Apple (AAPL) investors were concerned that expectations had risen so dramatically since mid December that the company might have a difficult time surprising the Street. Now that Apple has surpassed even the highest of estimates with its 37 million iPhones, 15.43 million iPads and 5.2 million Macs sold, how high can this stock climb?
Since January 1, 2009, Apple stock is manifesting a trend of quarterly and yearly consistency that is without peer. Its annual gain averages $113 with little variation year to year. Apple has reached a new high in each subsequent quarter in 10 of the last 12 quarters. The most interesting bit of research is that the average new quarterly high is $33 higher than the prior high. The only two quarters in which Apple failed to reach a new high were Q2 and Q4 of 2011. Both of those were caused by European turmoil. If the trend continues, it would mean that the current quarter should witness a $46.75 rise in order to make up for Q4 underperformance. This precedent suggests that Apple stock will reach $473 sometime before April 1st.
The holiday report confirms the notion that Apple is the best investment vehicle on Wall Street. With quarterly revenue of $46.33 billion, Apple truly has become its own asset class worthy of its own set of trading rules and discipline. I'm looking forward to the Apple Investor Summit (appleinvestorsummit.com) in March to discuss trading ranges, slingshot strategies, entry points, options, and more as we all work to maximize profits from this opportunity.
With this earnings report and positive investor reaction, Apple looks poised to end its recent period of p/e contraction. If this stock can keep up with the company's earnings growth it will rise to the $550 level over the next twelve months. The company that Steve Jobs built is in good hands. Tim Cook appears perfectly capable of turning these iProducts into a market share juggernaut.