Insiders are buying Apple (AAPL) into strength -- shares up by around 20% so far in 2011.
Apple has a market cap of $361.62 billion and an enterprise value of $337.40 billion. This stock trades at an extremely cheap valuation, with a trailing price-to-earnings ratio of 14.06 and a forward price-to-earnings of 10. Its estimated growth rate for this year is 25.3%, and for next year it's pegged at 12.2%. This is an extremely cash-rich company; the total cash position on its balance sheet is $25.95 billion, and its total debt is zero.A director just bought 2,670 shares, or about $1 million worth of stock, at $374.90 per share. From a technical standpoint, AAPL is currently trading below both its 50-day and 200-day moving averages, which is bearish. Shares of AAPL topped out in October at around $426 and subsequently dropped to its recent low of $363.32 a share. After hitting that low, that was right at its 200-day, the stock has rebounded to its current level near $389. I now see a few potential long entries in Apple. If you're bullish on AAPL, I would consider getting long once it moves back above its 50-day at $390.85 and then above some near-term overhead resistance at $396.41 on high volume. Look for volume that's tracking in close to or above its three-month average action of 19,083,800 shares. If we get that move, then I would add to any long position once it takes out some stiffer overhead resistance at $410 a share on high volume. You could also buy Apple of weakness down towards some support at $380 a share, as long as the stock doesn't move much below that level. If you get long off weakness, then look to add more shares as the stock takes out some of the overhead resistance levels I mentioned above. If you buy around $380, then use a mental stop just below that level. If you get long off strength, then use a mental stop a few percentage points below $390.85. If AAPL breaks below $380 on high-volume anytime soon, then I would completely avoid trading this name from the long side for now. A high-volume move below $380 should put $360 to $350 a share into play on the downside. Apple shows up on recent lists of Merrill Lynch's 10 Favorite Stocks for 2010 and 9 Top Goldman Sachs Stocks for 2012. It was also featured in "5 Stocks the Big Funds Love for 2012."
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