Thursday, January 17, 2008

Paperstand (AAPL, TIF, DAL)

Barron’s Online out saying that Apple (AAPL) should pass economic stress test. If the US economy goes into a recession, any public co with an uncanny knack for generating outsize growth may find its shares highly prized by investors. One such co could be Apple, which despite sales of $24bn last year, sells just a fraction of the world's PCs and less than 1% of all cellphones. That tiny mkt share presents plenty of upside for Apple as it makes inroads in both fields. Apple's iPhone has quickly seized significant share of the small but fast-growing mkt for the most expensive phones, putting to shame cellular stalwarts Nokia and Motorola. And all indications are that Apple had a boffo holiday season in computer sales, which could give the shares some support when earnings are announced next week. On Tue, CEO Steve Jobs displayed the kind of chutzpah that keeps Apple in the papers and keeps pushing the co into new mkts, announcing the world's thinnest laptop, the "MacBook Air," and a revamped version of its computer for the living room, AppleTV. It's that doggedness with respect to emerging product categories that keeps adding new chapters to Apple's story as a growth stock. Sales and profit should both grow better than 20% next FY. At a recent price of $158, Apple shares have had a "20% off sale." "Apple's not immune to the cycles of PC buying, but they have a lot of room to grow, and they're doing a lot of things right," says Tony Ursillo, of Loomis Sayles. Ursillo expects Apple's Macintosh computer unit sales to rise 25% this yr, more than double the 11.6% rate of the PC industry overall projected by research firm Gartner. "The story with Apple continues to be how far ahead of their competitors the products are," says Glen Kacher, of Integral Capital Partners. "There is a multiyear path for Apple to gain mkt share in the PC business," says Kacher.

“Inside Scoop” section reprots that the famed activist investor, Nelson Peltz, bought 3.6m shares of Tiffany (TIF) on Tue and last Fri, jumping in after the jewelry retailer's stock tumbled 11% on disappointing holiday sales and a lowered ‘07 profit forecast. Peltz's Trian Fund Magmt now owns 7.9% of Tiffany, or 10.7m shares.

The WSJ’s “Heard on the Street” column discusses Delta Air (DAL) merger plans. As Delta pursues merger talks with Northwest (NWA) and UAL's (UAUA) United Airlines to form the world's largest passenger carrier, a potential linchpin is thousands of miles away in Paris: Air France-KLM. The European airline already is an ally of Delta and Northwest in SkyTeam, one of the 3 major international airline groupings. Air France-KLM also could provide strategic or financial backing in a Delta bid for Northwest, the airline most likely to emerge as Delta's preferred partner. Delta CEO Richard Anderson traveled to Paris after his meeting with Delta directors Fri, at which the board authorized him to formally begin merger talks with the No. 5 and No. 2 US airlines by passenger traffic.

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