The Daily Dose: Get the Apple Low-Down

 | Apr 24, 2014 | 9:00 AM EDT  | Comments
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Welcome to the peak of hell week, not made any easier by the arrival of grabby headlines.

Bill Ackman apparently did something borderline illegal with a noteworthy company. Hard-to-understand pharma companies may or may not join forces to sell drugs to Obamacare holders. A previously unknown in financial services continues to complain that Coca-Cola's (KO) compensation package is way off base (I agree). Amazon (AMZN) will report another quarter that is unworthy of the valuation Mr. Market has afforded the underlying stock. Apple (AAPL), by most valuation metrics, has looked cheap for a year ahead of the annual upgrade cycle that will lead to hundreds upon hundreds of live blogs that discuss form factors and Tim Cook's attire. So excited!

I expect Apple to reluctantly release a larger-screen iPhone at some point. (Ever notice how the current iteration fits comfy in the hand and can be used with full hands? Yeah, that was by design.) But the alleged wearable device may not appear (I call it the iBand -- an iWatch is limiting).

Nike's (NKE) unusual exit from the wearables market this week via its Fuelband news does suggest that a new piece of Apple hardware is imminent, but manufacturing issues make it less than a 50% realty for a holiday 2014 release. In fact, I wouldn't be surprised if Apple dedicates the product's introduction to a separate event in early 2015 instead of lumping it in with the iPhone and iPad refreshes.

By the way, new retail chief Angela Ahrendts starts at Apple like now. Here is what you should know before tons of pieces get written on her arrival.

In Other News...

Starbucks (SBUX) gave me a hard time about the rating downgrade we issued a few months back. We have not spoken since, but I do plan on placing a call to reconnect as always, because that's what stock analysts are supposed to do. Starbucks has to deliver on a couple of areas before we consider re-establishing a Buy rating. Some of those areas include: 

1. U.S. comp trend not meaningfully slower quarter on quarter amid harsh weather, and the fundamental shift to mobile consumption that weighed on holiday quarter results.

2. U.S. comp trend must ultimately be above consensus, as CEO Howard Schultz has been hyping the benefit of mobile payment in numerous interviews, in light of the large amount of gift cards sold for the holidays.

3. Although not a deciding factor, I would like to see Starbucks guide the Street to an upcoming menu price increase in front of coffee and food price inflation arriving to the financial statements more prominently in 2015.

I encourage all investors to do the following once Starbucks reports:

1. Set an alert right this very second for "Brian Sozzi Starbucks TheStreet." I will have a new must-watch Starbucks video hitting exactly at 3 p.m. EDT. Sorry, no content previews -- people will lift my ideas because they have none of their own.

2. Try and not get mesmerized by Howard Schultz' comments. Have a numbers-oriented attack plan, for example similar to the one I laid out above.

And on Housing

Owens Corning (OC) roofing sales sufficiently fell below the company's plan. New- and existing-home sales reports continue to be weak. Home Depot (HD) and Lowe's (LOW) earnings misses next? Whatever the story, housing's recovery has definitely stalled, and so have the stocks...

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