This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple Investors Set for 2012 Cash Battle

CUPERTINO, Calif. ( TheStreet) -- 2012 looks set to be an eventful year for Apple (AAPL - Get Report), with new CEO Tim Cook expected to launch a host of new products, including the iPhone 5, iPad 3 and the eagerly-anticipated Apple TV.

Many investors, though, are more preocuppied with Apple's vast $81.6 billion cash haul, particularly with Cook hinting that that he could open the company's wallet by making a strategic acquisition or even bringing back the dividend.

Apple has cash and investments worth $81.6 billion.

"There are two schools of thought," explained Michael Yoshikami, CEO of YCMNET Advisors. "The allocation of capital matters, but what really matters is that Apple is a growth company - what will really drive that forward are innovative products and chipping away at competitors' market share."

Yoshikami cites the new versions of the iPad, iPhone, and Apple TV as catalysts, and also predicts that Apple may bring iPad technology to the MacBook Air with improved screen resolution and touch pads.

All the signs certainly point to Apple enjoying a strong start to 2012, boosted by robust holiday season sales.

Longer term, though, some investors are questioning whether gadgets alone are enough to maintain Apple's stellar share growth of recent years.

"For the first time I can remember, I think a new stance on capital allocation would be just as strong of a catalyst for the stock going forward, than anything on the product front," explained Chad Brand, president of Peridot Capital Management and author of the Peridot Capitalist blog. "Apple has gotten large enough that investors have priced in the fact that they will dominate their markets -- I don't think a company this size, even one as magical as Apple, can really surprise investors on the upside with sales of iPads or iPhones anymore."

Brand notes that everyone expects Apple gadgets to sell like "gangbusters" in 2012, and warns that even sexy new offerings such as Apple TV may not move the needle for the company's stock.

"Given that everything has essentially gone right for them in recent years, Wall Street is no longer affording the stock a premium valuation," he said. "How can they really surprise us on the product side in 2012? I doubt they can -- TVs would be a large, new market, but that new product is the worst kept secret today (and already factored in by investors as a result)."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $125.80 -2.25%
CSCO $28.89 -0.96%
MSFT $47.60 -1.33%
FB $77.56 -1.59%
GOOG $530.80 -1.85%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs