…reminds me back in those old days when the multiple kept compressing and eventually, a huge breakout would take place that brought the stock into a trading range much more representative of its actual fair value.
I’m actually mildly surprised that it hasn’t caved to technicals and filled several gaps before making this long waited run to $600 (which is where it should’ve been awhile back). But this is exactly what I’ve alluded to in prior postings where eventually, fundamentals take over and the spring snaps. The 42% upwards move since the start of 2012 is essentially making up for lost ground when the stock remained under $400 during that timeframe where its valuation was not matching the fundamentals presented via their earnings results. I still firmly believe that based on the past few quarters earnings as well as now knowing the full details of this next version of the iPad, that the stock is still at least 10% below where it ought to be trading.
The new iPad is likely going to surpass last years numbers in terms of units shipped plus lowering the entry point for one by maintaining a model from the previous generation for $100 less, is going to continue to accelerate the momentum in this particular space. We’re not even getting started in 2012 yet because the huge driver I’m looking at is in the MacBook Air/Pro space and the next iPhone.
Over 450 nerds (I mean customers) lined up early this morning at Tokyo’s Ginza Apple Store to buy the iPad. The temperature during the morning was around 8C (mid 40’s F). Pretty sure the same thing was repeated at the other stores.
The Retina Display is what is going to drive sales of this model worldwide. LTE less so since once again, the issue is differing frequencies across the globe when it comes to 4G/LTE.
On a related side note, if the mobile providers would get their heads out of their ass and figure out a way to offer more reasonable non-contract cellular data rates, they could really start eating into the cable/DSL broadband share because by all accounts, LTE is proving to be a bandwidth monster providing throughput far above cable and DSL (I’d dump cable in a heartbeat and I know I wouldn’t be the only one).
Back to the stock; I still believe a correction is coming as well as a period of consolidation. And as mentioned before, anything below $500 is a steal (and if it ever does manage to fill those gaps at $470 and $430, would represent those rare “load up the bus” buying opportunities for me).
