It's Beginning to Look Like an Apple Xmas

 | Nov 26, 2013 | 3:13 PM EST
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You knew the move in Apple (AAPL) would happen just when no one was paying attention, didn't you?

Remember when Apple was on everyone's lips? All you heard about was how the company had lost its way and wasn't using its cash creatively or in a shareholder-friendly way. We hung on every Tweet from Carl Icahn as he played cat and mouse with CEO Tim Cook. Apple went from being a failed-new-product story to being a failed-financial-engineering story in record time and Cook was letting down both the Apple enthusiasts and the financial engineers.

It got so bad out there for Apple that even when it reported a better-than-expected quarter, the analysts were critical and negative. Where's China? Who lost China, they asked. Why isn't Apple buying back even more stock? Why is it just sitting there? Why doesn't it do what Icahn wants?

Well, have you seen the stock now? Have you seen this creep up? And you know why that is?

Because Apple's really doing what Apple does best: innovating, creating new products. But this time they are more software oriented than hardware driven. And People love them. This stock started rallying the way it used to rally when the reviews came out about the most recent iteration of the operating system and they were not only laudatory, but out-and-out glowing. The new operating system leapfrogged over the thought-to-be-invincible Samsung and the new tablets bested anything anyone thought of just a year ago.

The result? We are beginning to hear from the companies that make corrugated boxes and the companies that ship holiday gifts and the retailers that sell hard goods that it looks like an Apple Christmas. Can it be as good as two years ago? I don't know, because that inspired the historic run to $702, still quite a ways from here. But the fact that the stock has percolated this high without all of that raising-price-target fanfare is really good news. The fact that it's not being done on catch-ups, upgrades and table pounding tells me the run has staying power.

Now, I know that Apple's still not giving me what I want, a credible social alternative to go with mobile. It didn't buy Twitter (TWTR) before it came public. It didn't buy Netflix (NFLX) before the run. It didn't buy Pandora (P) because it thought it could beat Pandora with iRadio. Maybe ultimately it can, but it hasn't yet. Nor has Apple kept up with the pace of innovation that Google (GOOG) is offering across the board. That company's on fire with inventions and ingenuity on a social, mobile and cloud platform and it isn't stopping any time soon.

But that doesn't mean that the company's sitting still. The acquisition this week of the Israeli- based Primesense is a giant step toward Apple creating something that can react to motion like the best part of the Xbox. We don't know how Apple can win the battle for the living room without the help of the cable companies, but maybe Apple can develop something that makes your cable box less of a hardship and your clicker less of an ice-age relic.

Apple's stock is, at last, now breakeven for the year. It is probably the cheapest stock in the Nasdaq 100 after you back out the cash. It offers a decent dividend that can go higher and it's got the biggest buyback on Earth. Oddly, it might end up being one of the best places to be going into the homestretch, a gaining momentum story with a low price to earnings multiple. And it's all being done without analyst support. Who knows what happens when they, inevitably, jump on the bandwagon in the last days of 2013.

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