Yeah, I look at them, but I don't have any doctrinaire rules about them.
Apple is a company I have followed for 7 years, so I know it better than most. I invest in / speculate in a limited number of companies, so I don't do a lot of looking :).
One of the primary things I look at is growth prospects. Apple's were fracked for quite some time and I did not hold any for quite a while. I went back in as of April of 2003, and wish I had held on to all those shares longer than I did.
Apple seems expensive now, but I think their growth prospects are excellent. Even with all the increased earnings and rev forecasts since AAPL blew away estimates in Jan, 05, I think the estimates remain too low, for several reasons:
1) I believe we will see an iPod halo effect on the sales of Mac computers. I think it has started to show up and will be confirmed in Q4 2005 (July -Sept) and more heavily in the Q1 2006 (Oct-Dec quarter). I have seen results of three surveys (of widely varying quality) plus multiple store reports and other anecdotal evidence suggesting that early signs of an iPod halo effect are showing up. If it does, given Apple's dominant position in the rapidly growing MP3 player market, it bodes well for the company. While some naysayers see iPod killers everwhere they turn, none have shown up yet. Given the projections for growth in the MP3 player market, Apple could lose some market share while still experiencing robust growth in units sold.
2) New product introductions, including a videoPod and an on-line video store - and probably iHome, a home entertainment hub/server, a wireless iPod and perhaps an iPhone are all possible, some more likely than others. Contracts are reported to have been signed with a British company - now a unit of Broadcomm - for the chips that could drive the videoPod. The reports stated that production of such a device could occur in late 2005, which would make an introduction at MacWorld in January 2006 possible.
3) Music, digital HD video, software and services will all make money for Apple, and the $500 Mac Minis will sell well. There is an outside chance that the Mac Mini will become a cultural phenomena ala the iPod. If that happens ....., but it will be a few quarters before we'll know about that.
4) the Xserve is getting some traction in the corporate world. Still pretty insignificant in terms of units sold, but sales are reported to be growing. Cisco is using some of them. They have gotten a lot of press as the building blocks for university-based supercomputers - See Virginia Tech's -1100 dual cpu Xserve node SystemX here:
Virginia Tech's original System X ranked number three in the world, after Japan's Earth Simulator and ASCI Q, the Los Alamos National Laboratory's dedicated weapons computer, on last year top 500 list. Analysts said Virginia Tech will get bumped out of the world's top-five ranking by supercomputers introduced by NNSA, IBM and others, but it could still be the fastest university supercomputer.
and one at - its either University of Chicago or University of Illinois-Chicago.
5) Some of the G4/G5 chip problems that Apple has experienced seem to either be resolved or near resolution, which may energize lagging PowerMac sales.
6) The introduction of OS X 10.4 (Tiger) in the first half of 2005 (as early as next week according to some reports) will drive software revenues up, and will get all those waiting to get it free on their new Macs will go ahead and buy their new computers.
I have a core position in AAPL now, but have sold 65% of the shares I held in December 2004. At that time I started doing an occasional options trade, and the six that I have closed out were all profitable I am holding some May and July calls, some of which I started selling last week - covering my initial cost on the all of one lot, plus a gain while holding onto 30% of of that lot. I suspect I will be selling some of the other three lots before the earnings report on Wednesday.
My model for this quarter has Apple beating average estimates, but it is, some say, richly valued and I'd rather take some profits on the calls before earnings than to risk a negative market reaction to merely meeting expectations or a small positive surprise. The risk-reward looks good enough to me to hold some of them through earnings, but I make a practice of taking some profits while they are available :) and I have been doing that with AAPL holdings since early February.
Sound a bit like old-fashioned company research, I guess. I do a tad bit of TA relative to the timing of the option trades - for entry points more than exit points. I am a novice at it and basically I just look at share price relative to moving averages, in this case I have been using the 50 day, which it just bounced off of last week. That may not really qualify as tad bit of TA, though :)
May be more than you wanted to hear, but there it is.
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