1/21/2012
Last Thursday, MSFT and INTC both issues positive earnings surprises. No surprise that the stock prices for both Microsoft and Intel went up on Friday. MSFT is probably half-way through its run-up (which started just under $26 a couple of months ago); I believe INTC is just at the start of a secular upward move.
In my previous post, I left out the fact that I bought INTC Jan 13 Calls @30 at an average price of $0.72/share. I think they are still a good buy at Friday's closing price of $0.88.
I'm wondering whether to buy puts on Sears Holdings (SHLD) and on GOOG. Yes, yes .. I know ... one negative surprise from Google does not knock out a solid business model. But it looks like they might be at the start of a trend towards lower and lower margins. Which means, P/E has to come down. Let's say they can do slightly better than AAPL in the long-run, perhaps justifying a P/E of 17. That would give us an approximate price target of 17 x $30, or $510/share. Of course, this is far too simple an analysis to really go by. But it is scary that if Google were to be valued at the same discounted rate as AAPL, they'd be priced even lower, about $55/share lower.
So, final thought for the day - Google Jan 13 puts sound good?
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