AAPL: The Coiled Spring

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    Posted: 09 July 2011 07:15 PM #46

    $6.80 should mean weekly holders have a decent chance of an early holiday present on July 20th, provided AAPL doesn’t run-up to, I dunno, 400 or so.  (And even then, the post-earnings P/E at EPS of 6.80 would only be 16.5!)

    My plan is to gamble with some pocket change, fully aware that I could lose it all (and I’ve lived through that more than once!).  But I can’t help but feel pretty good about the side bet, considering AAPL’s valuation.  The Chitikameter’s current readings are very encouraging.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 09 July 2011 07:42 PM #47

    mjuarez - 09 July 2011 08:51 PM
    Mav - 09 July 2011 07:40 PM

    Back on topic…is the spring uncoiling to take AAPL past 360 next week?  Or will AAPL kinda settle around the 350-360 range until earnings?

    At $360, and if AAPL makes roughly ~$6.80 this past quarter, the stock will be at a P/E of 15 again… which we were at not 3 weeks ago.  Hopefully, it will at least stay above 16, which is roughly $390. 

    I can see AAPL going into the 17-18 P/E area sometime between October and January, but not before.  At that point, P/E of 17 will be, assuming $29 TTM EPS, about $490.

    I have come to terms that the P/E is just a multiplier. There is no reason that it has to remain 17+. With earnings growing this rapidly the P/E compression will continue to occur. I expect that P/E will be 11-14 range in 2013.

    Although it’s a shame that AAPL’s P/E is below GOOG and ORCL. I am not pessimistic but have lost enough money believing that AAPL P/E cannot go below 20 with earnings growth of 70%.

    I do believe it will get to 450 by next summer however higher would be harder in 2012.

         
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    Posted: 09 July 2011 08:14 PM #48

    Let me guess.  You didn’t see AAPL getting to 360 by this time of year?

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 09 July 2011 08:20 PM #49

    Mav - 09 July 2011 07:40 PM

    Back on topic…is the spring uncoiling to take AAPL past 360 next week?  Or will AAPL kinda settle around the 350-360 range until earnings?

    I think we bang up against the ATH on Monday or Tuesday, but there will be strong resistance there and we will end the week around 360.

    But the following week, after earnings are digested….resistance is futile!

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    Posted: 09 July 2011 08:30 PM #50

    AT, you have no idea how much I’d like my Jan 12 $360 calls to be $140/contract. around January.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 09 July 2011 11:15 PM #51

    Mav - 09 July 2011 11:30 PM

    AT, you have no idea how much I’d like my Jan 12 $360 calls to be $140/contract. around January.


    Since Jan 360/370’s are my largest LEAP holdings, I concur Mav. :innocent:

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