Will Apple Be Google Redux?
Quarter will be good, but it needs to be great.
As I said in last week's EPS preview, I still expect EPS reports to be broadly better than expected with volatility running hot. With so many reports coming out this week, I'm going to break the preview into 3 or 4 pieces - so keep an eye out for them.
Bank of America, Texas Instruments, SanDisk, Apple, American Express, QLogic, Amylin
Bank of America (BAC): Their report provided early lift, which now seems to be waning a bit. In the finance space, I still feel JPMorgan (JPM) and Morgan Stanley (MS) are the new go-to names.
Texas Instruments (TXN): This may finally be cheap enough to start acquiring, though I'm still waiting for the report. I think they'll have a more favorable product mix, along with growth in China, in coming quarters. Additionally, I feel Texas Instruments has become a classic cyclical play - and you want to buy cyclical plays when the rest of world thinks you shouldn't.
Apple (AAPL): This report will definitely be good - but will it be great? If not, we probably have a Google (GOOG) redux. As we get more versions of ultra-thin Macbooks, more color on enhanced revenue applications on the iPhone (like mobile search) and all the new software application partnerships, I think Apple is positioned better later this year and into 2009.
Moreover, at current prices I'm going to be leaning more towards Google than Apple for long-side reloads.
SanDisk (SNDK): My favorite stock of those reporting Monday, trading at less than 2 times cash (and under book value) - a clear current and future industry leader.
SanDisk might be cheap enough to rise even on a poor report. If the company gets knocked further down, I'm an aggressive buyer on material weakness. I've written about various catalysts for SanDisk in multiple Buzz posts, chief of which is their severely undervalued IP profile.
QLogic (QLGC): They've already raised guidance for the quarter, so it's all about next quarter's numbers. QLogic may be entering a new growth phase; I feel its best new product category is Infiniband.
CME Group, Wachovia, VMware, BRCM, Linear Technology, Yahoo, Lexmark, Infinera
Here are the names I'm watching for Tuesday. Look for commentary later today.
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