February 18, 2014

Why Apple stock is standing strong

Since Jan. 31, 2014, following Apple's (AAPL) disappointing quarterly earnings report and guidance, the company's shares have risen by $40. The recent strength in Apple's shares (even after Carl Icahn withdrew his share repurchase program) hints that Tim Cook might know something that we don't know.

While Apple's salad days are over and the company's growth trajectory is maturing, with $75 of upside vs. only $50 downside (a positive ratio of 1.5:1), I am attracted to the shares both absolutely and relative to the body of alternative large-cap technology stocks.

Stated simply, in an unexciting U.S. stock market, Apple's shares represent reasonable fundamental value.