By now, everyone that is even remotely connected to the stock market (and any market globally pretty much) knows that Apple will be reporting earnings for its March quarter after the close of regular market trading tonight.
The Street consensus on Apple metrics currently stands at the following:
March quarter iPhone shipments of 52 million;
March quarter earnings of $2.02 per share;
March quarter revenues of $53 billion;
June quarter earnings of $1.62 per share;
June quarter revenues of $45.6 billion;
June quarter guidance of between $45-$46 billion.
Investors and analysts alike will be listening in on the conference call to see whether Apple sheds some light on the new iPhone X, talks about its efforts in artificial intelligence (AI), virtual reality (VR), augmented reality (AR), autonomous driving, the recently rumored Echo-like product offering from Apple, the tax situation (both regarding lower rates and repatriation), how the company is doing in China and, to a lesser extent, in India, Japan and the rest of Asia-Pacific, the situation with Qualcomm, and any other updates on things that have been floating around for ages (like Apple TV and a content deal or joint venture or acquisition that could be in the pipeline.)
Knowing Apple management, none of these questions will be answered, except progress in China/ India/Japan/Asia-Pacific, and the rumor mill will continue to churn almost as soon as the numbers are released, as it always does.
It is also not a secret that Apple shares have been outstanding performers since late last summer and early fall when they were languishing in the $90 and change per share range.
Despite the stellar performance, Apple shares are still only trading at roughly 14x estimated earnings for FY18, well below market multiples, and that's not even factoring in cash and near cash holdings, which should hit $250 billion when the company reports numbers for the March quarter.
So, what should one do if one is positioned long, short or is agnostic.
Well, if you have been agnostic all through the rise in Apple in the last 7 or 8 months, chances are that you will be even more so now, if that is even possible. Of course, if shares were to drop after results tonight, you could start buying if that is how you want to go, given the fact that the new iPhone is supposed to be all that and more. Or, if the shares pop, you more than likely continue to remain agnostic.
The second possibility is that you have been fortunate enough to have been long the stock through the rise from the beginning (low 90's) or jumped in somewhere in between, in which case, you can take some off the table and hope the stock drops post earnings so you can add to your position at lower prices.
If the stock does not drop and you have taken some off the table, then you have to decide whether you buy back in at slightly higher levels, given the coming launch of the so-called super-cycle for the iPhone. Or you let the remaining position ride and that way at least you are still exposed to an Apple investment.
Finally, if you have somehow managed to remain short through the entire rise in Apple from the mid-nineties till the mid 147's (today), or are currently short no matter what your entry point is, you have pretty much one desirable scenario, which is for the stock to get dropped on the numbers tonight.
The stock is indicated to move about $5 per share or so in either direction once the numbers are out, although it would not come as surprise to me if it were to move by a greater amount, given the recent appreciation in the stock.
On the flip side, there could be many investors who would liked to have invested in Apple or wanted to add to their holdings and were unable to do so for one reason or the other, who could be waiting on the sidelines to jump in at the slightest weakness.
We shall soon find out.
Good luck into Apple's earnings release tonight whichever way you are positioned.
(Long aapl, long and short aapl options)
