This past week was a milestone for one of my favorite stocks AAPL - Apple Computer. Recall we made some good money through 2011 and 2012 buying breakouts to new all time highs in AAPL.
Things continued in a similar fashion until AAPL topped out in September of 2012 and went into a long, steep correction that eventually erased 40% of the stock's value. The general market as measured by the SP-500 also pulled back at about the same time, but bounced and recovered a mere 2 months later late in November of 2012. AAPL instead continued to slide.
Things took a turn for the positive when the downside trendline was broken in May of 2013 and marked by my post AAPL Trendline Break. Recall this bottom corresponded with a number of shareholder friendly moves made by AAPL management which had been more or less ignoring the concerns of the shareholders.
Fast forward to August of 2014. Since then AAPL has had a 7 for 1 stock split - another shareholder friendly move - and finally threatened the old all-time closing high at a split-adjusted 100.75. I went long some AAPL shares on Tuesday 8/19/2014 in anticipation of a move to new all-time highs. I followed up with the September monthly 90/110 Call Debit Spread.
I am expecting higher prices, but keep in mind that AAPL is the highest capitalization stock in the US Market at 602 B a full 30% higher than the next closest stock XOM - Exxon Mobil. This means that it will move slowly and a 10% move up to 110 will not come quick or easy. This means that AAPL stock will not make you rich at this point - if you are not rich already - but is still worth a long position in my mind.
As for stocks which will make you rich, I prefer earlier stage names such as GILD and TARO.
TARO is a particular favorite with a mere 6.6 B of Market Cap and other key features:
- 5 year earnings growth rate of 47%
- PE of 19.5
- Average Daily volume of only 76 K shares
Consider that in light of a new all-time high in the shares, and I continue to expect higher highs in TARO.
Have a great weekend and great week ahead.
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