In visiting the Apple store in Pasadena, CA today, I ran into a shopper who had a bag full of Ipads walking into the store. I asked him what’s he doing with all the Ipads? He replied, “No one in the office felt the need to trade in their Ipad 2 for the Ipad 3. It wasn’t worth the hassle and there wasn’t much value, they instead elected to wait for a new Android release from Samsung.” After he promptly returned his Ipads, I asked him if I could take a picture of his receipts. Well here they are: A total of 7 Ipads returned by one customer. While I was at the store, I asked the sales guy has there been any other returns today? He replied “There’s been quite a few returns today, mostly unopened boxes and most returning customers had more than one unit to return.” I asked him why’s that, his response “One of the guys returning it said that they were not able to sell any for a profit on Craigslist or Ebay so they are returning it. before the 14 day return date passed.”

This was quite interesting so when I got home, I did some searching on Craigslist and Ebay and found that many were trying to sell their Ipad 3s (new ipads) for a price less than the retail store price. People were listing Ipad 3s 16GBs for under $500. There was one person who listed an Ipad 3 64GB for $650! That’s $50 less than the retail price and about another $100 in tax and recycling fee.

In our opinion, sales for the New Ipad will not meet expectations and will lead to further pressure on the stock price. Our target for the next 3 months on Apple is $500. (Disclosure, we have a medium short position in AAPL stock.

1. Resistance is starting to form in the $610 area. For the stock to push past this number, there has to be some significant new news. The current price of $606 has all the good news built into it.

2. Ipad 3 sales are starting to slow down. If you visit their website, the current wait has gone from 2-3 weeks to now 1-2 weeks. Also when calling the stores, there are many left in stock. For instance, the Pasadena, CA Apple store has plenty in stock and more are being shipped in. Also the Beverly Hills Center Apple store has plenty in stock. So there’s plenty to go around.

3. In looking at Ebay and Craigslist, IPAD 3s are being listed below their actual purchase price. No one’s paying above the price when they are readily available at the store.

4. Returns are expected to start coming in as we near the 2 week return limitation. People who bought 2 or even 10 units, expecting to resale it on Ebay or Craigslist are returning it. This will lead to more being available. It’s quite possible the IPAD sales number can be a negative based on all the returns.

5. In a survey of 10 people (be it a small sample), 8 of the 10 saw no reason to upgrade from their existing Ipad 2s. If you did not tell them that this was an IPAD 3, all 10 would have guessed it was an IPAD 2 based on regular web surfing and routine activities. So basically there’s no rush to upgrade from the IPAD 2. Leading to more returns from those who expected to seem some change from the IPAD 2.

6. Overheating issue will put a damper on sales as more users test their devices and find that the temperature above 100% is too hot for their young kids to handle. This will lead to more returns. Each return can cost Apple up to $300 in lost revenue and fees on shipping/repackaging and resale at a refurbished price.

We recommend taking profit from the recent stock rise and purchasing back again below $500. Our price target is $500 for AAPL.
Please feel free to post your thoughts.

Some features in the new IPAD are Retina Display, which in layman’s term equals to better text and image viewing for the user. The CPU and Graphics processor were also upgrade, they are now using the A5X dual core cchip. This new chip and video processor will improve the speed. The camera also received an upgrade and is now 1080P for video recording. 4G data service is now available for the New IPAD. It’ll be interesting to see if users will pay the higher priced 4G service plans the carriers are charging. Some users were disappointed that Siri was not included.

It’s a bit early to judge the success of the New Ipad but if history tells us anything, it’s hard to bet against Apple products.

So how do you play this recent Apple IPAD release? AAPL have a tendency to run-up prior to new product releases and continue to rise a day or two after the release. When they had their IPAD 2 released on March 2nd of 2011, the price ran up from $338 in February 22, 2011 to a high of $360, two days after the product announcement. The week following, the stock price fell back down to 330. Based on historical numbers we recommend Selling your shares at today’s high and if you are still interested in Apple, there’s a strong change you will be able to buy it back at a discounted price two weeks from now.

Please post your comments on the matter.

1. Things started out overseas when Hungary announced that it’s economy is in a crisis.  This brought out concerns that Europe could be headed into a deeper economic crisis.
2. The Euro dropped to new year of 1.1955 against the dollar.
3. Jobs market data disappointed.  The report showed 430,000 jobs were created in May, well short of 513,000 that Economists polled by Thomas Reuters had expected.  And of the 430,000 jobs created, 411,000 were temporary census workers.

When the market opened on Friday, it quickly gaped down and steadily rose for the first hour of trading.  As traders began to absorb the data, the market sell off began to accelerate throughout the day.  The Dow closed at 9,931 (down 323 points), the lowest point since Feb 8th, 2010.

On a positive note, the S&P was able to gain support at 1064.  The S&P continues to trade within the trading range of 1105 - 1060.  Any move above 1105 is bullish and bearish if we break the 1060 range.  For active traders, it’s important to keep a close watch on the ranges.

At this time due to the poor jobs report, we are bearish on the retail stocks.  We are bullish on airline stocks as the group continues to hit new 52 week highs on a weekly basis.  Some stocks to keep an eye on are:

• ALK - Alaska Airline
• CRM - Salesforce.com
• UNG - Natural Gas Fund
• VMW - VM Ware

Look to pick up some shares on any major pullbacks on the above stocks, they are poised to outperform the market if and when we recover from the current slump.

The trades I post here are strictly my own personal trades and does not serve as recommendation to buy or sell a stock. Always do your own research prior to purchasing or selling a stock. Jin’s Corner is solely for the purpose of entertainment reading. Thank you for visiting Hot Stocks to Buy.

On the long side, I’m still holding on to SIRI and CTIC. SIRI has spiked up from my original purchase of .60 cents a few days ago. CTIC isn’t doing too much yet.

The trades I post here are strictly my own personal trades and does not serve as recommendation to buy or sell a stock. Always do your own research prior to purchasing or selling a stock. Jin’s Corner is solely for the purpose of entertainment reading. Thank you for visiting Hot Stocks to Buy.

The next few weeks is going to be a true test as earnings are scheduled to be released. We should see some positive reports as the second quarter of 2009 improved vastly from the previous quarters.

In addition to the earnings reports scheduled in the coming weeks, investors continue to eye the jobs report. Even though job losses are slowing down, the market would like to see some gains in jobs in the coming quarters.

If you have money in the stock market, keep a close eye on earnings report and the jobs number in the coming weeks. These two events should shape the way the stock market performs.

We wish you luck on your investments and as always do your own research prior to purchasing or selling a stock. We make recommendations based on our own research and this site is solely for the purpose of entertainment reading. Thank you for visiting Hot Stocks to Buy.
http://www.hotstockstobuy.com/?p=430 F (Ford Motors)