Apple:12 Reasons Why The Fat Lady Hasn’t Sung Yet

Apple:12 Reasons Why The Fat Lady Hasn’t Sung Yet






I believe the imminent death of the Apple up trend has been greatly exaggerated. The hopes that it will crash and trade at an 8 P/E or be worth only 4 times cash on hand is a very low probability event. The extreme bearishness is simply absurd based on fundamentals, and I am not even a fundamentalist, I trade price trends. ( I am not an Apple fan boy, I will short it at times, like Thursday and Friday.) This is not like Cisco in January of 2000 trading at 100 times earnings before it collapsed or Microsoft trading at 41 times earnings at the end of 1999. Those are examples of bubbles, huge earnings expectations priced in and a run away bull market. Apple is not a bubble, it’s handicap of size is priced in with a 15 P/E even with its 74% annual earnings growth. What we are now trading is a value stock in the tech sector with a declining P/E year after year that only grows with real earnings and book value. This stock is an investment not a speculation, these are the kinds of stocks I trade the best because the downside is very limited and the up side for now is open ended. The key is buying it at the right time in an up trend and going to the sidelines during corrections.

Here are 12 reasons to be a long term bull on this monster stock.

Let’s get some perspective on this Apple movement:

  1. We are about 13.5% off its high of $705. This is a normal correction for a growth stock after a big run up in price.

  2. In the past three years the 200 day moving average has been the best risk/reward buy point for traders & investors. We are $30 away from this key support level.

  3. Apple still has the hottest technology in its sector with the iPhone 5, iPods, iPad, Macs, and possible iPad mini.

  4. Apple still has an amazing network that feeds off itself with iTunes and Apps.

  5. Apple’s sales and earnings growth expectations will likely get back on track during the Christmas season as it does every year.

  6. Apple has $100 billion dollars of cash on hand which combined with its low P/E ratio and growth could attract many value investors.

  7. We still have a buy back that will help as support and reduce the outstanding share float.

  8. The markets overall are still in an up trend in the long term time period and the indexes are currently at the 50 day support level.

  9. The 200 day Apple buy area is the #1 spot I have wanted all year in any stock at any level.

  10. One of the greatest inventors & entrepreneurs of our age: Steve Jobs still has his foot prints all over the company.

  11. Apple is one of the few companies that one of their biggest problems is making and shipping product fast enough due to excessive demand.

  12. If Apple was a $63 stock instead of $630 Friday’s move would be $2.28 instead of $22.80. The size of the stock makes moves seem bigger to many traders than it actually is.

Apple:12 Reasons Why The Fat Lady Hasn’t Sung Yet