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Technology Stocks : Apple Computer (AAPL): Analysis and Forecasting -- Ignore unavailable to you. Want to Upgrade?

To: nedlo who wrote (242)	7/12/1998 10:16:00 PM
From: soup	Read Replies (1) \| Respond to of 692

>I was thinking of investing heavily on Monday @ 32$, What's your call on Thursdays potential< nedlo; No rational person on these boards should attempt to advise you on such a heavy bet. Notwithstanding AAPL's earnings, the market's pretty toppy and Steve Jobs could fall out a helicopter between now and Thursday. Also figure that the market may have already factored in the AAPL's 3Q earnings news into the current price. That said, a very limited speculative bet on in-the-money July $30 calls [AAQGF] at 2 7/16 probably offers little downside risk (assuming the stock stays where it is) and some good percentage to the upside on a modest share surge. Coversely, betting on July 32 1/2 calls [AAQGZ] at 15/16 could easily lose you 100% of your investment (assuming the stock stays where it is) and make you no money until AAPL shares go past $33 1/2. In either case I would resist the urge to chase if we see a big surge Monday morning. I that happens, I would take some equity position with a multi-year time frame. Of the long term calls, I paid too much for Jan 2001 $30 @ $10 last April (Have to get to $40 to get even.) I'd have done much better to get them at $7 when AAPL was swooning in the mid 20's. But, if AAPL gets to $60 by expiration, I will have tripled my money with the calls vs. only doubling it with actual shares. On the other hand, if you buy AAPL shares and sell covered Jan 2001 $30 calls @ $10 3/4 (and hold the shares till expiration) you lock in a 13% rate of return for 2 1/2 years. Not too shabby!! Good luck.

To: nedlo who wrote (242)	7/12/1998 10:22:00 PM
From: soup	Respond to of 692

Apple's Numbers Compared to PC Makers. These numbers have been cribbed from Eric Yang's site, but I though I'd massage them a little and re-post them here. macevolution.com Price per share - 7/10/98 AAPL 32 1/16 CPQ 31 5/8 DELL 100 13/16 GTW 61 1/8 Book Value Per Share (Price/Book) AAPL $9.31 ( 3.44) CPQ $6.21 ( 5.09) DELL $2.23 (45.21) GTW $6.61 ( 9.25) Annual Sales Per Share (Price/Sales) AAPL $49.29 ( .65) CPQ $16.09 (1.97) DELL $21.06 (4.79) GTW $42.86 (1.43) Cash Per Share (Price/Cash) AAPL $13.71 ( 2.34) CPQ $ 4.66 ( 6.78) DELL $ 3.77 (26.74) GTW $ 5.22 (11.71) Average Estimated 1998 Per Share Earnings (Price/Earnings) AAPL $1.43 (22.5)* CPQ $0.55 (57.5) DELL $1.96 (51.4) GTW $2.25 (27.2) Average Estimated 1999 Per Share Earnings (Price/Earnings) AAPL $1.73 (18.5)* CPQ $1.68 (18.8) DELL $2.60 (38.8) GTW $2.89 (21.2) Note: Numbers via Yahoo! biz.yahoo.com In 2Q 1998 analysts' of expectations AAPL were exceeded by 99%. AAPL will report 3Q earnings 7/15 after market close. Average estimate is for $.33/share.

To: nedlo who wrote (242)	7/12/1998 10:53:00 PM
From: HerbVic	Respond to of 692

My call is that it is a complete unknown. That may sound like a cryptic answer, but it is the reality of forecasting with AAPL's post earnings movements. On the one hand, the potential for a surprise in the numbers is great. This same quarter last year under less than ideal conditions was a remarkable quarter. (I don't remember the numbers) The G3 sales are in full swing. The school orders are coming in and should be quite healthy. The overall public sentiment is coming back to favor sales to non-Mac faithful. These all give us the opportunity for a 25% to 100% surprise in earnings. On the other hand, Apple has backed away from printer and other peripheral sales. The Compaq channel stuffing has created a broader market of certain price decline. The PowerBook G3s were late out the gate. The 100% surprise last quarter caused analyst's to inflate expectations from what they would have. All these things point to a disappointment this quarter. So, like I said, "it is a complete unknown." One thing I have observed is that with many stocks, but especially where AAPL is concerned, the positive surprise earnings don't always produce sudden appreciation in stock value. This is a stock that gets most of its lifts from momentum players. If the momentum players decide that the current price is already too lofty, they may not bid. This may be the high. I don't think so, but it may be. Good luck! HerbVic