Their main product as in their computers? Oh, you're talking about their mp3 players. Yeah, those are quite oversaturated, but funny thing being that they keep pushing refreshes continuously and people still buy them, 22 million of them in one quarter. You heard of this other thing they're selling? iPhone? Their P/E ratio in the past a couple of years have been soaring because of the optimism and momentum people think Steve Jobs bring to the table. Even if it's self correcting it'll just go back up again as Apple cranks more products throughout the year.
Like their $1800 laptop that has about as much utility as the $300 ASUS EEE PC? (ducks)
Steve Jobs has done an amazing job turning around the company and much of this enthusiasm is warranted. However, the stock got way ahead of itself.
I considered shorting the stock also, but that is just way too risky. A stock only has to double to wipe out the entire investment. And, if a stock is already irrationally high, it could very well go substantially higher in the short term. However, put options may be a good way to bet on the downside while limiting risk.
At this point, I do think they are pretty close to an appropriate valuation. If they get another hit with their iPhone and their computer market share increases, they will do very well. But, I think this is far from a sure bet.
