Hedge Fund Operator Einhorn Loads Up on Apple

By all accounts, it looks like Apple will have a blow-out quarter. The drivers include the iPad and of course, the iPhone 4. Also, in light of the momentum, there should be lots of traction with Mac sales.

But when expectations are so high, is this really the time for investors to jump in? Perhaps so. A top-notch hedge fund operator, David Einhorn, is loading up on the stock. Actually, his average price is $248.09. While Einhorn is not perfect (to use a phrase from Steve Jobs), he does have a strong track record.

His investment thesis is essentially based on valuation. According on his analysis, Einhorn thinks the stock is trading at 15 times earnings for 2010. Funny enough, he says that Apple is "iTractive."

Kidding aside, Einhorn's analysis looks solid. No doubt, the smartphone revolution is in a secular growth phase and Apple is clearly at the forefront. And true, sales will eventually taper off, but this probably won't happen in the near future..

Tom Taulli is also the author of several books, including the Complete M&A Handbook. He can be reached at his website.