Search This Blog

Monday, October 18, 2010

Keep in mind... IBM, AAPL

AAPL and IBM report today. They have had tremendous moves, but what the stock did, and what it is about to do are very different things.

AAPL - With today's report AAPL will have a trailing earnings of 14.54 (assuming the est. 4.03 for this quarter, along with the three previous: 3.51, 3.33 and 3.67).

If AAPL takes a hit for the report, and approaches 300, its PE will be 20.69. Too low for such growth. I will be a buyer.

If it rallies, great. I will let the remaining ride until AAPL hits a trailing PE of 22 or the SP500 approaches 1195. (Will look to buy back after the market consolidates.)

IBM - Will have a trailing earnings of 10.92. (assuming the est. 2.75 for this quarter, along with the three previous: 2.61, 1.97 and 3.59).

If IBM takes a hit for the report, and approaches 138 or so, its PE will be 12.63. With the market multiple approaching a normal level, IBM's low end multiple is 14. I will be a buyer.

If it rallies, great. I will let the IBM position ride until it hits a trailing PE of 14 or the SP500 approaches 1195. (Will look to buy back after the market consolidates.)

No comments:

Post a Comment