Is Apple running out of juice? Nope
TweetFollow Us on Twitter

Is Apple running out of juice? Nope

Apple's explosive rally from near $350.00/share last November to well over $600.00/share earlier this month has left many traders talking about whether the stock is now in a bubble and whether it will burst. The answer to that is "no."

"Fundamental and technical indicators have been sending conflicting signals about whether Apple is in a bubble From Nov. 25 through April 9," says Colin Cieszynski, senior market analyst at CMC Markets (http://www.cmcmarkets.co.uk/) Canada. "Apple shares gained 74.9%. Over the same time frame, the Dow Industrials went up 15.1%. The company also has blasted through the high end of a channel and the chart has gone parabolic or nearly vertical. Technically this suggests that Apple is probably in a bubble and vulnerable. In contrast,fundamental indicators suggest that the stock could still have room to run for a while.”

To me, it looks as if the stock will run for a loooong time. Apple's weighting in the NASDAQ 100 has jumped from 15% to 19% in recent months (though it remains below the 20% level it was at in late 2010). Cieszynski says alarm bells could be triggered were this to rise into the 25-30% range in the coming months. My prediction: this won't happen. In fact, look for a sub-15% weighting within three months.

Cieszynsk says Apple's current price-to-earnings (P/E) Ratio has climbed up toward 18 but still remains low relative to most of the last decade. Again, look for that to climb within three months as Mac sales jump due to a revved, Ivy Bridge-based desktop and laptop line, as well as the roll-out of the Mountain Lion operating system. After this we have the next gen iPhone to spur sales and -- perhaps -- the rumored iTV by the holiday season.

Companies with a higher growth rate can support a higher P/E ratio. With one being considered average for the PEG ratio and 2-3 sending out warning signals, Apple’s current 0.3 ratio suggests considerable upside remains possible.

As CMC Markets notes, with the explosive rally in Apple stock has also come a parabolic increase in expectations for the company’s products and financial results. Recent idle chatter around the markets of a $1,000 share price or a trillion dollar market cap ($1,072 per share) suggests that hopes have become extremely high for the company’s continued success. As well they should be. I'm not sure about a $1,000 price share, but I'd be willing to bet on at least $800 by year's end.

-- Dennis Sellers

 
AAPL
$111.78
Apple Inc.
-0.87
GOOG
$516.35
Google Inc.
+5.25
MSFT
$47.66
Microsoft Corpora
+0.14
MacNews Search:
Community Search:

Latest Forum Discussions

See All
view counter

view counter
view counter
view counter
view counter
view counter
view counter

Make your own Tribez Figures (and More)...
Make your own Tribez Figures (and More) with Toyze Posted by Jessica Fisher on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
So Many Holiday iOS Sales Oh My Goodness...
The holiday season is in full-swing, which means a whole lot of iOS apps and games are going on sale. A bunch already have, in fact. Naturally this means we’re putting together a hand-picked list of the best discounts and sales we can find in order to make your own App Store holiday shopping easier. Things are already kicking off with an... | Read more »
It’s Bird vs. Bird in the New PvP Mode f...
It’s Bird vs. Bird in the New PvP Mode for Angry Birds Epic Posted by Jessica Fisher on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
Telltale Games and Mojang Announce Minec...
Telltale Games and Mojang Announce Minecraft: Story Mode – A Telltale Games Series Posted by Jessica Fisher on December 19th, 2014 [ permalink ] | Read more »
WarChest and Splash Damage Annouce Their...
WarChest and Splash Damage Annouce Their New Game: Tempo Posted by Jessica Fisher on December 19th, 2014 [ permalink ] WarChest Ltd and Splash Damage Ltd are teaming up again to work | Read more »
BulkyPix Celebrates its 6th Anniversary...
BulkyPix Celebrates its 6th Anniversary with a Bunch of Free Games Posted by Jessica Fisher on December 19th, 2014 [ permalink ] BulkyPix has | Read more »
Indulge in Japanese cuisine in Cooking F...
Indulge in Japanese cuisine in Cooking Fever’s new sushi-themed update Posted by Simon Reed on December 19th, 2014 [ permalink ] Lithuanian developer Nordcurrent has yet again updated its restaurant simulat | Read more »
Badland Daydream Level Pack Arrives to C...
Badland Daydream Level Pack Arrives to Celebrate 20 Million Downloads Posted by Ellis Spice on December 19th, 2014 [ permalink ] | Read more »
Far Cry 4, Assassin’s Creed Unity, Desti...
Far Cry 4, Assassin’s Creed Unity, Destiny, and Beyond – AppSpy Takes a Look at AAA Companion Apps Posted by Rob Rich on December 19th, 2014 [ permalink ] These day | Read more »
A Bunch of Halfbrick Games Are Going Fre...
A Bunch of Halfbrick Games Are Going Free for the Holidays Posted by Ellis Spice on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
All contents are Copyright 1984-2010 by Xplain Corporation. All rights reserved. Theme designed by Icreon.