Apple Touches $600, what is Next?
It sounds like a broken record, another day, another new high for Apple’s (NASDAQ: AAPL) stock. After crossing $400 on December 23, $500 on February 13, and $550 on March 12,Apple touched the $600 mark in pre-market trading this morning— though it pulled back in early regular trading. Apple is still trading well above its 200, 100, and 50-day moving averages, gaining roughly 65 percent for the last 12 months compared to an almost 7 percent gain for Google (GOOG), a 10 percent gain for the overall Nasdaq100 (NASDAQ:QQQ), and a 40 percent decline for Hewlett-Packard(NYSE:HPQ).
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Apple’s stock has benefited by the last profit report that exceeded analysts’ estimates by a wide margin, easing of concerns over leadership transition after the loss of its legendary founder Steve Jobs, and the introduction of new products. In the meantime, both Apple and Google have been gaining market shares against Research in Motion (NASDAQ:RIMM) and Nokia(NYSE:NOK)—Apple has been particularly strong in Asia, where it maintains the unquestionable leadership against its peers. What is next?
As we did write in a previous piece, Apple’s stock rapid ascend has fueled a wave of robust forecasts that call for Apple to reach $600, $800, even $1000 that hype investor expectations feeding into a speculative frenzy that parallels similar predictions for Cisco Systems (NASDAQ:CSCO), and Hewlett-Packard(NYSE:HPQ) back in the late 2000. We all know how that frenzy ended. That’s why we aren’t going to join in the chorus.
Instead, we should point out that even after this big run up, Apple trades at a Forward PE (fye Sep 24, 2013) of 11.54. This means that the stock is still inexpensive compared to Google and the Nasdaq100. Apple is firing on all cylinders, with its Mac products gaining in popularity among corporate users, and its iPhone 4S gaining popularity in Asia-Pacific, where Apple has a huge room to grow, both in the short-term and in the long-term; and still has a host of new products on the pipeline to capture and captivate its customers’ imagination.
Long on AAPL
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