The APPLE of Thy Eye?

Author's Avatar
Aug 26, 2011
Apple certainly has a nice run from the consolidation low of $100 in late 2009, which more than quadrupled its high in July 2011.


2063192856.jpg


These are the hedge fund gurus which have more than 1 million shares outstanding. But with the departure of Steve Jobs' leadership, will it still be the Apple of the gurus’ eye? Its large CSO of 927 million, allows traders to trade in and out with its broad liquidity which hedge funds are in favor of.


Ticker Guru Name Portfolio Date* Current Shares ↓ % of Shares Outstanding % of Total Assets Managed Change from Last Holdings
AAPL Steve Mandel 6/30/2011 1977263 0.21 4.99 27.13%
AAPL Lee Ainslie 6/30/2011 1244525 0.13 4.03 4.23%
AAPL John Griffin 6/30/2011 1200000 0.13 6.07 22.81%
AAPL David Einhorn 6/30/2011 1077500 0.12 7.73 28.66%
Source: GuruFocus


Apple’s EPS impressive exponential growth from $0.09 (FY02) to current TTM $25.67, is largely attributed to Steve Jobs larger than life presence, undoubtedly contributed to the branding of Apple. From my radar stock screen and intrinsic valuation, it appears that Apple may have room to run, provided its EPS growth is not compromised by other exogenous factors.


See chart:



Not to mention its strong economic moat, evidenced by its up trending gross margin.





1155597292.jpg


But based on technical analysis it is better to wait and see which direction the stock price escapes from its triangle formation before one trades it. Apple currently trades at PE of 14.78x, the lowest range compared to 10-year average low/high of 27x and 61x). GuruFocus DCF gave it a fair value of $576, the caveat is result may not be accurate due to the low predictability of business with business predictability of 1 star.


Read more, Will Apple Remain a Hedge Fund Favorite?


And see, Analysis: Apple's supporting cast steps into the limelight


Disclosure: No positions but may initiate it within next 24 hours.


Note: This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.