Apple 2.0

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How to play Apple's quarterly earnings reports

June 26, 2012: 7:07 AM ET

The weeks before the numbers are released are critical

Click to enlarge. Source: aapltrader99

FORTUNE -- No matter how the market may squeeze Apple (AAPL) in the up and down of daily trading -- its forward P/E ratio as of Monday's close had been compressed to 10.53 -- the stock tends to seek its own level by the time the company issues its quarterly earnings reports.

Which makes the charts posted over the weekend by aapltrader99's Randy Fosler so interesting.

Apple's third fiscal quarter ends Saturday June 30, and with that in mind, Fosler took a look at the stock's pre-earnings behavior over the past 13 quarters. Of those 13 quarters, only three saw a decline in the month before the earnings report, and each of those was a special case (the broad market collapse at the end of 2008, for example).

In the chart above, Fosler has marked the best entry points pre-earnings in bold black and the worst in bold red. Based on the frequency of those bold numbers, the best time to buy Apple would be in the middle of the month prior to earnings (8 black bolds) and the worst would be the week before (8 red bolds).

Apple should post the timing of its Q3 earnings release any day now. The betting on the investor boards is for Tuesday July 24, which suggests that if you were looking for the best week to buy Apple this quarter, you may have already missed it.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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