Piper Jaffray Sees Repetition of Apple's Historical Holiday Boom

| About: Apple Inc. (AAPL)

By Carl Howe

AppleInsider has a nice summary of Piper Jaffray's addition of Apple Inc. to its Alpha list, indicating that it expects above-average appreciation over the next 90 days. The nice bit: they published a historical chart that shows that Apple stock normally rallies about 43% in the fourth calendar quarter through MacWorld.

I really like Gene Munster's work, and our price targets are quite similar. I think that now we are past November options expiration and hedge fund redemption limits for the year, a lot of the downward pressure on Apple (NASDAQ:AAPL) stock is, in my opinion, behind us. Witness the fact that despite the Dow Jones being down more than 100 points at the moment, Apple stock is actually still in positive territory (Afternoon update: not any more; oh well). Once investors see the crowds in Apple stores over the Black Friday weekend and start anticipating the usual year-end Santa Claus rally in stocks in general, I expect the stock to return to a more positive year-end trend.

One more thing: I don't think today's stock price accurately yet reflects Apple's own optimism about the holiday quarter that it projected in its earnings call. My models tend to be pretty aggressive and usually are significantly higher than what Apple projects. In Apple's earnings call, Apple CFO Peter Oppenheimer projected that the company would have revenue of $9.2 billion and earnings of $1.42 per share. Given that those numbers were within 5% of what my model said (as opposed to where they normally are, which is about 20% lower), I think it very likely they are going to do substantially better than what I thought were optimistic projections.

All that said, no one can accurately predict the short-term movement of stock prices, myself included. But when I occasionally do that anyway, it's nice to have Piper Jaffray's Gene Munster for company.

Disclosure: Author is long AAPL.