Apple and United Technolgies: Bargains Amidst the Recession News

Today the Chicago Fed released notes on the economy showing a decrease in U.S. economic activity to the lowest level in five years.  This indicates the recession may have already begun.  Watch for more recession news to end this stock market rally as analysts look for earnings decline. 

I'm taking some profits on some of my financials into this rally a bit while nibbling at long term bargains like United Technologies (UTX) and Apple (AAPL).  I think I'll have a chance to buy UTX and other industrials in the next few months at better prices as well.

Disclosure: I own UTX.  I sold half my position in both FNM and FRE last Thursday.  I own AAPL and added to the position today and last week.  I may write some short term out of the money calls (160-170) against AAPL if it continues to rally above 140.

Comments

[Brandon:]

Do they pay you to write that? Cause if they do, more meat is required on them financial bones. You realize your blogs are linked to finance.yahoo.com right?

2008 Mar 24 05:21 PM

[michiganjake:]

Great time to get back into Apple. The quarter should break another record and it appears the mutual fund and hedge funds managers are starting to buy in advance of the April earnings report. Forget the calls and go long!

2008 Mar 24 09:16 PM

[digivision:]

Totally agree , if Apple holds around $140 then they are back on track to run to $170 by June and possibly brake the $200 barrier if the Q results are as good or better than expected, since Apple has historically beat the estimates this might be the case yet again , maybe this time it will surprise even more than usual because everyone is expecting a weak ipod/iphone number , but they might surprise .
Of course this is all speculation
til June

2008 Mar 25 12:29 AM

[Michael B. ...:]

Thats a little too aggressive on the AAPL I think. Of course anything can happen, but this stock is priced fairly. Long term, fine. But why should AAPL be trading at a forward 32 PE (200) with a 22% growth rate in a battered economy?

This is a buy at 115-125 and a sell at 140+ until the clouds are gone.

2008 Mar 25 12:36 AM

[siegfried:]

what are growth rates for AAPL product lines?
iPod
Macs
iPhone

apply these growth rates to current revenue in a ratio according to their respective product mix. subtract from this fixed costs and cogs. then tell me what that operating profit is, compare it to equity market cap less cash on hand, and then see what the multiple implies for future growth. then you might have something worth reading instead of idle price speculation.

2008 Mar 26 07:33 PM