Time to Take Some AAPL Stock Profits...Apple (NASDAQ:AAPL) investors, take notice…

Take one look at these 4 charts (spoiler alert: the last one’s the real kicker), and you’ll see why it’s a smart time to take some profits off the table, even just for the short term.

Ho-Hum… another fabulous quarterly report from Apple.

In this case, a fourth quarter (September 30) in which the Cupertino Colossus delivered both an earnings and revenue beat, clocking in at $1.96 per share versus estimates of $1.88, and $51.50 billion versus estimates of $51.11 billion, respectively.

Indeed, the biggest surprise came from its sales of iPhones in supposedly slowing-down China. There, sales nearly doubled to $12.5 billion, and the company expects to meet its goal of opening 40 retail locations by mid-2016.

As for the coming first quarter? Expectations are for a range of $75.5 billion-$77.5 billion in revenues, at the lower end of earlier guidance.

So it’s all good for Apple and its shareholders…

… or maybe not.

As Apple stock starts to approach $120 per share, or just 11% or so below its 52-week high, it might be prudent to take some profits off the table, if only for the short term.

Here are the 4 charts that tell a tale of caution…

Revenue Growth Can’t Last Forever

If you ever find yourself prepping for a sales presentation, just hope that it starts out with a chart that looks a bit like this:

Time to Take Some AAPL Profits Off the Table...

It’s pretty evident what’s going on at Apple: Stupendous revenue growth, powered by products that have changed the way everyone on the planet works, plays, listens to music, uses a phone… the list goes on.

Bottom line: Apple is an everyday part of the life of literally billions of people.

The chart above shows a 31% compound annual growth rate over the 8-year period—a pretty stunning figure.

The concern is not just how long that kind of torrid growth can continue, but even with lowered expectations, just how the market would react if Apple found itself in a long-term—say 2-year—swoon.

Time to Take Some AAPL Stock Profits...The market tends to punish Apple on any sign of slowing revenue, even though it values Apple shares with a pretty conservative 11x forward P/E ratio.

Indeed, it’s as if Apple’s price is valued correctly relative to a “normal” growth, but beaten down for anything not approaching what might be considered whispered numbers.

Staying ahead of the revenue surprises is important, and one reason to consider taking some money off the table.

And how might that growth be slowed?

Let’s look at our second chart for that answer…

The Phone Slows Down

Last year Apple sold an astounding 74.5 million iPhones in its first quarter (December 31 2014), which coincides with the holiday season.

For its fourth quarter this year, Apple sold 48 million phones.

Momentum for the iPhone is still strong.

Getting back to our prep work for a presentation, here’s a product chart you’d be proud to put up on the screen:

Time to Take Some Apple Stock Profits

Again, some huge growth numbers, and in the case of its average selling price on a quarter-to-quarter basis, great news for earnings (which we’ll get to soon).

But it isn’t sustainable simply because there are only so many users out there, and the competition is just brutal.

This chart gives a fairly good visual of what’s out there…

Time to Take Some Apple Stock Profits

Note that even though Apple controls a pretty sizeable chunk of the overall market and the competitors are bifurcated out, their percentages are growing.

It’s a finite world for smart phones out there, even with expansion in China and some untapped markets like India.

If Apple is going to lean on iPhone sales for much of its growth and earnings power, it will need to keep its substantial lead.

The market will not like even a small bite coming out of Apple’s position, and again, in the short term, could punish the shares.

That possibility is yet another reason to take some money off the table, because it leads directly to that bottom line: earnings…

Time to Take Some AAPL Stock Profits...Is it Really EPS Growth?

At $11.2 billion in quarterly earnings, and a shade over $53 billion for the full fiscal year, Apple telegraphed a robust first-quarter for fiscal 2016.

Yes, margins are fantastic, with 39%-40% gross margins expected for the coming quarter and into the full year.

What’s truly sending the EPS into the stratosphere, however, is that earnings are being generated into an ever-shrinking pool of shares.

Now feast your eyes on the final chart…

Time to Take Some Apple Stock Profits

Indeed, Apple’s reduced its shares outstanding by around 70 million during the past 18 months, and its purchase of $13 billion in shares during the most recent quarter was $10 billion more than the quarter before.

It’s a trend over the past three years in which Apple has spent $103 billion to repurchase shares.

Evan Niu of Motley Fool noted “This activity is what’s driving EPS gains. The (Apple) EPS growth of 38% easily outpaced the top line (revenue) jump of 22%”

Again, this isn’t to suggest that Apple can’t grow the bottom line.

Time to Take Some AAPL Stock Profits...However, with an approval to shell out up to $200 million through 2017, it certainly plans on helping any earnings slowdown with fewer shares in the calculations.

While that’s certainly a long-term buffer, in the short run, investors may drive shares lower if EPS slows.

At the end of the day, Apple is one of the better—maybe the best—long-term holdings you can have in your portfolio.

But every once in awhile, it pays to take some money off the top before a (usually) inevitable pullback in a stock…

Even one as sound as Apple.

Use this rally time wisely.

As of this writing, Marc Bastow is long AAPL.

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