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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Andrew Danielson who wrote (16903)	8/19/1998 12:59:00 PM
From: Mark Palmberg	Read Replies (7) \| Respond to of 213182

I'm still in, and will stay in. Of course I hold a very small batch of shares, but if intent accounts for anything, at least you know we're not all leaving. Here's the way I look at it: Steve Jobs has TWICE now managed to create something out of nothing (the first time with a little help from Woz and the second time actually starting with LESS than nothing). Now that he has the resources of a much more finely-tuned company to support his plans, how can you bet against him? I just don't understand jumping in and out of the market that way. Guess I'm just a let-it-ride kind of guy. Am I the only person here who believes the G3 and iMac are only the tip of Apple's iceberg? Mark

To: Andrew Danielson who wrote (16903)	8/19/1998 1:06:00 PM
From: Richard Habib	Read Replies (2) \| Respond to of 213182

Keep in mind alot of us were in options - totally different investment vehicle where it pays to pull the trigger. Also keep in mind alot of us have 250-350% profits to lock in. I don't see a major pullback - I do see a moderate pullback which in terms of setting up another heavy options position makes a big difference. I am still having trouble with this qtr. I'm still concerned with PB and G3 supply. We know margins will be slightly down, expenses somewhat up. We need PB and G3 sales. I'd also say that iMac sales this qtr is still in question and what about the AIO? To assuem the market will overlook a glitch in Apple's business plan flies in the face of Apple history. Rich.

To: Andrew Danielson who wrote (16903)	8/19/1998 1:13:00 PM
From: Slugger	Respond to of 213182

<<Are we, or is the majority opinion here going to turn out to be a contrary indication?>> Good point, but if you go back a little more than a week on this thread you will see quite a bit of bullish sentiment. It included at least one person saying they had just put 100% of their portfolio into AAPL. I don't like being out of AAPL, but I'm also nervous being in it right now.

To: Andrew Danielson who wrote (16903)	8/19/1998 10:14:00 PM
From: Jon Tara	Respond to of 213182

Andrew, I am a short-term trader, and made a very nice profit in a few days in AAPL. I sold this morning at 43, (and then traded it one more time for a teensie - from 43 to 43 1/16) which now appears to have been the correct decision for my short-term viewpoint, since it closed at 41. I have no pretentions of having gotten-out "at the top", and suspect that AAPL will move on to higher highs. I simply judged that given the risk (my entire trading account was in this stock, on 100% margin) and the considerable profit I was able to lock-down with a minimal hold time, it was a prudent move. My goal in the present market is to make profits whether the market is moving up or down, while minimizing exposure - that is, I want to be in the market for as little time as possible. FWIW, I went short SPY on the close today. A fairly low-risk position, that I hope will make me a little money if the market goes down, and will limit my loss (vs. shorting some go-go tech stock or stocks) should the market go up.

To: Andrew Danielson who wrote (16903)	8/20/1998 11:02:00 AM
From: Andrew Danielson	Read Replies (3) \| Respond to of 213182

Forward-looking PE's Using Zacks, I compared forward-looking (fiscal year 1999) PE's for four major computer makers, including AAPL Name EPS Recent Price PE CPQ $1.75 $36 20.57 GTW $2.80 $60 21.42 DELL $2.59 $115 44.40 AAPL $2.02 $41 20.29 DELL is clearly in a league of its own, and probably should be given its astonishing top-line and bottom-line growth. The other three have PE's that fall amazingly in line with each other. If we used AAPL's price from just yesterday ($43), then suddenly we have a PE of 21.28--right in line with GTW's 21.42. In other words, CPQ's, GTW's, and AAPL's PE's are statistically identical. This statistic initially flies in the face of the concept of AAPL being an undervalued stock. I, however, take this to be a good thing. What is shows is that Wall Street is no longer taking a disproportionately negative viewpoint of AAPL. We've now established that Wall Street is willing to value AAPL stock in line with other PC manufacturers. Good. Now we come to the real value of the stock. Analysts, on the other hand, in their usual slow way, are trailing indicators. They still have a bias against AAPL, and it shows with the EPS forecast (as well as the huge number of holds still on AAPL). The prediction of $2.02 FY99 earnings is absurd. AAPL had $.50 OPERATING earnings in the previous quarter. Therefore, this projection literally claims that AAPL's earnings will be FLAT sequentially for the next FIVE QUARTERS. Um, yeah. Sure. Okay, Mr. Analyst. If we assume a mere nickel advance per quarter (VERY conservative, I think) over the next five quarters, then we get: $.55 (Q4) $.60 (ironically .01 below current analysts' estimates for Q1) $.65 $.70 $.75 We suddenly have $2.70 FY99 earnings. Keeping the PE the same, that means AAPL should be fairly valued in the $54-$57 range! Remember, the valuation is based on forward-looking PE's. Therefore, $54-$57 should be AAPL's value in 1998, not 1999. We must analyze 2000 earnings to look at AAPL's value a year from now. So what does all this mean? When earnings come out over the next two quarters and show top-line as well as bottom-line growth, analysts will be forced to adjust their FY99 projections dramatically, resulting in either, a) very low forward PE (inconsistent with Wall Street's current willingness to give AAPL a competitive PE) -or- b) a significant increase in stock price to the level resembling $54-$57 over the next 6-7 months! Andrew