"We would be buyers of the stock on any re-balancing weakness," wrote Ticonderoga analyst Brian White in a note released on Tuesday. He also added that strong iPad 2 sales highlight the company's ongoing momentum.
|Apple's Nasdaq rebalancing represents a buying opportunity, according to analyst firm Ticonderoga.|
Apple's weighting in the Nasdaq-100 will be reduced to 12.33% from its current weight of 20.49% on May 2, according to a statement released Tuesday by the Nasdaq OMX. The Nasdaq said that the change will bring the company's weighting closer to its market cap. Apple will remain the largest component of the index.
One of the tech sector's biggest success stories, Apple has seen its stock rise almost 3,000% over the last 10 years, boosted by the popularity of products like the iPod, iPhone and iPad. The company's share growth, however, has slowed recently, gaining 1.79% over the past three months.Ticonderoga's White explained that Apple shares have been battling headwinds including concerns about its Japanese supply chain, Steve Jobs' health, the timing of the upcoming iPhone 5 launch and now, the Nasdaq re-balancing. "As these concerns subside and investors again focus on the fundamentals surrounding Apple's business, we believe the stock will reach new, all-time highs as the year progresses," said the analyst. The move by Nasdaq OMX could lead to significant selling pressure on Apple shares by money managers tracking the index, according to The Wall Street Journal. At midday Tuesday, however, Apple's stock was up 35 cents to $341.54. The Nasdaq had gained 0.63%. Nasdaq OMX is also planning to change its weighting for Cisco (CSCO), which will grow from 1.56% to 3.66%. Oracle (ORCL) and Intel (INTC) are also gainers, with their weightings expanding from 3.32% to 6.68%, and from 1.75% to 4.2%, respectively. The index, however, is lowering its Flextronics (FLEX) weighting from 0.28% to 0.21%, while F5 Networks' (FFIV) weighting will decline from 0.34% to 0.29%. --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV