"The invisible road I pave" is the Snowball ID of the famous investor Duan Yongping. He is known for investing in Apple and Kweichow Moutai, and his remarks often spark heated debate. Journalists have recently found that Duan Yongping's recent posts are mainly about his views on stock trends and investment strategies, including selling call options and selling equivalent put options if exercised, waiting for a pullback. Duan Yongping believes that the current 30-year Treasury bond yield is 4.44%, equivalent to 22.5 times PE, which is also the opportunity cost of holding any company. The short-term Treasury rate is 5.36%, equivalent to 18.66 times PE. "Holding=buying, I'm a bit tangled."$Apple (AAPL.US)$Call options are financial contracts that give the buyer the right, but not the obligation, to buy stocks, bonds, commodities, or other assets or tools at a specific price during a specific period. The call option seller is obligated to sell the asset when the buyer exercises the option. The profit of the call option buyer depends on factors such as the price of the underlying asset, the strike price, the expiration date, and the premium. Call option buyers profit when the underlying asset price rises, while sellers profit when the underlying asset price falls or the option expires. When the price of the underlying asset rises, the call option buyer will profit. If the price of the underlying asset falls below the strike price at expiration, the seller will profit from the premium, since buyers usually do not exercise the option. In the US stock market, each call option usually represents 100 shares of underlying stock. Therefore, buying or selling a call option contract actually means buying or selling the right to 100 shares of the relevant stock.
Regarding Apple's stock price, Duan Yongping said, "At present, this price can be considered short-term. Actually I will sell some long and short." Duan Yongping believes that the current 30-year Treasury bond yield is 4.44%, equivalent to 22.5 times PE, which is also the opportunity cost of holding any company. The short-term Treasury rate is 5.36%, equivalent to 18.66 times PE. "Holding=buying, I'm a bit tangled."
According to Duan Yongping's delivery note, on June 12, 2024, he sold 19,998 Apple call options due on June 14, 2024, with a strike price of $230. The price of the options was $0.355, with a total market value of $7.099 million and a total cost of $8.155 million.
Put options are financial contracts that give the buyer the right, but not the obligation, to sell stocks, bonds, commodities, or other assets or tools at a specific price during a specific period. The put option seller is obligated to buy the asset when the buyer exercises the option. Put option buyers profit when the underlying asset price falls, while sellers profit when the price rises or the option expires. The profit of the put option buyer depends on factors such as the price of the underlying asset, the strike price, the expiration date, and the premium.
It is worth noting that as of the close of June 13 local time, Apple's stock price rose 0.55%, to $214.24 per share, reaching a historic high, with a total market value of $3.29 trillion, overtaking Microsoft by a narrow margin and reclaiming the global market cap throne. In the previous trading session, Apple's stock price rose above $220 per share, and currently there is still a more than 7% increase from the exercise price of $230.
While Apple's stock price continues to hit new highs, Duan Yongping's other "favorite" Kweichow Moutai has been declining. When asked if he would switch Apple to Kweichow Moutai, Duan Yongping said he would not, and that its level of governance cannot be compared with Apple.
The latest 13F report of Duan Yongping's investment company for the first quarter of 2024 shows that the total value of its 13F securities is $14.196 billion. Its largest holding is Apple, ranking as the 19th largest institutional shareholder of Apple, with a holding of 64.58 million shares. Among the top five holdings, Apple's position accounts for 78.01%, Berkshire Hathaway's position accounts for 12.12%, Google's position accounts for 5.5%, Alibaba's position accounts for 2.98%, and Disney's position accounts for 0.65%.
As of the end of the first quarter, there were 4,493 institutional holders of Apple's stock, with 1,612 institutions increasing their holdings, an increase of 8.04% from the last period; 2,154 institutions reducing their holdings, and 516 new institutions holding Apple's stocks, while 452 institutions chose to exit. The total number of institutional holdings was 9,120.4073 million shares, a decrease of 4.39% from the previous period. The proportion of institutional holdings was 59.46%, down from the previous period's 61.70%.
In specific institutional holdings, Vanguard Group Inc. is still the largest shareholder with 131,885.96 million shares and a market value of $226.158 billion, accounting for 8.60%. Behind it is BlackRock Inc. with 104,191.94 million shares, accounting for 6.79%. It is worth noting that Berkshire Hathaway's holdings decreased by 116.1916 million shares, a decrease of 12.83%.
However, since the second quarter, Apple's stock price has continued to rise, and as of now, it has an increase of more than 30% from the low point of the stage.
Analysts believe that although apple's ai is a huge leap forward for users, its profit potential is not yet clear for investors. Despite apple's release of the new AI system Apple Intelligence at WWDC and the integration of ChatGPT-4.0 from OpenAI into Siri, which caused a significant increase in stock prices, the current price of apple's stock is still too high and there is a bubble. Through analysis of apple's revenue growth, EBIT profit margin, capital expenditure, weighted average cost of capital (WACC), and other aspects, even in the most optimistic scenario, there is still a 12.5% valuation premium for apple's stock. The market may be too optimistic, mainly because it ignores the data security risks brought by AI integration. Despite Elon Musk's comments may not have a significant impact on apple's sales, user concerns still exist. It also ignores apple's relatively low dividend yield and limited potential for growth in company stock buybacks. Finally, it ignores the historical cyclical pattern of apple's profit growth and the possibility of the company shifting towards service income.
The analysis also points out that there are some risks in his analysis model, such as the WACC assumption may be too conservative, and apple's EV/FCF multiple may continue to rise. However, even taking these risks into account, it is still believed that apple's stock price is too high, so they maintain a "sell" rating for apple's stock.
Edited by Jeffrey