Apple reports earnings on Tuesday, January 24, after the close of trading. The consensus estimate is for $9.97 in earnings and $ 38.73 per share for revenues.
Of course, as usual, breakdown of numbers by product category will drive the price of Apple stock.
Over last three years, I have watched in amazement as analysts dismiss Apple’s projections. The legions of analysts have concluded that Apple has perfected the art of guiding conservatively so that it can beat the projections.
I follow several sets of rigorous principles and rules in my investing and here are a few I focus on prior to the earnings release of every stock in the Arora Report portfolio:
1. Nobody knows with certainty what is going to happen next. Analysts can be diligent and knowledgeable, but in the end it is a guess. A prime example is the recent earnings release by Google(GOOG). Analysts were uniformly bullish, but actual earnings turned out to be significantly under the consensus, and Google stock promptly fell about 8%. A similar situation happened with Amazon (AMZN) in the last quarter.
2. Pay attention to whisper numbers. Traditionally, whisper numbers have been a gimmick by Wall Street to curry favor with clients who pay large commissions. Whisper numbers are unofficial and unpublished numbers. Over the last three years, whisper numbers have been consistently different from the published numbers. What can you do if you do not pay large commissions? There are several services providing whisper numbers. In my experience, none of these services help investors make money…Read more at Forbes
