Wednesday, December 30, 2009

AAPL Apple Inc

AAPL  Apple Inc

The portfolio’s history with Apple goes back many years. In 04-05 I had some in the 35-45 range but though it was too expensive by the time it hit the 60s and got out. I got in again in the 50ish range in early 06 and got out again by November when I thought the entire market was overheated. But most recently and in this trading cycle, accumulations began in June 2009 at the 136 range. Despite the fact I had enjoyed iPods and Shuffles, and iTunes, there was no compelling reason for me to check out AAPL because after all I was a PC guy. I would have to say Cramer got me to look at the company as an investment. After doing the research, it was very impressive at how competitor proof the iPhone was. More importantly with the open source approach to programming for iPhone and iPod apps, it was easy to see how this was going to explode and more importantly the obscene margins involved in the down loadable app market. That is when I had gotten in after doing my homework and rating the company a 94 on my value based rating system described in this blog on many posts. As of this writing at the end of 2009, they just had a marvelous last quarter reporting in October. They blew away analysts estimates by 26 %. They have no debt. Their global expansion is on schedule with tight contracts with mobile carriers in many emerging markets, but of note is China Unicom (CHU) the second largest mobile carrier in China and an agreement with Vodaphone which should give them great coverage in the UK parts of Europe and in South Africa. Some say the company is running rich with a forward looking PE of 27, but with the expansion of the iPhone market, the exponential growth of the downloadable app market and the yet to be released Apple notepad, earning growth appear to be quite attainable. As of this post, the stock is selling for its 52 week high of 213 a share. It accounts for about 10% of the Salve Lucrum Portfolio and is up 11.2% since its last purchase. (It should be noted that a poor decision to use trailing stops on the stock triggered an unintentional total sell off in October at the 190 price creating a splendid profit but an unnecessary tax gain. Since then the account has been slowly reestablishing its position in AAPL.) Thought there are stops in place, I am looking for a 250.00 price pint in AAPL, by mid year 2010.

Dec 30, 2009 WSJ

Nokia alleges that "Apple infringes Nokia patents in virtually all of its mobile phones, portable music players and computers."
In its fiscal fourth quarter, Apple sold 7.4 million iPhones, up 7% from a year earlier. In October, Nokia said its sales volume dropped 8% to 109 million phones during the third quarter.


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