|
We knew the company had only a 52% probability of generating the performance
necessary to defend its stock price, we recommended the following investment
strategy: Short the stock three days before the earnings announcement. We knew
that after the earnings announcement, the market often realizes that Apple is
not on track to achieve its goals, and investors begin selling the stock,
driving the price down.
The lower price is often short lived. The simple fact that Apple is a story
stock and that its management delivers news shortly after earnings
announcements often drives the stock back up again.
At that time, we recommended covering the short position and going long until
three days before the next earnings announcement, when the market often repeats
the same behavior.
|
|
|
RBP
STRATEGY
Apple
Inc. (AAPL)
Total
Return (12 months) 148.4%
|
|
Action |
Date |
Price |
Shares |
Investment |
|
|
Buy
|
01-Apr-05
|
$42.0
|
23,810
|
$1,000,000
|
|
|
|
Short
Covered |
07-Apr-05
15-Apr-05 |
$43.0
$36.0
|
23,256
23,256
|
$1,162,791
|
|
|
Long
Sell |
15-Apr-05
07-Jul-05 |
$36.0
$37.5
|
32,300
32,300
|
$1,211,791
|
|
|
Short
Covered |
07-Jul-05
15-Jul-05 |
$37.5
$41.0
|
32,300
32,300
|
$1,098,191
|
|
|
Long
Sell |
15-Jul-05
05-Oct-05 |
$41.0
$54.0
|
26,785
26,785
|
$1,446,398
|
|
|
|
Short
Covered |
05-Oct-05
13-Oct-05 |
$54.0
$50.0
|
26,785
26,785
|
$1,553,539
|
|
|
Long
Sell |
13-Oct-05
11-Jan-06 |
$50.0
$83.9
|
31,071
31,071
|
$2,606,838
|
|
|
Short
Covered |
11-Jan-06
20-Jan-06 |
$83.9
$76.5
|
31,071
31,071
|
$2,836,762
|
|
|
|
Long
Sell |
20-Jan-06
15-Mar-06 |
$76.5
$67.0
|
37,082
37,082
|
$2,484,484
|
|
|
|
asset
management
login
