Food for thought re Apple

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So, the results came and went. We traded it well – exiting the stock after hours at $418 and being flat now ready to buy down again.

The chart below struck me as interesting which is a measure of the stocks relationship to its book value over the last 30 years. The late 90’s you almost have discount as the stock was priced for bankruptcy at its lows before Jobs was re-installed.

Although guidance out of the co was poor in the results yesterday and the forward multiple has risen towards a likely 10 times for 2013 (before stripping out cash) now, the ratio to its book value looks to be squarely back in the buy zone to me. Throw in the fact that we are very close to the 200 day sma centred around $375 and a lot of people are looking to buy there and I think it is time to start building a position between here and down to say $380.

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