Jan 2014 LEAPS & Price targets

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    Posted: 30 April 2012 12:29 AM

    Here is a thread for those of us who have positions looking a bit more long term than day trading…

    I’m currently 80% positioned in 2014 LEAPS, and at their current values most of that is in $530 calls, but I also have quite a few $900 calls.

    I’m expecting apples earnings per share in Jan 2014 (trailing twelve months) to be $100 per share +, and have approximately $180-$200 billion in cash (depending on apples dividend payout increasing or not).

    I like to use a bottom Share price target of 10xP/E+Cash, which would give us approximately $1250 per share in Jan 2014.

    A reasonable price target at the higher end would be a simple P/E of 15, which would give us approximately $1500 per share in Jan 2014.

    Given a price target of $1250 - $1500, I feel comfortable with my large $900 call position, and am hoping for a ballpark 1500% to 3000% return on that investment.

    Anyone else care to chime in with their thought for Jan 2014, be it earnings predictions, price targets, or investment techniques?

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    Full Disclosure:

    - Long Apple
    - Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics

         
  • Posted: 30 April 2012 12:33 AM #1

    I also own a bunch of ~800 strike 2014 leaps. Every 3 months I sell the highest call 3 months out against these leaps and purchase another leap or two.  I hope you are right about the $1500 price as I’ll be retired. smile

         
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    Posted: 30 April 2012 01:11 AM #2

    For JAN’14, I’ve been legging into 750/800 bull call spreads.  BTO JAN’14 750s, then STO JAN’14 800s for any amount greater than the cost of the unhedged 750s.  Rinse and repeat.

         
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    Posted: 30 April 2012 01:13 AM #3

    I have five - FIVE! - Jan14 890/900s.  I blame rudyo. raspberry

    Cost basis, something like $90 per.

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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: 30 April 2012 01:20 AM #4

    LOL, Mav!!!

         
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    Posted: 30 April 2012 01:27 AM #5

    What’s LOL is I had a order in for more than five.  It just ended up looking like Rudyo’s side bet from last year because that’s all I could buy, even with GT 60 terms!

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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: 30 April 2012 01:34 AM #6

    I’m a big fan of DEAPs with most of them in 2014. Have a spread from 280 to 350 strikes. I might venture into OTM LEAPs when aapl trades sub lower bolie band.

      cheers
        JohnG

         
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    Posted: 30 April 2012 02:01 AM #7

    Burgess - 30 April 2012 03:29 AM

    ....
    I’m expecting apples earnings per share in Jan 2014 (trailing twelve months) to be $100 per share +, and have approximately $180-$200 billion in cash (depending on apples dividend payout increasing or not).

    I like to use a bottom Share price target of 10xP/E+Cash, which would give us approximately $1250 per share in Jan 2014….

    Your method for a bottom share price target seems much more conservative than your minimum eps target.

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    Posted: 30 April 2012 02:06 AM #8

    Well, we’d need to see a cash projection first, in fairness.  Apple getting to $130B in cash this fiscal year, before the divvy?  Could well happen.  That cash pile will get bigger even with the dividend payout.

    Signature

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

         
  • Posted: 30 April 2012 09:54 AM #9

    Our largest position is Jan 2104 $600’s.  Cost basis is 62.88

    I think AAPL could be somewhere in the $1,000-1,300 range at the end of FY 2013.

    We really like this position smile

         
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    Posted: 30 April 2012 11:01 AM #10

    I am a newbie to LEAPS. Started building positions in February of this year. My LEAP portfolio is comprised ~ 1/3 and 2/3 of Jan 14 $600 and $700 respectively. The average costs were $105 for the $600’s and $44 for the $700’s.

    $1200 per share sounds good to me.

         
  • Posted: 30 April 2012 11:27 AM #11

    Burgess - 30 April 2012 03:29 AM

    Here is a thread for those of us who have positions looking a bit more long term than day trading…


    I’m expecting apples earnings per share in Jan 2014 (trailing twelve months) to be $100 per share +, and have approximately $180-$200 billion in cash (depending on apples dividend payout increasing or not).

    Excellent thread!

    I can’t see AAPL EPS trailing at that time over $90, but with this one surprise has always been on the upside.  So if that’s the case the lower price would be closer to $1000-1100.

    From Leaps, I’m mostly in 700’s and 740’s but would get in DEEPS if aapl revisits 550s again.

         
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    Posted: 30 April 2012 07:02 PM #12

    mstefa - 30 April 2012 02:27 PM
    Burgess - 30 April 2012 03:29 AM

    Here is a thread for those of us who have positions looking a bit more long term than day trading…


    I’m expecting apples earnings per share in Jan 2014 (trailing twelve months) to be $100 per share +, and have approximately $180-$200 billion in cash (depending on apples dividend payout increasing or not).

    Excellent thread!

    I can’t see AAPL EPS trailing at that time over $90, but with this one surprise has always been on the upside.  So if that’s the case the lower price would be closer to $1000-1100.

    From Leaps, I’m mostly in 700’s and 740’s but would get in DEEPS if aapl revisits 550s again.

    My target is based on the introduction of at least one new product line within the next 12 months, which would most likely be the Apple HDTV - without that I agree that EPS would be closer to $90 than $100 (unless apples share buyback program was upgraded significantly.)

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    Full Disclosure:

    - Long Apple
    - Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics

         
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    Posted: 30 April 2012 08:07 PM #13

    Mav - 30 April 2012 04:13 AM

    I have five - FIVE! - Jan14 890/900s.  I blame rudyo. raspberry

    Cost basis, something like $90 per.

    .90 each?  You actually bought them??? I was just kidding when we were talking about them! wink

    Looks like you are already up on them, hope I get “blamed” for the profit too! grin

    Edit: Oh and I still have my Jan13 vertical side bet.  I messed up my signature and was too lazy to fix it. It is only at a lousy 217%!

    [ Edited: 30 April 2012 08:19 PM by Rudyo ]

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    Jan13 $600 or BUST! LEAP Spread Trial: Bought Jan13 590/600 BCS @1.45 on 9-21-2011
    Max Profit: 689%  Current Price:
    4.50 +210% as of 5-2-2012 - Woohoo! Finally Green!

         
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    Posted: 01 May 2012 03:17 AM #14

    60/40 between $700 and $900 calls. New to this so no spreads for me yet. This is considerably more entertaining than stocks. Been holding for so long, it’s interesting to make shorter term gain plans.

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    Long AAPL Short ME 5’3

         
  • Posted: 01 May 2012 12:05 PM #15

    A nice feature of 2014 LEAPS is that days like yesterday are not all-consuming events.

    Just another wee bump in the road for the moderately experienced Apple investor