Daily Brief - Apple's biggest quarter

It was … huge. Hands down, best ever. Chip, schmip shortages couldn’t stop Apple from having its biggest quarter of sales ever in the three months leading up to Christmas.

Despite supply challenges, the company last Friday reported its Q4 sales jumped 11% to an expectation-beating $124B. Sales grew across every product line (well, except iPads …)

CEO Tim Cook comments about easing supply issues added fuel to the proverbial fire, and Apple shares spiked 5%.

Another bite at the AAPL

AAPL stock has been battered during the Nasdaq brutal sell-off. While that explains most of it, if you look through TOGGLE’s AI-filtered news feed, it has been a rough period for the stock on the news front, too. But it now offers a better entry point to those with fundamental conviction about the business.

Not for the faint-of-heart

As Barron’s points out, volatility of this order is not unusual for the market. Since the S&P 500 was created in 1957, the index has averaged about one 10% decline and more than three 5% declines every year, according to Dow Jones Market Data.

In fact, S&P 500 stocks with low price/earnings ratios had outperformed those with high multiples by 11.5 percentage points since the start of 2022, according to the analysis from Credit Suisse.

One catalyst for the correction is dramatically higher expectations for Fed monetary tightening: the chart below shows the big jump in the US 2-year Treasury yield in anticipation of rate hikes this year. The strategists at Goldman Sachs have upped their expectation to 5 rate hikes in 2022.

Stale or on sale?

The good news is that market turmoil may have created plentiful opportunities for patient investors. Looking at the TOGGLE TLI (out every Friday in the Daily Brief), the index correctly caught the bottom and has now turned positive.

For example, some analysts are arguing even the pandemic darling AMZN may now be undervalued (part of the bullish case may rest on the stock split, however). The company will report earnings on Feb 3.

Not surprisingly, lists of “bargain stocks” abound across financial media as Wall Street analysts study valuations to find bargains.

A quick way to check these picks for sanity, you can select “Undervalued Stocks” in TOGGLE Explore to see what else is in the bargain bin.

Happy hunting!