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.)
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