Toward the end of November 2011, I wrote about Apple (AAPL) after Steve Jobs. With the shares then changing hands at around $375, there were several reasons that I saw to recommend investors buy the shares. On a chartist viewpoint, I wrote “there should be strong support for the shares at around $360 and potential for further advances toward the 12-month high should this level hold firm.” A few days after this article, the shares did indeed fall back toward the $360 level, touching a low of $363.32 on November 25, before then shifting into a forward gear and moving up. This month the shares have, indeed, hit a 12-month high, touching $431.37 on January 19. With Apple shares now just below this level, a rise of around 14% compared with the S&P 500 (SPY) Index’s rise of around 10% since my buy recommendation, its time to ask whether the shares should still be bought, or if investors should consider taking profits.
In answering this question, it’s worth reviewing the reasons for my buy recommendation and comparing to the current situation:
Apple has cash of around $10 billion, and along with marketable securities its cash and investments on its book is around $82 billion. This gives it several options, all of which I believe would be attractive to shareholders:
- Apple could make acquisitions that would have synergy with current strategy and augment its current market offerings;To continue reading, click here.