CUPERTINO, Calif. (TheStreet) -- One thing is clear for investors eager to hitch a ride on the Apple (AAPL) express: They need to work out their strategy well ahead of the tech giant's next big product launch.
Apple, which hit a new 52-week high last week, remains one of tech's hottest stocks after climbing almost 35% this year. And with new iPhone and iPad launches looming on the horizon, all the signs are pointing to even more upside.
So what's the best way to play the stock?
"You want to be long on Apple" Brian Marshall, an analyst at Gleacher & Company, told The Street. "Apple is the poster child for secular growth these days -- I think we're going to see the CDMA iPhone and the new iPad in the March timeframe." A new iPhone and iPad would easily offset any seasonality, said Marshall, who thinks that Apple will probably exceed expectations next year.The analyst adds that his $345 Apple price target is based on "conservative" forward earnings per share of $18.25 for 2011, a figure that could now easily surpass $20. "Profitability for the company is increasing," he explained. "It's all about the iPhone and the iPad." Investors, however, should not expect to see a massive hike in Apple's share price in the wake of any new product launches. Apple shares gained less than 1% on the day the iPad was announced in January and dipped 2% when the iPhone 4 was unveiled in July. "Apple products get a great amount of exposure before they are launched -- what you see is the stock accelerating into the launch," Avi Cohen, an analyst at Avian Securities told TheStreet. "[But] the stock doesn't typically sell off afterwards, which is a good sign -- usually when there's a lot of excitement beforehand, there's a big selloff." Another challenge for investors is trying to gauge when the company will make a big announcement; Apple is notoriously secret when it comes to news. However, history shows that Apple tends to make big announcements in January; in January 2007 it launched the iPhone, in 2008 the MacBook Air, in 2010, the iPad. Looking forward, signs -- and the GigaOm Web site -- point to yet another Apple event in January, although likely not before Jan. 9, the last day of the Consumer Electronics Show (CES) in Las Vegas. When investors can expect to see an iPhone running on Verizon's (VZ) network is still up in the air. Initially expected to appear in early 2011, the saga of the Verizon iPhone took another twist last week, with hints that the phone may not actually appear until 2012. Reports insinuated that Apple may still launch a CDMA version of the iPhone for Sprint (S) and other foreign carriers, as well as a Verizon 3G iPad next year. For at least one expert, this lack of roadmap visibility takes the shine off Apple. "I find the company's obsession with secrecy and lack of transparency troubling," explained Charles King, principal analyst at technology research firm Pund-IT. "Personally, I prefer knowing where and when a carnival ride will end before I buy a ticket." --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV