Friday, March 26, 2010

A Few Tech Items For A Boring Day

* BIDU is being stubborn though I think it really wants to fold. However, cult stocks are often treated as "my precious" as folks are loathe to part with them.....

* I’m still thinking ISRG and maybe CREE are shorts as well....

* Maybe I should change my mind on FSLR for the time being, as I think a big solar ramp will commence in the coming weeks/months and the market needs a leader.  It's likely FSLR would be the anointed leader in the group for just a while longer. So this has me looking at the long side on this name.

* I believe jobs will be meaningfully better quite soon, but I think a good number of retailers have risen too far too fast.

* AAPL's my biggest position by far and my target has been moved from the mid $300's to the low $400's. However, here is a different way to look at AAPL and why the double off of the $115 level isn't a huge move.

Think back to when AAPL was at $120. The stock was a $120 stock with a 30 PE and equal growth rate. Yes, those were the posted numbers, but the reality was that AAPL was really a $75-80 stock with a six month forward P/E of around 8! The reason is it had $40-50 per share in net cash and investments that was producing little of the company's earnings. That, combined with the fact that it was growing at 30% give or take, made for a massive catch-up move on the stock.

Also, non-GAAP was way higher, but was widely discounted. Needless to say it has done the $10 in EPS, it has grown more cash and the growth rate has held, and is actually accelerating. So what we have seen is a grossly undervalued stock until just recently. However, even now it's still cheap. Before cash the PEG is 1 and the forward PE is 17. So the forward PEG is actually well under 1. Now with the massive cash hoard AAPL's forward goes to under 14, the PEG is about .35 and growth may even accelerate further for a few quarters with what I've termed the iNetbookkiller or iPad to avoid any confusion.

* NVDA is one name that seems to have stalled but is very well positioned for all the new netbooks and super-charged phones that have now passed the point of the early adoptee stage.....

* SOHU is up and grinding higher; and I don't see much resistance until $61.

long AAPL

No comments: