Had some very positive responses to last night’s SP 500 valuation post.
Thanks for the comments.
A question from Leslie Lammers, CFA, founder of Riverfront Advisors asked about Q1 ’15 Revenue Growth, and what would it look like if broken out the same way earnings growth was looked at in last night’s post.
As always Greg Harrison of Thomson Reuters was kind enough to provide the detail this afternoon:
| EPS | Revenue | |
| Overall | 2.1% | -3.0% |
| Ex-AAPL | 0.6% | -3.5% |
| Ex-Energy | 10.2% | 9.9% |
| Ex-AAPL & Ex-Energy | 8.9% | 2.0% |
Here is the data for readers, and many thanks to Leslie.
At 4% of the SP 500 by market cap, and 6% by earnings weight, AAPL is the big dog in the 500 yard (so to speak).
Today, the financial media made a big deal of the “SP 500’s all-time-high” but I think we need a trade and close above 1,226 and a breakout in AAPL above $134.54 on volume to see the primary leadership stock support the SP 500’s all-time-high.
It was noted on the wires today that Carl Icahn was “preparing” a report on AAPL, presumably for public consumption. His original comment around AAPL’s earnings report in April was that he thought the stock could be worth $200 per share, so you should be surprised like Captain Renault of “Casablanca”, if the report turns out to be wildly bullish.
I worry that these large cash balances, gathering dust on the mega-cap SP 500 companies, are building overseas. In Cisco’s report last night, of the $54 billion in cash and investments on the balance sheet, one brokerage report I erad today noted that just $5.4 billion or 10% was custodied in the US.
Apple is owned in client accounts and has been for years, but I am looking for ways to hedge its influence. With AAPL having a 15% market-cap weighting in the QQQ’s, I have started buying the QQQE, which is a Nasdaq 100, Equal-Weighted ETF from Direxion. AAPL is not even found in the top 21 positions. Kraft is #1, Netflix is #2, and Microsoft and Amazon are in the top 10 positions, all with roughly a 1% weight (hence the equal-weighted moniker).
Financial’s had a good day today. The XLF still below its December ’14 high. The IYF is a little closer to a breakout.
(Long AAPL, SPY, CSCO (very small position), MSFT, AMZN.)