Apple: Taking Some Chips Off the Table at Current Prices
Shares of Apple (AAPL) rose nearly $5 yesterday to close at more than $188 per share. The company is faring very well during an overall weak time for consumer spending, thanks to a strong product lineup, and Wall Street is excited over the prospects for the company's forthcoming next generation iPhone.
This overall bullishness is the polar opposite scenario we saw back in February when I wrote that Apple's Valuation Looks Attractive Again amidst worries over a consumer-led recession and a lapse of new product introductions from the company. Since then the stock has soared from $119 to $188, for a gain of 58%. As a result, the shares have gone from very compelling from a valuation standpoint (22x 2008 earnings estimates) to fairly valued in my eyes (34x 2008 earnings estimates) and accordingly, I have been taking some chips off the table at current prices.
Apple Stock Performance - 2008 Year to Date
This is not to say the fundamental outlook for Apple has changed (it hasn't), just that the stock no longer looks extremely undervalued as it did several months ago. The company remains a reasonable core technology holding in my view, just no longer in any significantly elevated portfolio weighting.
Full Disclosure: Long shares of Apple at the time of writing, just in less quantity than before.
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This article has 21 comments:
- PopTheBubble
- 12 Comments
May 13 05:28 AM- wallawallabingbang
- 155 Comments
May 13 06:29 AM- vgmatic
- 3 Comments
May 13 06:44 AM- dig
- 21 Comments
May 13 06:58 AM- dig
- 21 Comments
May 13 07:00 AM- User 163362
- 64 Comments
May 13 07:02 AM20smoney.com/2008/05/0.../
- Jon T
- 296 Comments
May 13 08:22 AM- CrossProfit
- 564 Comments
My Website
May 13 08:27 AMSmart investors know not to gamble and when to lock in profits. If you got in at around 120, then we agree with your overall investment style and locking in profits at around 188 on part of the position is prudent.
We also agree with 'dig', meaning that a likelihood of a spike between now and the end of June is fairly high. We put this at 211 and would lock in additional profits at that range, only to go back in on a retreat. If the retreat doesn't happen, then just say to yourself "never regret a profit".
See www.crossprofit.com/vi...
for chart and right click on chart for more options. EOL (end of line) was at 211 before February update and may be revised back again, depending on next earnings call.
CrossProfit
- DavidScubadiver
- 2 Comments
My Website
May 13 09:09 AM- montazuma525
- 1 Comment
May 13 09:37 AM- Pete D.
- 4 Comments
May 13 10:06 AM- Mac'em X
- 46 Comments
My Website
May 13 10:21 AMI research my own decisions now, and my portfolio's heavy on AAPL. Maybe soon there'll be a peak and temporary drop that skillful timing can profit from, but I'm in it for the long-term; I'm buying and holding this one while, long-term, it just goes up and up. (I'll prioritize great products and great management over "damaging double top" any day. : )
- AdamC
- 18 Comments
May 13 10:54 AM- optionsgirl
- 53 Comments
May 13 12:00 PM- frs
- 23 Comments
May 13 01:43 PMAAPL's big, BIG money and growth is coming from market share gains in the laptop & desktop business. Fundamentally, AAPL is a computer company with an accelerating, expaning business. That alone screams for long term buy. Phones and Pods are just icing on the cake.
- User 163362
- 64 Comments
May 13 04:31 PM- bryanz
- 44 Comments
May 14 12:04 AM- SequimRealEstate
- 3 Comments
May 14 09:15 AM- SequimRealEstate
- 3 Comments
May 14 09:16 AM- optionfire
- 2 Comments
May 15 05:31 PM- pk de cville
- 25 Comments
May 16 10:20 AMYou're right on the money. Apple is unassailably beastly. It's a carrier fleet, full speed ahead to the next conquest.
The others: In drydock, building destroyers.
Apple's fleet:
- dominant retail (both brick and mortar and website),
- world's best OS and SDKs unified in Macs/iPhones
- world's best user experience and service support
- dominant music store, soon to be dominant movie/TV store
- soon-to-be-dominant mobile app titles
- huge cash hoard (bigger than msft in % terms)
- world's best leadership/vision and technical/design brilliance
- world's best marketing insight
- exploding stk price leading to huge talent advantage: talent wants to work for Apple because of the increasing value of their options AND the disciplined way they are managed/led
- world's best innovation engine
Get the picture? Why would anyone distract themselves by trading this perma-growth stock? Timing a perma-growth is a fool's game, just let the good times roll!
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