Is it time to buy or sell stock in Apple Computer?

“There isn’t much argument about Apple Computer’s bright future. The incredible popularity of the company’s iPod digital music system is just beginning to translate into higher earnings growth, say the bulls. And the current iPod craze could spill over and generate interest in Apple computers among new buyers and defecting PC users alike. ‘The remarkable satisfaction with the iPod creates a word-of-mouth wildfire,’ says a recent report from Piper Jaffray,” Anne Kates Smith writes for Kiplinger.com.

“You’ll find plenty of disagreement, however, about what to do with the stock, which more than doubled between August and December… For now, we’d hold back on any purchases. And investors with short-term horizons should consider cashing in some profits, particularly if the stock is held in a tax-deferred account or you can offset your gains with losses,” Smith writes.

Full article here.

18 Comments

  1. I bought some at 20, some at 30 and then some at 65 right after I saw the Mac mini in the keynote. Still making money on all three and anticipate making a lot more. Only wish I would have bought more at 20. Oh well, at least I am in the game this time and will be able to use the earnings (if I can ever bring myself to sell – emotional attachment is a problem) to buy a G5 something (not sure what yet, was holding out for a G5 Powerbook but don’t know if I will be able to last that long). I am pretty confident that it will be going to over 100 within 2005. The Mac mini is gonna be HUGE.

  2. The stock will continue to rise, unless it continues to drop. Probably some of both, but more of one than the other. Which one? Time will tell. Consult the Magic 8-Ball again later.

  3. For years I wanted to buy some Apple stock to prop up the company I believed in, yet didn’t have the spare cash (student/family). Finally, at $55 I bought 28 shares. Tiny I know, but now I’m glad I did. Do I believe it will increase? As Long as I keep buying new Mac stuff then it is likely others will too, so it will grow, and I just bought our fifth Mac – you guessed it, a mini!

    I recommend Mac addicts buy AAPL shares – it is so easy nowadays, but beware the broker fees.

  4. Well there you go, ask and ye shall receive. Apple just announced it is doing a 2-for-1 stock split, effective Feb 28th! A (relative) share price of $40 or so will make it much easier for market players to get their head around the price, even though in fundemental terms it means very little.

  5. While the announced 2:1 split is not that suprising, the timing of the effective date is. Two weeks is rather uncommon.

    It makes me wonder if this was pushed because of the timing of other significant announcements that may be coming in March or April that would push the stock up further, and Apple wanting to get the stock $ value way down below technical and psycological resistance levels.

    Maybe there is something coming with Sony, the Cell chip, or osx on intel?

  6. critic – yeah that’s an excellent point actually! I’m long AAPL with 5000 shares at the moment, from $54. I think this next quarter might be a bit bumpy what with gross margins probably showing a decline due to the lower profitability of shuffle and Mac Mini, but increasing iMac sales might help offset that. The Street doesn’t like lower gross margins, whatever the positive upside elsewhere.
    Conversely though, great sales figures of the new products, and iPod sales showing they can hold up after Xmas, would help the stock consolidate its gains and pave the way for a huge leap forward following June’s quarterly results which will include a full quarter’s Mac Mini and Shuffle sales figures. June’s results should be stellar, especially coming hot on the heals of the imminent launch of Tiger, and whatever other new products are announced around that time.
    Interesting times!

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