[private][private]Seems like these days everyone owns AAPL or wants to own it. I think you would have to have your head checked to consider buying here and if you aren’t a very long term investor considering taking profits or thinking of ways to protect those profits……
MY VIEW: company and stock have had a hot streak of epic proportion, even the biggest cynics cant argue…..but let me take a quick shot. The stock primarily moves because of the next hot gizmo the company is rumored to grace the earth’s presence with. At this point i think it is safe to say that us mere earthlings who just meander around doing whatever it is we do in between iWhatever launches have a very good sense for what is coming between now and Summer; an updated iPad in Mar/Apr and and updated iPhone for AT&T, possibly a lower end version for the first time. I guess even more important is my sense is that last years iPhone 4 launch was probably the last iPhone launch that Steve Jobs will be present for. I take no pleasure in saying this, and have no facts to base this on other than rumors and press reports about Job’s deteriorating health, But the company is not doing themselves any favors with investors by not officially naming a succession plan.
Lingering Near-Term Challenges:
-Innovation: I think the company has hit an innovation vacuum at time where their creative driving force is not likely to be nearly as impactful as he has been over the last 10 years….what else do they really have to create and tell us how much better our lives will be once we shell over the $$ to get it…..ok listen, i love their products, i probably have 20 of them in my house, but i am kind of at a saturation point and i feel like the company has had to get a bit more promotional in convincing us how great their products are…..last yr when Jobs introduced the iPad he called it magical and revolutionary, well a yr later i think most can agree it is neither and as my daughters like to call it a “ginormous iPhone that doesn’t make phone calls” 🙁 So they better figure out how to create a platform of phones or gains some serious market share in computers, because iPods are going the way of the dodo and it seems like every new computing product just canaalizes legacy products.
-Competition: Apple has become more and more dependant on iPhone and iPad for their continued success, more than 50% of the company’s revenues come from those 2 categories and it just so happens that mobile has been and continues to be one of the most competitive areas in tech with what seems like dozens of rivals always looking to undercut on price…..everyone is gunning for AAPL in mobile; MOT, NOK, MSFT, GOOG, HPQ (PALM), HTC, LG, Samsung, and even DELL….i say mobile because all of the guys in addition to competing on the smart-phone platform are in some way planning to compete in the tablet space. Margins will erode and AAPL will be forced to deal with a lower margin structure as all of those listed above have had to do in pc’s and/or handsets prior to the emergence of smartphones and tablets.
TRADE: AGAINST A LONG–BUY July Put Spread Collars
BUY the JULY 340/300 Put Spread for ~12.00
–Buying 1 July 340 Put for 22.00 and Selling 1 July 300 Put at 10.00)
SELL the July 390 call at ~11.00
-Structure costs you ~1.00 or less than 1%
Break-evens on July Exp:
Upside: Long Stock called away at 390 up 11%
Downside: Btw 350 and 340 no protection
-Btw 340 (-3%) and 300 (-14%) can make up to 40
-Below 300 no protection[/private][/private]