Seriously, we read lots of reports over the weekend about the frenzy for Apple products in China even to the point that fake Apple Stores are opening up (and being closed down). A pristine balance sheet with no debt and $83 per share in cash, a relatively low valuation, 82 percent y/y revenue growth, the potential of the Chinese consumer, and the coming release of the iPhone 5 are strong catalysts to move the stock higher.
The $400 level may be some temporary resistance, but, our sense is the stock will soon pierce it, in the words of Mr. Greenspan, “like a hot knife through butter.” Apple is at the forefront of the structural changes that are taking place in the global economy and many still don’t get it.
Furthermore as Apple gets repriced, the markets are in the midst of redefining the concept of “risk-free” and moving into strong balance sheet/high growth companies as the new safe havens. Not that we agree as it blends all kinds of risks, including credit, equity, market, and interest rate, but Mr. Market likes simplicity and traders have to go with it. Fairways and green P&Ls, traders!
(click here if charts are not observable)