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JimVanMeerten (57.35)

Apple - Most likely to succeed?



March 26, 2011 – Comments (2) | RELATED TICKERS: AAPL

Apple (AAPL) kind of reminds me of the kid that everyone voted in high school as Valedictorian or "Most Likely to Succeed".  Those awards always seemed to be the kiss of death  That poor kid was all things to all people and there was no way s/he could live up to the expectations every one had for them.  Well that reminds me of Apple (APPL).  The stock is every one's darling.  The most rated stock on Motley Fool - my barometer for general investor interest and sentiment and one of the most widely followed stocks on Wall Street.  I hope you aren't looking to me to tell you what to do.  This article is based on my memories of Dragnet.  When a witness would ramble on with all sorts of unrelated opinions then good old Sargent Joe Friday would say "Just the facts Ma'am".

That's what I'm going to attempt - Just the facts.

Let's start with a five year chart of the weekly price vs the 20, 50  and  100 week moving averages -- shows a slow and steady increase.

Now let's look at my normal analysis pattern.  First the technical indicators from Barchart:

1 - 80% short term technical buy signal

2 - Trend Spotter presently has a sell signal but if the price keeps increasing that gap is narrowing quickly and may be switching soon

3 - The price hit 5 new highs and is up .97% in the last month

4 - Relative Strength Index is 54.75% and increasing

5 - Trades around 351.94 with a 50 day moving average of 346.81

Fundamental Factors:

1 - Wall Street brokerage analysts have released 28 strong buy, 22 buy and 4 hold recommendations for their brokers and clients to follow

2 - Sales consensus is for an increase of 53.20% this year and 17.80% next year

3 - Earnings are forecasted to increase by 51.40% this year, 15.30% next year and 20.53% annually for the next 5 years

General Investor Sentiment:

1 - This is one of the most widely followed stocks on Motley Fool with 30,645 members chiming in on it.

2 - The CAPS members vote 23,453 to 2,099 that the stock will beat the street

3 - The more experienced All Stars vote in the same direction 4,804 to 249

4 - Fool tries to follow reports and articles released on stocks and notes that all for the last 51 articles have  been positive  

Well those are the facts but Apple (APPL) still reminds me of the kid everyone expected too much of.  One bad earnings report or a negative guidance call can send it into a tumble

My opinion:  Apple (APPL) is more than a company.  It's a for profit think tank with Steve Jobs at the helm.  In a think tank there are lots of brilliant geeks with out of the box almost science fiction ideas.  Jobs has been able to put together teams each with a very different perspective and make it all work.  The Geeks who come up with what is possible, the Pragmatists who can tell what ideas have practical applications and the Number Crunchers and Industrial Engineers who figure out what there is a craving for and which can be produced and marketed at a profit.

Is Steve Jobs the catalyst that makes the equation work or is he just the pretty face out front?  The answer to that question is the enigma.

Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs  in his daily blog -- Barchart Portfolio Blogs.

2 Comments – Post Your Own

#1) On March 26, 2011 at 6:41 PM, ikkyu2 (98.20) wrote:

Is Steve Jobs the catalyst that makes the equation work or is he just the pretty face out front?  The answer to that question is the enigma.

You know the experiment to answer that question was performed, of course? 

May 1985 through July 1997, the company was under different (non-Jobs) control.  The stock chart before, during and after that interval pretty much speaks for itself.

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#2) On March 27, 2011 at 1:53 AM, G8BigBoom (65.78) wrote:

what do people think of all the followers like microsft that can follow a idea and then beat it with a better product. I good example would be the I-pod VS the Zune. The zune is by far the better product and soon the same will come for the I-pod and I-pad. Will not soon these off-brands hurt apple?

Just an idea but i am most likely wrong


PS- 6 drinks in LOL

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