Apple…Overwatched and Underowned!! $AAPL

Apple does not go up everyday because it is OVERwatched. Everyone wants to be famous by calling a top and so sellling pressure is persistent.

Apple will not go down in a serious way because it is UNDERowned. Too many people want to own it on dips.

I own Apple for my fund and my client accounts and I am astonished that great traders won’t leave it alone. I can totally understand not owning it and even disliking the Company and Steve Jobs for their tactics. But to mess around on the short side is just wrong.

Your kids will have many reasons to dislike you but not owning this run for them is inexcusable. They will forgive the ‘short sale’ of your home, missing the Priceline monster run and owning a ‘Droid’, but not your lack of intelligence for padding their college account with Apple stock.

Apple makes great products, has silly margins and continues to expand distribution with no end in sight. The perfect storm for stock price appreciation over time.

Here is the‘money quote’ from a fund manager at Wedgewood today:

“We still believe Wall Street consensus has not grasped the enormity of what Apple is delivering on a global basis,” Rolfe tells me. “We’ve never seen anything like this in our careers.”

Rolfe contrasts Apple’s low valuation multiple with the high-flying stocks of the DotCom era.

“This isn’t Cisco [Systems (CSCO)] circa 2000, with a P/E of 100,” says Rolfe. “This is John D Rockefeller, Standard Oil kind of stuff. They are taking a disproportionate share of revenue and profit.”

Luckily for me, the stock will continue to be overwatched and underowned for the forseeable future.


  1. Kid Dynamite says:

    I was thinking about AAPL’s future last night. More specifically – what’s next? what happens once everyone has their Ipad/Ipod/Iphone? Of course, the beauty of AAPL is that they get people to spend big bucks buying newer versions of the same product over and over again. THAT is an amazing business feat to pull off.

    I would love to see stats on what % of Ipad2 owners had an Ipad1… any guesses? And what % of Ipod purchasers own an earlier version of the Ipod…

  2. Jbeyer says:

    Trends that can’t continue forever won’t continue forever. Their ‘ever-expanding’ distribution will hit a wall soon.

  3. Anonymous says:

    It seems like folks are skiddish about Apple’s ability to “deliver the goods” on a consistent basis, but all they do is keep executing and delivering results. For whatever reason, there seems to be a paranoia factor about Apple – even among the analyst community. Even the top Goldman Sachs Analyst missed Apple’s Q1 revenue forecast by a huge margin.

    Already the #2 company in market cap in the US and they haven’t even scratched the surface in terms of international expansion…. Apple is a buy both in the short and long-term. Most Wall Street folks simply do not understand Apple’s strategy or approach.

    It doesn’t surprise me though – the main source of alpha in my portfolio is Wall Street’s lack of understanding when it comes to tech stocks. It can lead to some great opportunities if you do your research.

  4. Evan Tindell says:

    What, exactly, does it mean to be underowned? Pretty sure 100% (+shares short) of the outstanding stock is owned by someone…

  5. Alan Levy says:

    I bought Appl at $7 per share pre ipod days when they had $6 in cash. Jobs had just come back and his first big innovation was of course the ipod. The reason I continue to hold this stock is not because I worry about what is coming next. Of course it’s very cheap, but I hold it because “once you go mac you never go back”. My three teenage kids (and all use either the Mac desktop or laptop. They will NEVER in their lifetimes leave the IOS platform. As they begin to buy more gadgets, they will remain in the IOS ecosystem, buying iPhones, Ipods, etc.

    Also, APPL is still hardly seen in the enterprise and their share of the PC/laptop market is still sub 10%. This dynamic however is changing with the iPad which is seeing far more traction in the business sector.

Comments are closed.