Tuesday, January 09, 2007

AAPL on the move

Did any of you listen to me and buy AAPL shares at $82.50????

They're at $88 and rising right now :)

And the iPhone is HOT!! This stock is going to $130-150 in the next months and double over the next year. As much as I dislike Apple products, this is the killer we've been waiting for.

If you'd have listened to me, you'd have made 10% on your investment in 3 weeks.


Anonymous said...

AAPL has appreciated very dramatically from about $11 on a current share basis (there have been share splits) exactly 3 years ago to over $92 this afternoon. It is up over $7 today on buying following the expected announcement of the I Phone. It’s obviously been a terrific return for investors who bought it and held it for the past 3 years as it has appreciated by over 700%. Apple has executed its consumer strategy exceptionally well with no missteps to-date. However at current share price it represents a multiple of 38 times 2007 earnings estimates. Furthermore, if they can hit their target stated today of selling 10mln phones in 2008 it could add about $6bln in incremental sales revenues. Some analysts are estimating a 30% profit margin which would imply an incremental $1.8 bln in operating earnings. Analysts tell me the stock has already moved enough today to discount about 75% of that incremental earnings.

Buying the stock could well work out nicely if the company continues to execute flawlessly. At 38 X forward earnings and after a 700% plus appreciation, the stock would be clobbered if they don’t execute well and investors decide it’s too expensive or estimates are too optimistic.

sanj said...

You are absolutely dead on the money with your comments.

Here's the simple version though, they will most likely make some major mistakes and the stock prices will stall or drop in the next 18 months. This happened before when the iPod was launched, the first gen was a failure and was underwhelming until they launched the iTunes store (2 years later). The phones will have problems, supply will be a problem and the carrier will have problems.

Apple will screw up but the market will forgive them (again). However, they will sell more of everything and their margins will stabilize or increase. They will correct the situation rapidly and the second, third and fourth gen phones will absolutly dominate.

Their sales will double (at least) and their multiples will maintain.

However, if their sales do not double in 2-3yrs, their valuation will float down to a level close to HP (P/E 19).

For the record, I first bought in 2001 and then again in December 06.

I screwed up and should have bought more each time.

Anonymous said...

for more on the iphone see: http://appleiphone.blogspot.com/