What are other factors that will continue to drive Apple's stock up in
the future besides Gavin's 17 points? There are several forces
described in the following that may contribute to the future trend:
(1) In computer hardware/software stocks, there are few companies
have better PE ratio than Apple's future prospects:
Dell - stands around 50; Gateway - stands around 58;
Compaq - stands around 35+, Sun - 24; HP - 24; IBM - 16;
Microsoft - 50+, Oracle - 35+.
Based on Prudential's $1.29 net income on Apple, the current PE
will be around 21. However, Sanford C. Bernstrin has estimated
$0.25 for Q2 against $0.18 from Prudential. Thus, the net in '98
could be better than $1.29.
From PE standpoint, Apple is a winner in the computer industry,
so is the stock price.
(2) There are not many good computer stocks to choose from. DEC and
Tandem are gone. The cash in those pots will flow into more
rewarding companies. Apple is the best one to choose so far.
With huge money from DEC/Tandem, if only 10% of such money flows
into Apple, it will make Apple fly to the high.
(3) There is the amount of 15b - 20b hard cash flowing into mutual
funds/stocks monthly causing the hot stocks to fly insanely. If
only 5% of total injected amount is moved into computer stocks,
Apple will be likely to share more of such fund;
(4) Window dressing is always a method money managers employed by
the end of the quarter. When we are getting closer to 3/31, the
hot stocks are likely to move even higher;
(5) Triple witchings will be on the coming Friday, which will make
stocks more volatility. Apple will get affected especially near
the striking prices. It is still unclear if it's a positive or
negative impact on Apple on the short-term basis.
Phil
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