AAPL/VZ and other musings for 2011

Good Morning to my 2 or 3 followers, it's been a while since I have blogged about investments but shoot nobody is perfect, how was our 2010? Well, myself and a few friends did pretty well with $HWD, $AAPL, $ECPN, $CSTR, and $CIM adding to our future retirement and palatial palaces in Bora Bora (man I wish). So I start 2011 with some great news, you will see below, it's good stuff to look forward to, I wish you all luck and in your investing triumphs so let's go for 2011!! Keep on trading, no speculating :)

Finally, after all the speculation, complaints, waiting, and wondering VZ and AAPL will be introducing the brand new Iphone to VZ. This union is a long time coming and I cannot wait for the announcement on Tuesday, Jan 11, 2011, this is going to be huge. AAPL is expected to earn some 20 Billion in revenue at the end of the 4th quarter but this estimate was before the VZ iphone. I believe for 1st qtr 2011 we could see a 6 billion dollars in revenues for AAPL, because the much anticipated Ipad 2 as well as new adopters of the iphone verizon. Now if you're asking yourself whether to invest in VZ or AAPL obviously I'd take AAPL over VZ. VZ has a p/e of 230!!! That's a ridiculious valuation as opposed to AAPL's humble 22.19 p/e ratio, still not confident? Buy some AAPL 230 call options...they're currently trading near 24, we'll see what happens on Tuesday.

What's next for AAPL? Couldn't tell you but I am so confident in this stock that I'll accumulate at 320, that's if it drops that low...

As for the rest of 2011, I really do not see a bull market compared to last year. I definately see a DOW 12000 (granted I don't really use the DOW as a measure for stock performance) how ever I believe Dow 11,000 would be a safer haven for a fundamental stock market. There are just too many pressing issues that need to be resolved. We still have a high unemployment (near 9.0%) which according to Ben Bernanke will take a couple more years to get back to sustainable levels. Couple that with an uncertain real estate outlook and rising 10-year treasury rates we are still in for slow growth for 2011-12. Lower than expected retail levels from last month show the consumer agrees as well. If you are a long term investor look to tech, cloud computing is going to be key for the future and it's happening now. I like $CA as well as $AAPL and even $ORCL, these guys are going to be the leaders in cloud computing.

I like the guy with the classes pointing in the air, so serious...

IMAX-stock pick of 2010

I personally have not scene Avatar or Alice in Wonderland but man did they make some money this past holiday/winter season. Alice in Wonderland had the biggest opening weekend for a

3-D movie ever and who was behind all this? IMAX, before hits like Avatar and Alice in Wonderland IMAX was known for their big educational movies involving dinosaurs, sharks, etc. Which in itself was a great market niche for the company but now there is a vast array of other movies that could really turn this company into a major player in the motion picture industry.

Let's first look at this company and see what makes it tick, well first off it's the one and only 3-d making movie company out there. Competitors include regal, cinemax, AMC, how ever the only reason they are competitors is because IMAX does have its own theaters but has since come together with its competitors and made their 3-D technology available to their movie theaters. It's a great move to get the mainstream audience to become adapted to 3-D entertainment. For just an extra $3.00 a customer can enjoy a good movie in 3-D which is a boon for the movie companies. Now a good story with 3-D graphics can become a box office hit as long as it's appealing to the 3-D eye.

Financially the company is pretty sound, it's trading at about 100 times earnings but the fact is that 2009 provided the first profit in nearly 3 years and 75% percent of the profits were made in the last quarter. About the same time Avatar came out, IMAX has had 2 back to back hits with Avatar and Alice and Wonderland leading to a 40% increase in revenue over the year. Now if you take into account the summer block busters coming out (Dreamworks movies, Hubble Telescope, Clash of the Titans, Iron Man 2) we could see 120% increase in revenue. Now I really do not think this is far fetched since a lot of people are enjoying this 3-D ride and forget the cost of buying a 3-D tv. Just spend the extra $3.00 and see a brand new movie on the big screen. That's a much better deal than spending $3,000.00 on brand new technology.

Some negatives about this company is the overall liabilities this company has. Short term debt has doubled since last year along with paid in additional capital. Return on equity is pretty low how ever these are all figures over 11 months (January to November). Earnings are not out yet for Imax's 1st qtr but I believe we could see near $.30/share for the 1st qtr. Which would really send IMAX stock high. If they can keep generating cash then their current liabilities will be an after thought.

So go see Avatar and Alice and Wonderland...oh and go buy IMAX too...it's a steal at $16.00