Wednesday, March 14, 2012

Get a piece of the Borg: Buy ACN

When the author was in technology consulting, the premier delivery firm was Anderson Consulting, now called Accenture. The people all looked the same. The delivery tools were always canned and consistent. It was so uniform it was like the Star Trek community called the Borg. And they always delivered. That is right, I started a sentence with 'and'.

I have no idea why one of the largest US government contract technology firms in the US can move their headquarters offshore to Ireland to avoid taxes and have any repercussions. In fact, their revenues have just compounded.

The author is buying ACN at $62.45.

Friday, March 2, 2012

Apple should be $600 / share

Apple is a steamroller. Unstoppable. It should be trading at $600/share right now. Plus the Ipad 3 is coming out and the author sees Ipads becoming an executive "must have".

The author has entered the following position.

Buy Apple Oct $555 Call $47.65
Sell Apple Oct $560 Call $45.30

Let me show you what has made me go crazy about Apple.

Here is the deal, all last year it was making $6B a quarter for a total of $27B revenue (average) / $6B in earnings growing at 40% rate.

Then came the new Iphone 4S last quarter, and then in one quarter it went to $46B revenue / $13B in earnings in one quarter. That blew the hinges off of any previous valuation. Assuming no growth and continued earnings they will make $52B in earnings this year and thus with a $470B market cap sell at less than 10 X earnings. Now think of the fact that they have $80B in cash on the balance sheet and they are selling at 8 X earnings.

If we get into normal valuations of 20 X earnings against 40% growth this is a $1T stock.

All this and the iPhone is still limited to 10% of the population in China because they have only one carrier, like the AT&T deal from two years ago.

This said, the stock has run really far really fast and should plateau for a bit. But it is going up from here.