Home
Savings Rates
CD Rates
Bonds
Mortgage Rates
Home Equity Rates
Auto Loan Rates
Credit Cards
Brokerages

Apple Looks Great but I am selling with huge gains now

Article Submitted by: alexWoj
News


Tags: Iphone, Apple, Ipod, Imac.

Apple absolutely looks fantastic but I am selling. Here is why?

 

Submitted: Jul 26, 2007    Views: 996    Comments: 9    Likes: 35   


Apple just reported fantastic number.  It had quarterly net income of $818 million, or 92 cents a share, up from $472 million, or 54 cents a share last year.   Its numbers beat analyst consensus by 20 cents.  The stock is understandably way up and it is closing in on my $150 sell target.

I am not selling because my sell target has been reached (about 3 years ahead of schedule).  I am also not selling because I think that this is a little bit of a short-covering induced blip and I expect the stock to fall next week.  Rather, I am a long term investor and I am calling it a gain here for fundamental reasons.

Here is why:

Revenues, which rose 24% to $5.41 billion, were mainly driven by a 36% jump in Mac sales (they sold 1.8 million, well in excess of estimates).  Mac sales have done well, but are unlikely to grow dramatically higher as the price differential between a Mac and HP or Dell is just too great for iMacs to really take off.  As Ubuntu and other Linux-based systems become viable, Apple's growth from those frustrated with Microsoft will peter out.  I think that Macs will always be a specialized product for artistic sectors.  Apple's lost the battle 20 years ago.

IPod sales are not growing at breakneck speed any longer.  While Apple does have a hell of a franchise here, there are competing formats and competing players that offer more value for the money.  Apple's continued growth is dependent on much greater international growth and this is something that Steve Jobs has never done well.

It is impossible to reconcile Apple's reported sales of 270,000 iPhones with ATT's of half of that.  Now that I have used the device I really believe that it is nothing special in spite of my previous articles and posts on this topic on this site.  I don't expect Apple to meet their projected sales numbers on this.  The device simply is not that compelling.

Thanks for a wonderful run, Steve, and I have done tremedously well with your stock.  The time has come for me to sell and take my profits.


Sponsor Updates and Offers

Sign up for Zions Direct’s free weekly newsletter.

Get market information, CD and Bond auction updates, new-issue alerts and more.

Related Articles:



35

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

Mkhan
Mkhan

AT&T only counts activations, while Apple counted total units sold.

Posted: Jul 26, 2007

jefferson76

Just reading this article, I would think that you are a short, but then I read your previous postings on the site and you were in fact very bullish on the stock until now.

Posted: Jul 26, 2007

shaman78

This writer fails to take into account the huge number of Mac devotees that are still using PowerPC based computers that will need to upgrade to Intel based machines at some point. I am going to get a new laptop and a iMac within the next six month or after the new iMac is available. Mac use is expanding beyond the artistic and publishing community. Enterprise/business use is going up and I think Apple will make more of push in that direction. Macs are more popular with students especially college student. Also Leopard is going to be an almost radical OS upgrade and most Mac users will want it. Some of these people are still running 10.3. Regarding iPods, currently there is a lot of pent-up demand for a new iPod with touch screen and more capacity. I am still using a 4th generation unit myself and will get the new one as soon as it is available. The sales of the new iPod will dwarf
sales of iPhone. The foreseeable future looks pretty bright at Apple.

Posted: Jul 27, 2007

Frazer1

I agree with shaman about the PCs and the loyal following, but I think that there is a iPhone mania that needs to work itself off. I also believe that the iPod faces stronger competition that will soon cause prices to drop.

Posted: Jul 31, 2007

Frazer1

Specifically, the Sonos and the Sansa Connect pose a threat to the iPod and even potentially to Apple's music distribution model.

Posted: Jul 31, 2007

JessicaRH

Nice call. It is starting to look like Apple's best days are those just behind us.

Posted: Aug 13, 2007

David Gersh

At 37x times earnings with increasing competition to the IPod and loses of some ITunes programing, it seems like a good time to sell.

Posted: Sep 3, 2007

Jerry Green

It is going to 250 in a year. It is OK to step off the train, but why leave money on the table?

Posted: Sep 25, 2007

Carey Richardson

Dumb move. You are already kicking yourself and you'll be kicking yourself more with each passing day.

Posted: Oct 10, 2007



Add Your Comments:

Your Name:

Spam protection control:


© Copyright 2010 alexWoj All rights reserved. alexWoj has granted BestCashCow.com, LLC non-exclusive rights to display this work on Bestcashcow.com.

Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website's operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2010 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.