Last Saturday, I had the pleasure of attending the second
Boston Book Festival. It's fitting that our historic city has an
event devoted entirely to the written word, as it is home to the
oldest free public city library in the world supported by
taxation and the first to allow its patrons to borrow books and
other materials.
The festival is held in Copley Square, also the location of the
Boston Public Library, and plays host to a variety of events,
like author readings and discussions, book signings, live music
and children's activities. My favorite parts were the author
readings and discussions and I was fortunate to be able to attend
two featuring some of my favorite writers: Bill Bryson and Joyce
Carol Oates.
In recent years, people have bemoaned the effects the rise of the
Internet and e-readers have had on books, but the festival proved
that while the medium in which we read books may be changing, the
written word is here to stay.
Last year when I attended the festival, I wrote about Amazon.com
(
AMZN
), maker of the Kindle e-reader. After that, the stock has
meandered higher, ultimately topping out with the overall market
in the spring. It got hit in the summer volatility, but has
climbed rapidly since the market resumed its upward trend in
early September. This is what Cabot Top Ten Weekly Editor Michael
Cintolo had to say about it on September 13:
"Retail has not been the place for growth stock investors in
recent months, but there have been some signs of life in the
sector, and Amazon remains a leader in the field. The reason for
the stock's strength lately surrounds its major price cut for the
new version of its Kindle e-book reader, which can be had for
$139 (compared to $399 when it was first released three years
ago). That price cut is sparking sales of the device in a big
way-one analyst sees nearly five million Kindle sales this year
alone-and it doesn't hurt that Best Buy will also begin selling
the Kindle at its stores in the weeks ahead. Of course, the
Kindle is just one piece of Amazon's story; top management has
guided the firm into the #1 position in online retail. We like
the 40%-plus sales growth each of the past three quarters despite
the weak retail environment, as well as the 35% earnings gain
projected for 2011. It's not a new story, yet it looks like the
company is set to get a lot bigger in the quarters to come."
But Amazon isn't the only company with a successful e-reader.
Apple (
AAPL
) sold 4.2 million of its iPad tablets in the most recent
quarter. While the iPad isn't strictly an e-reader, it does
compete with the Kindle, especially with those customers seeking
more functionality from the device. Here's what Mike had to say
about the stock in late September:
"Apple needs no introduction, as it's one of the best-known (and
best-loved) companies today. The big news during the past few
months was probably news that did not come about-after a
well-publicized mess-up with its new iPhone (antennaegate),
consumers didn't storm out and the issue seems to be resolved.
And that allows investors to look ahead to the many other irons
Apple has in the fire, such as the fast-selling iPad (some now
see north of 20 million sold during the next 12 months), a
possible new iPhone using Verizon's network (this could be
particularly huge for business), new Mac computers, and the new
Apple TV, which allows Netflix streaming and movie rentals right
to a TV. Sales and earnings growth remains terrific, and
valuation, at 22 times trailing earnings, is surprisingly
reasonable."
AAPL hit new highs recently and while it stumbled a bit after its
earnings report on Monday, the stock recovered as the week went
on. And the company is clearly going strong and has a lot of
potential for the future. Just this week, Apple held an event
focusing on its Macintosh computer where it announced a new
operating system, called Lion, and a new version of its
ultra-thin Macbook Air.
And if the trend toward reading on devices, rather than from
books, continues, both of these stocks stand to benefit. You
could buy them here and hope for the best or you could get more
expert buy, sell and hold advice from Mike in Cabot Top Ten
Weekly.
Click here to learn more
about Amazon, Apple and other leading stocks.
---
In this week's Stock Market Analysis Video, Cabot China &
Emerging Markets Report Editor Paul Goodwin says that there's
nothing very complicated going on in the markets right now. After
a long uptrend that began strongly in September, the markets
advanced for a month, corrected, resumed their uptrend, and
corrected again. Stocks discussed include Netflix (
NFLX
), Cree Inc. (
CREE
), Agrium (
AGU
), John Deere (
DE
), Alexion (
ALXN
), and Rightnow Technologies (
RNOW
).
Click here to watch!
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Until next time,
Elyse Andrews
Editor of Cabot Wealth Advisory