Just a brief comment on several issues.
AAPL is trading down $6.50 to $332.50 per share. If you asked us two days ago after the fantastic blow out quarter we would have said the odds of this trading down here are slim to none. Suprising most everyone. Apple seems to be trading down as the uncertainty about the health of Steve Jobs is weighing on the shares and investors minds. AAPL is set to go forward for at least the next 4 years with their product cycle as well as future new product releases. We are not concerned about the future in this regard whatsoever. Additionally, Steve Jobs had surgery for Pancreatic Cancer in 2004, or 7 years ago. He has had other serious health battles since then as all know. Pretty much anyone knows just how serious this type of illness is, and having the “good” or “bad” kind is still not good, nor is having a liver transplant. Apple has had the benefit of SEVEN YEARS of knowing all this ( as have investors) while having Steve Jobs there to work with the executives for a rock solid succession plan and company road map. This is not something that just occurred this Monday to the shock and surprise of all. Furthermore, Steve Jobs is still here as CEO and can advise the company. Even if he never comes back to full time management, he can advise and has developed the greatest management team in the world, whom he has trained perfectly, to carry out his mission. We wish Steve Jobs the best of luck and health and hope that he does in fact return soon, but if this is not possible for him to return or work full time, we believe that this will not make a difference in the company and its future as a result.
The shares in AAPL have been trading at a relatively low PE compared to other companies even though its the biggest and best growth company in the world. We think actually that its been this way as a result of a ” Steve Jobs ” Discount, not Premium. The uncertainty of his health has possibly affected the shares trade in this way. Once the news is digested and accepted the shares can possibly trade at healthier PE levels in the future. We would continue to accumulate shares for growth oriented accounts. Many, including us here at Wall And Broad, and Lange Financial Services, regard APPLE as one of the finest world wide growth company’s, and this will continue for at least the next 5 years.
At the beginning December 2010, Fred and Rob at Lange Financial Services told us that they are looking for a pullback in the markets and shares right around the mid of the earnings reports and the State Of The Union Address. LFS was looking for a modest pullback of less than 5%, and this was mentioned on the blog here in previous posts. Here we are the week before the State Of The Union Address and it appears we are having that pullback. Some of these shares are getting hit pretty hard, more so than the market, yet remain great and solid companies. We are making a list ( and checking it twice) here ourselves of stocks we want to buy and add to our portfolios as we remain bullish for the market for 2011 and beyond.