The Zacks Analyst Blog Highlights: Apple, Amazon.com, Microsoft, Nokia and Supertex

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Oct 28, 2013, 09:30 ET

CHICAGO, Oct. 28, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Apple Inc. (Nasdaq:AAPL-Free Report), Amazon.com Inc. (Nasdaq:AMZN-Free Report), Microsoft Corp. (Nasdaq:MSFT-Free Report), Nokia Corp. (NYSE:NOK-Free Report) and Supertex, Inc. (Nasdaq:SUPX-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Apple Revamps iPad Lineup

In a bid to strengthen its competitive position,Apple Inc. (Nasdaq:AAPL-Free Report) refreshed its full product lineup for the upcoming holiday season. After releasing iPhone 5S and 5C in September, the company recently upgraded its iPad product lineup, which will not only help it to woo existing customers but also attract new ones.

The refreshed iPad lineup comes with additional features, is thinner, lighter and powerful compared to its predecessors. The new full-size tablet called iPad Air has a faster processor, offers a better resolution and display and is priced at $499. Apart from iPad Air, the company also launched a refreshed iPad Mini with retina display and 64-bit desktop class architecture used in iPad Air.

Previously, Amazon.com Inc. (Nasdaq:AMZN-Free Report) has been instrumental in bringing down the price of tablet devices such as iPad, by introducing low cost tablets starting at $229. Therefore, it is a smart move by Apple to competitively price its new iPad, which will help it to withstand competition from other players.

Moreover, Apple also announced that it would provide free access to its iWork productivity suite, which competes with Microsoft Corp.'s (Nasdaq:MSFT-Free Report) Office applications. Moreover, the new device from Apple comes with iLife photo, movie as well as music making apps.

Apple's iPad witnessed year-over-year volume growth of 28.6% during the first nine months of fiscal 2013, whereas the introduction of the lower priced iPad Mini boosted iPad revenues by 8.32% compared to the year-ago period. Although, iPad Mini is a lower margin product, it has kept the sales momentum intact for the iPad.

The company will start selling the iPad Air early in November, while iPad Mini will be available later in the same month. Apple is doing it to strengthen its grip in the tablet market as industry experts believe that the company might lose some of its market share to other competitors.

As per industry research firm IDC, although Apple iPad may continue to be the top-selling tablet, its market share has declined from 60% in the year ago period to 32% this summer. Moreover, Android-based tablet sales soared from 38% to 63%. This apart, Windows-based model is also witnessing a good jump.

Competition from companies such as Nokia Corp. (NYSE:NOK-Free Report) and Samsung have also affected the growth prospect of the company.

We believe that this completely refreshed product lineup will help the company to improve its top-line growth going forward. However, Apple is known for its innovations and the lack of a completely new product will remain an overhang on the stock in the near term.

Currently, Apple has a Zacks Rank #2 (Buy).

Supertex Upgraded to Strong Buy

On Oct 24, Zacks Investment Research upgraded Supertex, Inc. (Nasdaq:SUPX-Free Report) to a Zacks #1 (Strong Buy).

Why the Upgrade?

Supertex has been witnessing rising earnings estimates on the back of strong fiscal second-quarter 2014 results. This well-known semiconductor manufacturer delivered positive earnings surprise in all the last 4 quarters with stellar average earnings beat of 245.7%.

Supertex reported fiscal second-quarter 2014 (ended Sep 30) results on Oct 22. Earnings per share came in at 24 cents, surpassing the Zacks Consensus Estimate by 41.18% and the year-ago figure by 33.3%.

Earnings were primarily aided by top-line growth of 11.5% year over year and strong margins. Supertex reported robust sales in all four of its growth markets -Medical Ultrasound, LED Lighting and Backlighting, Printer/EL, and Industrial. Moreover, the company's gross margins improved 340 basis points sequentially to 57% during the reported quarter.

Notably, some of its recently launched products received positive response from the market and are likely to boost sales in the upcoming quarters.

The Zacks Consensus Estimate for fiscal 2014 increased to 78 cents from 73 cents per share as one of the estimates was revised higher over the last one week. Additionally, for 2015, analysts raised the estimates over the same time frame, thereby lifting the Zacks Consensus Estimate to 78 cents per share from 76 cents.

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