I am sure all of you know at this point that Steve Jobs has taken an indefinite leave of absence from the Cupertino based Apple. He is revered by many as one of the great chief executives of all time with his tangible charisma and mind-numbing control over the perfection of each Apple product. So, where does the second-largest company head from here?
Nearly ever Wall Street analyst continues to deem this stock a buy, leaving the minority with hold ratings. Almost all 1-year price targets are above $400 a share, giving the low end a 17% gain. How can this be? When Jobs announced his intentions to step away for an unspecified amount of time, the stock hiccuped a few dollars in the morning, only to rally back to its $340 price the following day. Over the last year it has gained over 67%. Their most recent earnings report shattered expectations with outstanding iPad and iPhone sales. Adding Verizon as an iPhone provider will definitely give the iPhone a boost in market share on the gaining Android system. Apple also has mountains of cash growing year over year, only to challenge Everest in size. That's the backdrop.
Many believe that Apple will be on autopilot for the short-term and roll out the products they have lined up for the next several quarters. Outside of these products that have essentially all but been released, where will Tim Cook, the interim man in charge, steer this ship next. I find it hard to imagine Cook having the vision and drive of Jobs who stampeded his way, revolutionizing the mobile phone market. This is the area of concern, a year down the road. I would not argue against the purchase of Apple in the short-term, but for a long-term hold I think there are more questions than answers. You probably are an owner of Apple already, and not just a few dollars. Some of your money is undoubtedly in mutual funds and there are thousands of mutual funds with their money in Apple, and a large percentage of that money in Apple.
So, beware that most of you already own the stock in some way or another, those looking to diversify might seek other opportunities. I am not going to stand against the known world and recommend not buying it, I would recommend the purchase of it now with profit-taking over the next year before we really see the new face of this juggernaut.
Update: bearish bets (puts) on Apple have dropped to the lowest level in over a year. Another positive sign for the near term.
