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Wednesday, January 25, 2012


Congrats to those who held the stock! Now that the enthusiasm is out of the way, lets be realistic.  Here are some interesting valuation facts:

1. Below 454, AAPL is trading with a trailing PE below 10, if cash is excluded.

2. Below 456, AAPL is trading with a trailing PE below 13. (At 446, its making a new low w/respect to trailing PE. Here the anticipated price band if AAPL is to trade between a PE of 13-14.

3. AAPL's tone regarding their cash is very different from the past. Seems like they will do something soon.

4. Subscription revenue growth (via iCloud and TV).

Assuming Apple plays its cards right, like issuing a +2% dividend, the above three things is a powerful combination that will facilitate the value investors to come into this stock. This should allow the multiple to trade in similar fashion to other large cap stocks.

As for how I traded AAPL today, I unloaded all options in the AM due to the volatility the spike caused, but still own the common. I simply can not sell the common with # 1 and  2 (listed above) in play.

(I don't care that it spiked, its still just too inexpensive. The stock should be trading near 490, but I am willing to unload near 460.)

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