This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Put Away the Prozac, Apple's Just Fine

Stocks in this article: AAPL AMZN NOK DELL

Dell's profit margin is near 5%, one fifth that of Apple. Nokia does not have a profit margin unless you count a negative number. Poor Amazon, the company as I have written is overvalued many times, displays a profit margin that makes Dell look good. Amazon's profit margin is less than 1% (negative based on last quarter's dismal results). Right, I know it's not dismal as long as you're willing to forget about that pesky term "return on equity."

Even with Apple's relatively large (more than 40% for those keeping track) return on equity, I will admit life as an Apple bull I was "partly cloudy" as I watched Apple break below the largely followed 200 day moving average. As if by magic, each price tick lower ushered in another in a string of bearish articles and I continued to scratch my head.

Knowing that emotion rules the short term, and logic rules the long term, I was content to watch the circus play out and maintained my bullish stance. In fairness, it wasn't that hard regardless of the numbers. Experienced traders know that the type of price break Apple had through the key 200 day moving average almost always gets retested relatively soon.

Sure enough, here we are three weeks later and Apple is trading near the 200 day moving average of $599. The conversation has markedly changed, although I have not changed my opinion. I recently wrote "anything under $600 is a gift" and you should take it if you can.

If someone is willing to give you the gift of Apple for under $600, take it and consider it an early holiday present. It's hard enough to make money in this market, so when given a chance to receive more value than what you paid, take it.

As many know, value is what you receive, and the price is what you pay. They often have seemingly little resemblance to each other, albeit they are "loosely" correlated. A few days ago Apple traded for less than $530, and on Tuesday it closed at about $585. Did the value of Apple really increase 10% in a few short days? Of course not, only the price changed, not the value of the company.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs