It's Time to Give Apple a Seasonal Rest so I'm Selling It Out of My Portfolio Today
02/24/2015 5:33 pm EST
Since this technology behemoth is still a seasonal stock and new product fever has helped push the shares up to an all time high, MoneyShow's Jim Jubak is selling his shares as of February 24, with the idea of rebuying in July or August.
And I’m starting to see the kind of hype that I think marks a seasonal high for Apple.
Specifically, I’ve started to see Apple Watch fever.
In the headlines. On February 17, for example, a Reuters story reported a Wall Street Journal story that Apple (AAPL) had asked its Asian suppliers to make 5 to 6 million units of three Apple Watch products for an April launch. Taiwan’s Quanta Computer, the sole assembler of the Apple Watch, would operate 24-hours a day during the Lunar New Year holiday at Quanta’s factory in Changzhou, China to make an entry level Apple Watch Sport model (50% of production), a mid-level Apple Watch (33% of production), and a high-end Apple Watch with a 18-karat gold case.
Add in the share price. Apple shares are up 18% from January 27 to the close on February 23 at $133. That puts the share price above the old 52-week, and all time high of $128.88, and near the $135.07 that marks the top of the stock’s Bollinger Band.
Back when Apple reported its December quarter earnings on January 27, the 52-week high was $119.75 and I set a target price of $132 for March. I noted that the December quarter was always the company’s biggest and that it would take runaway excitement about the Apple Watch to send the shares up from their post-December quarter bounce.
Well, we’re seeing that excitement. We’ve got a new high. The shares are at the top of their range. Ask yourself if you think there are a lot of potential Apple buyers out there who don’t already own the stock.
And this is still a seasonal stock that typically falls off as revenue and earnings decline from their December highs into the spring and summer.
So, I’m selling in order to take advantage of that seasonality (and the possibility that the Apple Watch will be a success, but still fail to live up to expectations), with the idea of rebuying in July or August.
Apple’s shares are up 74% since I added them to this portfolio on May 18, 2012.