Seeking Alpha

Brendan O'Boyle

 
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  • Apple: $420 A Share Could Have Marked The Bottom [View article]
    Hey Bret,
    I realize you like bull put spreads here, what do you think of a synthetic long?

    In other words if you want to own the stock for the long term buy a $440 AAPL Jan-2015 Call and sell the $440 Jan-2015 Put. It's $66 for the call and $88 for the put so your synthetic long breaks even on the expiration date at $428.

    This might not net the same return, but seems like a good risk/reward if you aren't sure when AAPL will rebound, but you are pretty sure it won't go much lower than $400.
    Mar 17 11:41 AM | 1 Like Like |Link to Comment
  • Apple's Earnings Fall Is Completely Unjustified [View article]
    As someone who has some experience selling puts let me tell you something: do not sell puts on tech stocks!

    Selling a put gives unlimited downside and known upside. Tech is about growth and the bell curve distribution of returns for tech stocks have fat tails. They could go up a lot or they could go down a lot. When you cut off the positive side (large upside) you are left with the negative side (large downside). Thus selling a put (even on AAPL) for a tech stock is just a bad idea.

    I have watched these "supposed" genius option traders talk about selling HPQ and AAPL puts on Bloomberg and I literally yell at them that its a stupid trade. Picking up pennies in front of a steamroller. And buy the way I do think AAPL is a buy here.
    Jan 23 07:22 PM | 7 Likes Like |Link to Comment
  • Apple: Get Ready For January 18 [View article]
    If you go to Y-Charts and look up recent 13F filings AAPL institutional ownership has fallen off a cliff. One quarter ago 74 funds had more than 10% exposure to the stock and nearly 1000 funds had the stock as a top ten holding.

    One-quarter later only four funds are listed with greater than ten percent exposure to Apple and less than one hundred count it among their top ten holdings.

    The real catalyst for the decline of Apple has been a huge rush to the exits among institutional owners of the stock. The question for someone buying the stock now is whether the big money is right or wrong about the company. If they are wrong they will be buying in higher soon. If they are right, the Apple run is finished. I tend to think the former is the case and you will see higher prices now that most of the weak hands have sold out. I can barely believe that the institutional ownership changed so much in one quarter - the problem is all these funds are trading not investing. You have to be really careful when a trade gets crowded these days.
    Jan 19 04:21 PM | 4 Likes Like |Link to Comment
  • Apple's Decline: Thanks, iPad Mini [View article]
    So here are the articles I recall reading:

    First, the bull case on Intel ($23ish a share):

    http://bit.ly/TLeajk

    Then more downside ahead (sub-$20/share):

    http://bit.ly/SPRWiB

    For AAPL in an article titled: "Apple's Innovation Is Stronger Than Ever, Valuation Very Attractive" (about one month ago)

    http://bit.ly/TLeajl

    In which you indicate you "may initiate a long position." So perhaps you didn't explicitly say AAPL will beat INTC, but you seemed rather sober about INTC about the same time you were talking about putting money to work in AAPL. Now you seem fairly sober on AAPL. Neither is a 180 degree turn, but you can see my point, right?

    Now you seem to expect more downside ahead for AAPL. I don't see what has changed since the "valuation is very attractive article" on Nov 3rd. The mini-iPad is not new since then.

    It is reasonable to state that the level of volatility in the stock is reason to stay on the sidelines, but you are now making it sound like AAPL's business model has made a change for the worse. I really think the whole margin compression thing is seriously overdone and as comments above outline it is questionable whether the iPad mini will cause margin compression. I think they are making headway into a whole new market and it should prove to be a very good strategic decision.
    Dec 9 02:21 PM | Likes Like |Link to Comment
  • Apple's Decline: Thanks, iPad Mini [View article]
    Ashraf the trouble I have with this piece is that you change your mind every 30 days.

    Not too long ago INTC was a great buy, then it was AAPL will outperform INTC, now even the mighty AAPL isn't all that exciting. I think you are letting price fluctuations overwhelm your better judgement. I don't see how anything is different for AAPL now compared to 60 days ago, except for the price being cheaper.
    Dec 9 01:01 PM | 1 Like Like |Link to Comment
  • Don't Fear Margin Compression: The Apple Sell-Off Is Overdone [View article]
    I don't think anyone outside of Google knows the answer to that question. A big anticipation of the Oracle vs. Google lawsuit was that some were anticipating discovery would force disclosure of that fact.
    Nov 22 12:05 PM | Likes Like |Link to Comment
  • Don't Fear Margin Compression: The Apple Sell-Off Is Overdone [View article]
    I don't think it's the clueless retail investors who push AAPL stock up and down. Rather it is the clueless institutional and hedge fund investors who have just set up a great buying opportunity.
    Nov 20 08:32 PM | 4 Likes Like |Link to Comment
  • Don't Fear Margin Compression: The Apple Sell-Off Is Overdone [View article]
    I have to admit that I don't own a single stock that I expect to quadruple within the next 5 years, so perhaps we have different investment philosophies.

    A 400% gain from a market cap of $500B is difficult to imagine, but getting back to 700 seems to be a reasonably conservative target within 12 months. From today's closing price that would represent a 25% annual return. Was AAPL a good buy at 700? Probably not, but in the mid or low 500s it looks pretty good to me.
    Nov 20 07:15 PM | 4 Likes Like |Link to Comment
  • Don't Fear Margin Compression: The Apple Sell-Off Is Overdone [View article]
    I submitted the article on Sunday, it took a bit before the editors let it through.
    Nov 20 06:52 PM | 3 Likes Like |Link to Comment
  • Is It Apple, The Fiscal Cliff, Risk Aversion, Or All Of The Above? [View article]
    I think what the fall of AAPL shows is how over invested a few funds are in the stock.

    If you want to take any investing lesson from this experience it should be this: avoid stocks that any man on the street could name for you. AAPL would be first on the list, followed by GOOG or perhaps T and INTC.

    None of these have done well for me lately, but no name stocks I own like MYL, MCK have done fine.

    I guess the other lesson is: take profits and fundamentals will not save you. Rallies are shorter and corrections will run deeper than you think, especially for high profile stocks. The market is not a discounting mechanism, it is an overreaction machine. Expect over reactions: the way to profit is after they have happened. There will be easy money to be made in AAPL once it starts to rally again: over reaction then resolution back to the mean.
    Nov 8 07:41 AM | 1 Like Like |Link to Comment
  • Dead Money Walking: Sell PC Players And Buy Apple Before It's Too Late [View article]
    I would say having consumer loyalty is one of the hallmarks of a great company. Some people love NKE shoes and pay more for them. Consumers love Coca-Cola, so that company get rich by selling bottled sugar water at a huge markup. Customer loyalty is a huge asset for AAPL, regardless of whether you think it is placed correctly or not.

    I own a droid and I am not an Apple fanboy, but I will say that Apple has done a tremendous job of making products that are super easy to use. I switched to a Mac in grad school (in large part because I was terrified of losing a 500 page thesis to the blue screen of death) and it's so great never having to reinstall my operating system and everything just working like it's supposed to. When I upgraded to a new computer, time machine automatically loads everything just like it was on my old computer. I'm sure a PC junkie would say you can do that on a PC too, but as a non-computer whiz it's not that easy.

    Not everyone is a computer expert. Ease of use creates consumer loyalty and a strong brand.
    Sep 11 06:33 PM | 3 Likes Like |Link to Comment
  • Dead Money Walking: Sell PC Players And Buy Apple Before It's Too Late [View article]
    I disagree, I don't know anyone who has completely abandoned the PC for tablets. While in poorer countries many only own a cell phone, I do not believe that we will enter a new paradigm of exclusive tablet or phone usage. Nearly everyone still owns a PC for work or personal computing, tablets are a welcome second addition, but I don't think they will be a transition. They are a great to meet you "walking around" computing needs, but having a mouse and keyboard is still an essential staple.

    The author is correct that AAPL is a great investment, but MSFT isn't too bad either. INTC will be fine as well. Both will probably underperform AAPL, but in a diversified portfolio both are still worth owning. I am more pessimistic about DELL and HPQ, the author may be correct that these are dead money.

    Please stop with the statements that a single revenue miss means the end of a business that has done fantastically well for 30 years. The hyperbole is really getting to be a bit much. Even AAPL's last earnings report was weak.
    Sep 9 01:56 PM | 6 Likes Like |Link to Comment
  • What Will An Apple Bubble Look Like? [View article]
    You are assuming there will be an AAPL bubble. I doubt it, but it should still beat the SnP. It's a great growth story at a fair price, hard to beat that.
    May 2 05:41 PM | 4 Likes Like |Link to Comment
  • Apple: Here It Comes [View article]
    Actually bought a year ago for 330ish, feeling just fine, thanks.

    Every parabolic buying frenzy has to have some profit taking, you just don't know when. You don't sell a stock with a great business model that is up 100% in a year because it went down 3%. Probably tomorrow it will be up 3%, who cares?

    If by the end of the year they close below 500 you can have the last laugh.
    Apr 19 09:02 PM | Likes Like |Link to Comment
  • Apple: Here It Comes [View article]
    Agree, but as those costs are passed on some consumers may be more motivated to buy an android instead.

    That was the supposed story behind the recent drop. But when you look at the numbers the concern doesn't seem rational. We are talking 30 bucks extra. I think most iPhone users would gladly pay the extra for a better phone.

    I'm not saying I think margins will compress, just that if AAPL ever went lower on a sustained basis this would be the most likely cause. KD's speculation on a competitor is great contrarian advice, because the more you think about it the more you realize they have no real competition.
    Apr 18 07:51 AM | Likes Like |Link to Comment
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