly options rather than the weekly options, options traders appear to be braced for a move of up to about $16 in either direction.

As far as Apple’s chart, there is a lot going on here as you will see with the stockcharts.com chart below.  Apple recently hit all-time highs just last week and that implies a large breakout pattern.  The problem is that the high was hit and then it has stalled.  One could even argue that the chart is awaiting today’s news because shares are settling in right now just above what was resistance in September around $420 and then a firmer resistance around $425 in October.  The stock has also rallied from a low of about $365 around the end of November for a 16% gain since that time.

Some other issues to consider from fresh and recent articles:

• Motorola patent case narrowed
• Apple was a top brand of 2011
• Apple released its full supplier list
• Apple shares made it yet again on the Top Picks List for 2012 from analysts

JON C. OGG

Now we have further news coming from Xilinx, Inc. (NASDAQ: XLNX) that is adding to gains.  After shares were already up almost 6% at $35.30 on Wednesday, the stock is up almost 7% in the after-hours session at $37.85 and that will mark a new 52-week high if it holds up.   The company noted that while revenues fell 10% to $511.1 million on earnings of $0.47, the consensus target was only $498.3 million and $0.37 EPS.  Xilinx is offering guidance of 2% to 6% revenue growth.

There are some other secondary plays out there on this.  When investors trade up in Xilinx, they often trade up Altera Corporation (NASDAQ: ALTR).  When investors trade up in Linear Tech, they often trade up in Maxim Integrated Products, Inc. (NASDAQ: MXIM) as well.  All are higher in the after-hours session and Altera was up almost 10% at $40.72 and Maxim rose by 6.1% today to $27.56.

Get ready for Intel to report earnings on Thursday after the close (estimates are $0.61 EPS on $13.72 billion in sales).  If it reverses or lightens up on the severity of its revenue guidance offered in December, then going from $25.39 to above $25.92 would not hard to fathom.  Anything above that would mark a 52-week high and analysts have a consensus price target objective of $26.58.

It is important to keep in mind that in many cases these “higher guidance” calls are barely higher and it is off of declining sales.  Still, in the end investors want improvements and growth and sometimes mediocrity wins the day.  If these all hit new 52-week highs, the cheer will be simple enough: “Chips Ahoy!”

JON C. OGG

After the close on Tuesday came word that Bill Veghte has been appointed as the company’s Chief Strategy Officer.  It was noted, “In addition to his new responsibilities, Veghte will continue in his current role as executive vice president of HP Software.”  And later in the release it noted, “Veghte will lead HP’s cloud and webOS open source initiatives.”

EVP of HP Software as Strategy head… a former SAP head booted out… a giant Autonomy acquisition… naming Meg Whitman as CEO with internet experience… and keeping the PC unit because it would cost too much to get rid of.  Does anything here tell you that the future direction of HP is going backwards into more and more hardware?

HP noted that this further signals its “commitment to providing customers with the latest platforms, products and services needed for success in a rapidly changing world.”

As far as Veghte’s past, he joined HP in 2010 and was credited for helping to grow HP’s software business by 18% in the most recent year.  Before joining HP he spent ‘two decades’ at Microsoft Corporation (NASDAQ: MSFT) “in a variety of senior leadership positions” and it was noted that he managed the company’s $15 billion global Windows business and was called “instrumental in the delivery and launch of Windows 7.”

JON C. OGG

Many of Apple’s suppliers are well-known, but the list includes Advanced Micro Devices Inc. (NYSE: AMD), Cypress Semiconductor Corp. (NASDAQ: CY), Broadcom Corp. (NASDAQ: BRCM), Fairchild Semiconductor International Inc. (NYSE: FCS), Flextronics International Ltd. (NASDAQ: FLEX), Jabil Circuit Inc. (NYSE: JBL), Vishay Intertechnology Inc. (NYSE: VSH), TriQuint Semiconductor Inc. (NASDAQ: TQNT), SanDisk Corp. (NASDAQ: SNDK), ON Semiconductor Corp. (NASDAQ: ONNN), and Qualcomm Inc. (NASDAQ: QCOM).

The report is based on 229 audits, of which 14 were specialized environmental audits and 27 process safety audits. Apple found 6 current cases of suppliers hiring underage workers and 13 historical cases of child labor violations. About these violations, the company said:

In each case, the facility had insufficient controls to verify age or detect false documentation. We found no instances of intentional hiring of underage labor. We required the suppliers to support the young workers’ return to school and to improve their management systems—such as labor recruitment practices and age verification procedures—to prevent recurrences.

Chinese environmental groups last year charged that 27 of Apple’s suppliers were dumping toxic gases and heavy metal sludges into the country’s land and air. The company’s audits revealed that 112 supplier facilities were not properly storing, moving, or handling hazardous chemicals correctly; 69 facilities were illegally dumping or failing to recycle hazardous waste; and 52 facilities failed to label hazardous materials. Apple also reported that 58 facilities failed to monitor and control air emissions.

Apple had come under increasing pressure to name its suppliers and to hold them to a higher standard following suicide attempts by 18 workers and 14 deaths at China’s Foxconn facility in 2010.

Paul Ausick

Benchmark Electronics Inc. (NYSE: BHE), Celestica Inc. (NYSE: CLS), Flextronics (NASDAQ: FLEX), Jabil Circuit Inc. (NYSE: JBL), and Sanmina-SCI Corporation (NASDAQ: SANM) all hang in the balance.  Unfortunately, the consumer move to Apple Inc. (NASDAQ: AAPL) and Apple’s use of Foxconn is another wildcard (even with its suicide problems) because much of the business goes in that direction.  Still, upside remains in some of these names as most of these companies get business from multiple sectors outside of technology manufacturing.

We have looked at the current share price along with recent share performance.  Also considered is the fundamental trends behind each, as well as the consensus price target from Thomson Reuters and current and forward price/earnings analysis.

Benchmark Electronics Inc. (NYSE: BHE) trades around $15.00 and the 52-week range is $12.01 to $20.24.  With an $870 million market value, this one trades at 17-times expected earnings and 15-times expected 2012 earnings.  Thomson Reuters has a mean price target objective of $14.90, indicating implied upside is non-existent.

Celestica Inc. (NYSE: CLS) trades around $8.00 and the 52-week range is $6.79 to $12.48, it is worth about $1.7 billion market value, this one trades at under 8-times expected earnings and slightly further under 8-times expected 2012 earnings. Thomson Reuters has a mean price target objective of $9.88, indicating implied upside of about 23%.

Flextronics (NASDAQ: FLEX) trades around $6.00, its 52-week range is $5.05 to $8.50, and it has a market cap of $4.3 billion, and .  With an $870 million market value.  Flextronics trades at 7-times expected earnings and about 5.6-times expected 2012 earnings. Thomson Reuters has a mean price target of $8.00, indicating implied upside of about 33%.

Jabil Circuit Inc. (NYSE: JBL) trades around $21.40 and the 52-week range is $13.94 to $23.09, so it is the least punished of the whole EMS lot.  Jabil has a market value of about $4.4 billion.  Its fiscal year is not until August, so its expected earnings multiple today is about 8.3-times expected earnings. Thomson Reuters has a mean price target of $23.73, indicating implied upside of about 10%.

Sanmina-SCI Corporation (NASDAQ: SANM) has a price of about $9.75 and the market value is just under $800 million.  Its 52-week range is $6.01 to $17.32.  Its fiscal year ends in September and it trades at a mere 6.7-times expected earnings. Thomson Reuters has a mean price target objective of $10.88, indicating implied upside of about 11%.

The achilles heel for these companies and their valuation is that all are international today and none of the group mentioned offer dividends to reward shareholders during the economic lull. 

The good news is that these companies add and contract with the global trends. A slower India and China are not helping, but Japan has been coming back on after last year’s earthquake and tsunami wiped out the Japanese growth story.  These companies are also tending to a poor European situation right now.  Most earnings estimates for the year have already come down in recent weeks, but the question is whether or not those have come down enough.

JON C. OGG

Tami Reller, chief financial officer of Microsoft’s Windows unit, predicted that figures will show PC sales fell 1% or more last quarter, according to a Bloomberg report. Disk drive parts made in Thailand were in short supply. Smartphone sales also may have undermined demand.

The economy is good enough, and the number of new PC products is large enough, that when manufacturing returns to normal levels, there should be a large uptick in sales. At least there should be one in the short term.

The usual cycle of PC replacement among consumers and companies will be one reason for robust sales as the year goes on. Products reach the market with new software and faster chips. Competition among the largest manufacturers keeps prices low. Entirely new segments of the market, in the current case tablets, drive customer sales. And there are the introductions of unexpected products like the new ultrabooks, which are light but have powerful processors.

It is convenient to say that smartphone adoption will hurt PC sales substantially. That may be true, but it also may not be. The PC can still do many things smartphones cannot because of their processors, screen size and storage capacity. Consumers and business users often have both PCs and smartphones. None of the large research firms, such as IDC, have changed their overall global 2012 forecasts since the Thailand floods.

PC sales may have been partially interrupted recently, but when that interruption has ended, demand will push sales higher.

Douglas A. McIntyre

The market for tablets is already mature enough to support substantial sales. Apple (NASDAQ: AAPL) and Samsung have proven that. That competition between the two is heated enough for each to spend time in court attempting to block sales of the other country by country.

If any other company is late to the tablet PC market it is Amazon.com (NASDAQ: AMZN), which launched its Kindle Fire late last year. Amazon has the advantage of its large content libraries to help buttress sales. Dell will have no such advantage.

Dell also will face other tablet launches in 2012. That will include one by Lenovo. Acer has just entered the market. Hewlett-Packard’s (NYSE: HPQ) first foray was a failure, but that does not mean the firm will not try again.

Companies like Dell get caught flat-footed when a market they should do well in grows rapidly. The excuse is usually the same. It is worth a wait to see how the market will flesh out. It is best to hold off to see which features and operating systems have the most momentum. By the time all of those things are known, it is usually too late. Being first to market a risk, but it is a bigger risk to be last. The tablet market has already shown as much.

Douglas A. McIntyre