Let’s keep the fun rolling with stock picking week. I could get used to this.
Bull Pick – Apple (AAPL)
I will be the first to admit that it didn’t take a ton of brain power to come up with this one, but sometimes that’s the way it is in the markets. The market rewards those who don’t overthink and this is the case with Apple.
As usual the company reported blowout earnings coming in at $4.64, easily surpassing estimates. Earnings grew a whopping 70% from last year. This isn’t a small cap company we are talking about here; it is in the top three in the world in terms of market capitalization and to post this kind of growth is astonishing.
The stock sold off a bit after earnings, but short of curing AIDS or cancer, the stock was going to take a breather after soaring the way it did going into the report. It is a great time to pick up the shares around the $300 level. Don’t let the huge share price fool you; the stock is still cheap at these levels due to its phenomenal growth and reasonable valuations. Analysts will do their usual post-earnings estimate raises, so that will make the stock even cheaper on next year’s numbers.
I don’t want to get into the nitty gritty of the earnings report as there are thousands of other analysts that are doing that. All I know is that the market is giving you a gift to get in the best company in the world.
Bear Pick – Huron Consulting (HURN)
This is a much lower-profile pick than Apple, but one I want to discuss. The company has had some accounting issues in the past, but more recently announced a sale of a key unit, which was met by intense selling of HURN by investors.
In early October, the company said it would sell its disputes and investigations practice to Grant Thornton, and also lowered its full-year revenue guidance as a result. It is left to be seen whether this was a good move in the long run, but investors slammed the shares to the tune of 15% on the news.
All five analysts lowered their estimates for the current year and next year. Over the past month, this year’s estimates have been sliced 30 cents to $1.16 per share. I also don’t like the balance sheet at all. It shows only about $3 million in cash and $295 million in debt. This doesn’t leave the company much wiggle room to maneuver. It is not particularly expensive on a price/earnings basis, but the company has some issues to clear up before investors will get back on board. That is one reason the stock is still near a 52-week low.
Let’s Pick Some Stocks – Day 3 is an article from: 
