This Week’s 5 Smartest Stock Moves: Sirius XM Radio Inc (SIRI), Baidu.com, Inc. (BIDU) and More

4. Apple Inc. (NASDAQ:AAPL) takes the high road
There’s been plenty of chatter about Apple having to introduce cheaper products, especially in overseas markets where the iPhone is considerably more expensive than comparable Android devices given the lack of wireless carrier subsidies.

However, it was still a pleasant surprise for Apple to remind the market that it can also go the other way.

The world’s most valuable tech company introduced a more expensive iPad this week. The new tablet expands its latest generation of iPads with Retina Display to four products. The new iPad offers 128 gigabytes of storage, and the $799 price tag is $100 more than the priciest tablet that has just half of the flash storage capacity.

Apple has come under fire as it plays small. The average revenue per iPad has fallen from $568 to $467 over the past year, primarily as a result of the new $329 iPad Mini. The bigger concern for investors is that Apple’s overall gross margins have contracted from 44.7% to 38.6% in that time.

The new iPad will help bump up average selling prices, and it should have a favorable impact on gross margins, too, if storage-hungry tablet users gobble it up.

5. Amazon grace
Investors are cynics, so when a company falls short on the top line, you can usually expect a bloodbath.

Well, Amazon.com, Inc. (NASDAQ:AMZN) did clock in a little light in revenue in its holiday quarter, but the shares still rallied because operating margins expanded.

Let’s call this the anti-Apple. A week earlier we saw Apple take a hit after its gross margins contracted, but now we’re seeing Amazon rewarded for its margin improvement.

Amazon still has a long way to go, but the report validates the company’s strategy of making big bets on hardware in the hopes of making it back as those buyers feast on its ecosystem.

The article This Week’s 5 Smartest Stock Moves originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Baidu, and Facebook. The Motley Fool owns shares of Amazon.com, Apple, Baidu, and Facebook.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!