What is so stinking *magic* about $25?

  • Posted: 20 March 2002 08:56 AM

    APPL just keeps bouncing against that glass ceiling of $25/share. What would it take to drive it over that magic mark? I don’t get it. Apple is one of the few computer companies to turn a profit in these murkey times, they’ve unveiled what has got to be one of the coolest computers in the history of computing, they have actually put a usable face on UNIX and they’ve broken the 1 GHz mark. What more does the market want?

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  • Posted: 18 March 2002 12:32 PM #1

    What’s so magic about $25 per share? Nothing really other than it’s been a psychological barrier for investors. I’ve mentioned several times in the   daily stock updates thread that AAPL has to close decisively above $25.00 per share in order to establish a new trading range. AAPL has been treading water between $23 and $25 per share for quite some time.

    What’s limiting AAPL’s rise? A number of factors:

    It’s taken Steve & Co. five years to develop a discernable business plan please see the Apple and Microsoft: The Saga continues thread that the market can understand.

    Apple is only now firing on all cylinders in terms of a full hardware product line.

    Apple is not Dell. Dell’s approach to the market is “plain vanilla”. Apple continues to take educated risks that fly in the face of conventional wisdom. For example, opening retail stores in high-rent locations when it appears that Gateway can’t get a bricks and mortar strategy to work in suburban strip malls.

    Mac OS X is finally at a point that it will attract new users and carbonized versions of major OS X applications are only now coming to market.

    Currently, there is pressure on AAPL because of rumors about iMac shortages. Analyst financial models primarily drive the market. Current earnings reports are extrapolated into future periods, taking into account company forecasts and expectations (called guidance).

    Apple has stated that they expect sales in the education market to be soft this year because budgets and spending authority in most schools and districts was approved months before the economy began to show real signs of renewed growth. Education is one of Apple’s “bread and butter markets”.

    Should Apple miss its revenue and earnings per share forecasts for the current quarter due to delays in iMac production, it will impact earnings estimates moving until the completion of a quarter in which supply meets demand.

    This said, should Apple meet its original forecasts for this quarter and provide evidence of continuing demand for the new iMac, I expect the stock to move forcefully above $30 per share. Conservatively speaking (IMHO), I believe Apple is undervalued at anything less than $49 per share. But that’s my opinion

         
  • Posted: 18 March 2002 01:17 PM #2

    On 2002-03-18 16:32, DawnTreader wrote:
    This said, should Apple meet its original forecasts for this quarter and provide evidence of continuing demand for the new iMac, I expect the stock to move forcefully above $30 per share. Conservatively speaking (IMHO), I believe Apple is undervalued at anything less than $49 per share. But that’s my opinion

    I’d have to agree with what you’ve said. $25 is a psychological barrier and investors will need to feel Apple is a sure thing to bust through. What I’m scratching my head over is why that hasn’t happened yet. I guess I’m too optimistic.

    I do agree with you that APPL is undervalued below $49/share. Escpecially since my dollar cost average on those shares is $30!

     

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  • Posted: 18 March 2002 06:05 PM #3

    The most interesting thing to me is the fact that Apple is poised to “take off” as a major alternative to the Wintel world, and now *this* happens (by “this” I mean the iMac shortage—what will it be next time?).

    On a selfish note, I bought a lot of Apple stock back in 97-98 when it was under $20, only to sell it at $50ish. This time, I bought a lot at $17 and am holding on to it long term (this time).

    Waitin’ on the upswing, waitin’ on the upswing, waitin’ on the upswing, waitin’ on the upswing…

    It’s gonna happen.


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    <font size=-1>[ This Message was edited by: iBrotha on 2002-03-18 22:06 ]</font>

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  • Posted: 20 March 2002 08:56 AM #4

    Ha! We did it today. Apple topped $25.02 and that while the rest of the market is down.

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