Weekly Roundup- 1/27/12
This was a week to pay attention to for sure. Many companies were giving ridiculously obvious bullish signals to potential investors; taking note of these signals is the closest you can get to insider tips without sharing a cell with Uncle Bernie Madoff.
Netflix (NFLX)- Take a bow Whitney Tilson. This hedge fund All-Star has been making calls on NFLX with eerie accuracy. I highlighted NFLX in the last weekly roundup during its post-New Years run-up. In that article, I mentioned Tilson was predicting significant subscriber growth after the mass exodus of customers over the summer thanks to executive incompetence. Yesterday, Netflix beat earnings and announced it added 610,000 new subscribers in the 4Q, promptly sending the stock soaring up 20%. The stock is up over 65% YTD (best performing stock in the S&P YTD) and the momentum is for further upside. Bro’s, here’s the best tip I can give you… next time Tilson makes a NFLX prediction, listen.
Apple (AAPL)- Over the last 12 months, the Bro's have been telling any friend that will or won’t listen to get on the Apple train. It’s a proven breadwinner, and is still so continually undervalued that it’s insulting. AAPL had a MONSTER quarter, blowing away estimates by such huge margarine that you won't believe it's not butter. Share price rightfully jumped up 20% to $450. Now that Q4 is over, here are more catalysts for you to consider: (1) iPhone 4S release in China was met with tech crazed Asians thirsty for a taste of American freedom and will give Q1 earnings a nice boost; (2) iPad3 is rumored to be released in early March; (3) if the CES show was any indication, AppleTV should be ready by the end of the year. (4) in the Q4 conference call, Apple CFO Oppenheimer told investors they are “actively discussing” uses for its massive $100 billion cash pile they’ve been hoarding. This was unheard of during the late Steve Job’s reign and signals a new era with investor’s interests in mind. No other company can offer these kinds of profitable prospects for 2012.
Caterpillar (CAT)- All the pieces were falling into place for Caterpillar this week. CAT handily beat earnings estimates by 30% and raised guidance for 2012. The Fed promised to keep interest rates low into 2014, which analysts quickly acknowledged as a bullish indicator for the stock. The conference call was quite revealing: while Europe and North America held Caterpillar back, emerging market growth was exceptional and the main reason Q4 was as good as it was. Any turnaround in the U.S. housing market or the European recession will mark a rapid rise in CAT revenues.
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