Monday, July 18, 2011

Apple Hits All Time High, Just the Beginning?

Apple (AAPL) hit an all time high today over $374. Ok, so its not the beginning since the stock was only $80 during the great recession and much lower in the early 2000s. Still AAPL appears to have plenty of room to run considering the forward PE based on typically overly low analyst estimates is below 13.

JPMorgan (JPM) made a call to buy August $365 call options to position for potential upside ahead of the company's quarterly earnings. A very unusual call and one that concerns us that AAPL will see a pullback after the earnings report. The stock has already soared from $310 to current $373 price in less than a month. Though it did breakout of stiff resistance in the $350-360 range suggesting major upside possibly to hit the JPM target of $450.

The high 2012 earnings estimate is $33.30. A modest 20 PE would suggest a $666 stock price. Hmm, maybe that will the signal to sell.

AAPL has been a long term hold in our models going back to the beginning. See the Portfolio Management page for more details on the models Stone Fox Capital offers. As far as AAPL, it's a core stock to just hold until the gravy train runs out. Don't be foolish to Buy & Hold for eternity, but clearly it's a company to hold until the story peaks out.























Disclosure: Long AAPL in client and personal accounts. Post is provided for informational purposes and should not be relied upon as financial advice. Please review the disclaimer page. 

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