If you compute the value of the stock from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates, APPL would have a fair value of about 65 to 66 per share! 65 to 66 per share would place it about 5 points below the 50EMA-- which is unsafe to hold a long position, unless youre willing to hedge your shares with either puts of covered calls?!
The relative value of APPL, which is an indicator of long-term price appreciation potential, is about 1.45 out 2.00. This level is considered excellent, and this indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks.
Now, AAPL has annual sales of $13,931,000,000 . Sales Growth is the Sales Growth Rate in percent over the last 12 months. AAPL has a Sales Growth of 56.00% per year. This is excellent. However, I don't believe these sales growth percentages can be sustained any longer, as consumer spending slows in rise of oil prices and inflation. Innovation has its limits.
Technically, the 1 year chart couldn't look any better... The chart resembles poetry in motion. No outer bar reversal... the uptrend is intact.
In conclusion, there seems to be a disagreementt between what technical and fundamental analysis are telling me. One could say that AAPL is in irrational exuberance mode. Therefore, I'd rather play its technicals and trade it ruthlessly, rather than end up holding an empty bag some day.
The company reports earinngs next week, and the stock has already factored in the increase in revenues and earnings as announced 3 days ago by Jobs. I don't see a further catalyst here. I would buy on a pull back if youre not willing to buy and and hedge your shares.
Good luck.
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