AAPL (Apple Computers): Is It Too Late To Get In?

Golly this is a toughie, Apple just released monsterous earnings and golly, you have to ask yourself what to do in a situation like this. I mean, you have a stock that is pounding 100+ and the memory of it being a 50 dollar stock is still super fresh. If you held it since then, you'd have yourself a single bagger by now. I mean seriously... It's been a beast. Well, before I go on about whether you should get in or not, let's take a look at the lastest results:

"For the first three months of the year, the Cupertino-based company said Wednesday it earned $770 million, or 87 cents per share, up from $410 million, or 47 cents per share, in the year-ago period. Sales were $5.26 billion, up 21 percent from $4.36 billion last year. Analysts, on average, were looking for earnings of 64 cents per share on sales of $5.17 billion, according to a poll by Thomson Financial. Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter, representing a 36 percent growth in Macs and 24 percent growth in the music players. Sales from its market-leading iPods and other music-related products accounted for 44 percent of the quarter's total revenue."

So the biggest thing I see is not the profit, the record quarter or how analysts estimates were crushed. What I see is the iPod/iTunes Halo working it's magic to the other thing that Apple does: Computers. I know! ... they make computers? Why yes they do, expensive ass computers that come with really awesome software that allows you to do some pretty awesome stuff. And people are buying them because they now realize that PC's that come with nothing become just as expensive (if not more so) once you buy all the software. Let's face it, as a package, Macs are just superior products with mac only programs that work seamlessly between each other. It amazing when you see iPhoto work with Garage Band and iTunes.

Now onto the big question. Is it too late to get in? My answer is no. It definitely isn't. Apple is still just 2-3% of the market and it's not hard to see them with 10% of the computer market eventually. Apple is finally turning the corner when it comes to iPods making people think twice about getting a Mac instead of a PC.

Will I be getting in? That's a really good question. I think Apple's trek to 10% of the market will be a long but steady one. I think for any patient investor, it's a golden choice once the price settles down a little. Apple just keeps on hitting them out of the park and it's one of the few large CAPs that have Googlesque growth. But that's the thing, It's a large CAP with a high price of entry and it's hard to put money into this. The first thing we have to remind ourselves is that Apple isn't the only company out there with stellar potential and growth. Ya, we might have missed this train or got off too early (Sigh*** what I did) but hey, there is always another train coming right behind it. The second thing we should remember is that although Macs are great products, there are a lot of other machines out there that are very capable as well for much, much less. The third is that unfortunately for Apple, Macs aren't as sticky like iPod/iTunes. There isn't very much personal investment wise that is keeping you from moving to a PC. With iTunes, you need an iPod and after $250 dollars into buying music and movies, you really don't want to go anywhere else. Fortunately for PC users, your iPod will still work on a PC.

So ya, if you are patient, I think Apple will continue to grow as it has for the last 3 years. It's not Google but hey, who is? For me personally, I think I'm going to hold off and not feel sorry for myself for selling early. I see the market a lot more clearly now (without the emotional glasses) and what I see is a ton of opportunity, so long as we are willing to take a bigger risk (oh but there are bigger rewards) and have the insight to see the potential in things.



Notes:
In Portfolio: I already got off this train. Won't be getting back on. Large CAPs can be frustrating at times.
Random Thoughts: Cats aren't clean, they're covered in spit.
Move of the night: Kobe's Triple Pump against the Suns in Game 3 of the first round. Wow.