Consumer Electronics

Will The Apple Trade For Macworld Work in 2008? (AAPL)

Apple Inc. (NASDAQ: AAPL) hasn’t gotten off to a good 2008 as a stock. Shares closed at $198.08 to close out 2007 and shares very briefly traded north of $200.00 on the opening day of 2008.  But shares closed at $171.25 yesterday.

Historically traders and investors have bought shares and won going into the annual Macworld event with Steve Jobs.  We still have a few trading sessions before Jobs gets to unveil whatever it is that is Apple’s new next big thing.  Maybe it will be a leaner and lighter laptop priced more within reach for most in the U.S., but that is just speculation that varies from house to house.

We ran various calculations with time frames varying ahead of the Macworld event over the last five years.  It isn’t exact science because closing and opening prices are rarely delegated to all.  But in the past buying Apple on the day ahead and even the day after has yielded positive returns.  We’ll follow up later with more specific numbers because we asked for calculations and received different numbers.

With a near 15% pullback, you have to wonder if this challenging market will accommodate this past trend in 2008.  The good news is that over the last few years investors who have tried bottom fishing when Apple shares sell off 10% or 15% have tended to win in the long haul.  Apple’s market cap now sits at roughly $150 Billion, it trades at 33.6 times fiscal September 2008 earnings, and trades at roughly 5-times projected revenues.

Jon C. Ogg
January 9, 2008