Apple stock could soon be known as Supertino gold in the eyes of Wall Street. The home of Apple’s headquarters in Cupertino is looking more like Supertino, in that the momentum which is building is driving a resurgence of the “golden Apple.” The upcoming World Wide Developers Conference (WWDC) will begin on Monday, where there will be an unveiling of fresh products.
Differentiation in software will be the spark that sets Apple apart from its competition. iPhone sales have remained robust, but rumors are stirring that Apple will reveal a health tracker next week. This health tracker will offer more ways for people to be interconnected with their home devices from their phones and apps, which will raise the bar in the evolution of the “internet of things.” Since the way of the future is the “internet of things,” it stands to reason that Apple stock could become a reality for Supertino gold.
Hardware refreshes are likely to act as near-term drivers of stock performance. At the end of April, Apple had announced that there would be a 7-for-1 stock split, which was not intended to create value for the company, but it would enable the average person to buy a share for a lot less. Right now Apple is trading for about $564 per share. That means following the split, an individual would end up with seven Apple shares for $80.57 each, according to Paul R. LaMonica. Apple is choosing to flood the market with shares and offering those shares at a lower price. This does not change the size of the investment. Apple’s balance sheet is not impacted. What remains the same is Apple’s market value.
On Friday, AAPL, Fortune 500 stock traded up to $644 a share, which was the highest it had been in over a year-and-a-half. This is just the beginning of the rally according to Goldman Sachs. The investment bank had initially predicted a target price of $635, but that has been raised to $720 per share. Anything above $700 is considered significant and in September, 2012, Apple stock had closed at a record high of $702 per share. Many have questioned whether they could come close to that ever again.
In the pricey market of stocks, Apple (NASDAQ: AAPL) has continued to trade at a very modest valuation. This will be an excellent point of entry for investors, offering them a better risk profile. Although no one has a crystal ball to know the future of today’s golden Apple, for now it is performing exceptionally well. In finance, there is a chance that an investment can lose its value, which then becomes risk. For investors to receive a meaningful return, Apple needs only to grow its bottom line and sustain it over the long haul. With the help of Apple’s massive share repurchase program which is backed by unprecedented cash flow, analysts predict Apple to grow EPS by15 percent per annum over the next five years. The historical rate of inflation will be put to shame should this happen and it is very well possible. Both analysts and Apple expect this to come to fruition.
Apple’s confidence in its product pipeline is higher than ever before. Eddy Cue, Apple’s VP of Internet Software and Services, disclosed this past week at a tech Code Conference, that what is to be rolled out in the pipeline at WWDC this upcoming week, is the best that he has witnessed in the entirety of his 25 years at Apple. He said that Apple began with product that revolutionized the way consumers interact with technology, that there was the unparalleled ecosystem in integrated software, hardware and services, and now, there is more. More to be revealed at the WWDC.
No doubt, the acquisition with Beats has a piece in all of this action. Cook has made it clear that Apple scored “big time” with the acqui-hire of Iovine and Dre. He likened it to locating the precise grain of sand on the beach, which is a rare find and hard to do. All components seem to be lining up for the super-tech giant. The tech savvy, the investor savvy and the consumer savvy will be watching to see if Apple stock indeed becomes Supertino gold.
By Jill Adriance