You can explain all the recent action in Apple (AAPL) with one word -- harvesting.
Since hitting its all-time high of about $700/share in September, both management and shareholders alike have focused on harvesting the abundance Steve Jobs created.
The $2.65/share dividend, it turned out, was just a taste of things to come. In the last six months Apple insiders have sold 164,559 shares. One of the largest sales, 35,000 shares in all, was by off-again, on-again Apple executive Robert Mansfield, who is building himself a dream home near Santa Cruz. (Drive safely on U.S. 17, kids.)
Apple's trailing P/E, meanwhile, is now at about 12.17. That's much less than the current S&P 500 median of 14.45, and thus something of a buying signal. But there is little buying. In fact, each move of the stock upward is matched by a sharper move down.
Again, it's harvesting. Only in this case, by Apple bulls. Folks who picked up the shares for $300 or $400 per share even a few years ago now have a fat capital gain, and they want to take it before the fiscal cliff hits. So, bargain. Expect a sharp move upward in January.
Apple's efforts to harvest the profits from its patents are well-known, but there are other indications that CEO Tim Cook is trying to manage for the stock price, a number the late Steve Jobs pointedly ignored. Like his recent leak of an "Apple TV" -- I have written elsewhere that such a move is inevitable, but Cook's leak did indeed pour gasoline on that fire.
There would seem to be little reason for Cook to talk about these rumors, as Apple is pretty obviously winning Christmas. It's considered bearish that you have to wait a week to get your hands on an iPad -- is there any other tech product out there with that kind of demand?
Is the harvesting over? I don't think so. Cook seems to have a finger on the political pulse, making some of his new iMacs in the U.S., appearing on magazine covers, and talking openly about improving "collaboration" on the bridge -- the planned Apple spaceship in Cupertino has no corner offices and few floors, so what else are you going to call the CEO's office?
I think you can safely buy Apple at these prices and make a solid profit on it with a three- to five-year time horizon. Cook is just 52. Or you can trade it, up and down, knowing that its volatility is going to make a lot more people a lot more money than its trendline from here ever will. A stock that's good for widows, orphans, and day traders? What could be better?