Monday, 10 December 2007

Selling some Apple at the 52-week high

Today looks like a sweet entry point to get short some Apple. I sold just under $20,000 worth at 194.07.

Seems like the equity market is enthralled with Apple...from trading at 50 at one point last year, it's now a shade off 200...I mean what wasn't out there last year? Everyone had an iPod already. And the iPhone was always rumoured back then also. Anyway, from what I gather, the iPhone may be doing OK in the US, but it certainly hasn't hit it off in Europe, with disappointing sales and not much consumer enthusiasm for the poor terms of the contract you have to enter (longer than standard mobile phones, eg. 18 months in the UK as opposed to 1 year for normal phones), and not on a 3G network.

Trading on a P/E of ~50, a forward P/E of 30, so even if it hits ALL its numbers next year, it still won't look cheap. $170bn market cap, to justify that you have to sure this company has the potential to earn $10bn a year over the long-term MINIMUM. Now, we all know that technology can be a fickle sector...all it will take to destroy this stock will be an earnings miss, a bad prouct, and analyst euphoria disappearing. Selling some at the 52-week high seems low risk at this point.

How do you like that?


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