Today’s Daily Alert recommendation comes from US Investment Report Editor Stephen Quickel, who now recommends selling his Top Pick for 2011, Apple, Inc. (AAPL). AAPL was recommended by US Investment Report at $340.65 in the Top Picks for 2011 Investment Digest, dated January 19, 2011.
“Stocks had a lousy week — the worst since the market bottomed in June. This comes in a setting of steadily improving economic news and modest price valuations. The problem is worry about the third-quarter earnings reports that began last week. Nervous institutions are selling stocks they think might be vulnerable to slower earnings growth. The most obvious case in point is Apple, Inc. (AAPL, $634), in the wake of its smashing iPhone 5 introduction last month. AAPL has slid 10% to 630 since peaking at 702 on September 19, despite 23% annual earnings growth projected by Street analysts, whose strong and moderate buy recommendations have risen from 46 to 51 in recent weeks, and despite its rock-bottom forward P/E of 11.8 and PEG ratio of 0.50.
“We were stopped out of Apple last Monday at 650 — a stock we’ve ridden from around 90 since 2008, with a couple of stopouts along the way, in our Growth Leaders and Conservative Growth Portfolios. And we’ll buy it back again when the overall market steadies from its current slump, now nearly four weeks old. So far, it’s a mild slump: the Dow and S&P 500 are down 2% or so, and the Nasdaq, where AAPL has a huge 11% weighting, is off 4%. We’d be surprised to see it devolve into a full-scale correction — unless the fretful bears, who are usually wrong, are right this time about earnings slowing significantly.”
- Stephen Quickel, US Investment Report, October 15, 2012