It's difficult not to get agitated by all of the inanity surrounding Apple (NASDAQ:AAPL) these days, particularly the rumors and false reporting. I can understand the angst if you had been trying to sell short up until a few days ago. I even sympathize with people, particularly urban dwellers in "hipster" neighborhoods, annoyed by the volume of MacBook toting, iPhone tapping, iPod wearing cool people converging on the local coffeehouse. I don't judge, yet I feel you. If you are an AAPL investor, however, get a grip. If the stock's just on your watch list, buy it, short it, or move on.
About a year ago, AAPL closed at $204.62. On Wednesday, it ended the day at $342.62. That's a gain of $138 per share, or more than 40%. My guess is that whoever picks stocks for the Central Laborers' Pension Fund has not picked a bigger winner than AAPL over the last year. Yet the fund had the nerve to call for a vote for AAPL to "adopt and disclose a succession planning policy." I might be dealing in semantics here, but AAPL has already adopted a succession plan; maybe the company just hasn't officially adopted one. The shareholders who called for the vote, and ultimately lost, wanted the plan disclosed. I cannot understand why it matters. Or, more so, why you would want, presumably, one of the biggest gainers in your portfolio to put so many of its cards on the table?
As John Paczkowski noted at All Things Digital, AAPL doesn't want to give competitors an advantage by letting them in on to future plans and potential successors to Steve Jobs and Tim Cook. If AAPL is presently grooming an intern to replace Jobs and then Cook, the last thing they want is for Google (NASDAQ:GOOG) to throw a better health plan, unlimited vacation time, and a lifetime supply of beer his way.
Things leak from a company even as secretive as AAPL. Unless they pull something unexpected out of Steve Job's Honda Civic, few people will be shocked by the new iPad 2 features debuted on March 2nd in San Francisco. When events such as this prove anti-climactic, it may not hurt, but it certainly does not help the stock. If APPL has to disclose more of what it plans to do, too much upside, potentially, gets priced into the stock. When a stock gets priced to perfection, which AAPL is absolutely not, investors have good reason to hesitate before jumping in.
AAPL has a plan and its best that they keep it secret. If you own the stock and want to give it its best of chance of hitting its most aggressive price targets, you probably should "do likewise, gents."
It's unfair to place all of the blame on some random pension fund and a mavericky group of shareholders, though. The media fuels the fire. Just a short time ago, the Financial Times hit the wire with a story, using the following headline: Succession planning: who needs it?
Now, of course, the story goes on to take a relatively measured, logical approach. That does not stop the headline writers, however, from hack "journalism" in an attempt to get your attention. Do I have your attention!? Are you interested!? I know you are... Who cares what the story says? Just write a flashy headline, create false impressions, and we're good to go.
Really, though, all of the recent AAPL hysteria just creates the buying opportunity of a lifetime for people who have not taken their eye off of the ball. The common stock is dirt cheap right now. OTM call options, with time on your side, should be screaming your name. In just the last couple of days, several analysts reiterated their price targets. Maynard Um of UBS, for example, has a price target of $465 on AAPL shares. Um believes the refreshed MacBook released on Thursday could help increase AAPL's EPS this quarter by $0.02 per share per every 100,000 sold. Brian White of Ticonderoga thinks AAPL could see $550 within a year. And the funny thing is, these estimates are within the realm of perfectly realistic.
Disclosure: I am long AAPL.