Markets have found a bottom value (just north of $400), and the most well-known brand in the world will now regain its footing and move back toward the higher end of its historical valuation for the rest of 2013.
The main fundamental driver for this will come in the back end of 2013, where the Street's earnings could rise as high as 15% (after the 14% declines that will likely be seen in the first half of this year).
Markets are clearly at an inflection point with the stock valuation of Apple, and this presents some excellent opportunities for investors looking to capitalize on the rebound. While the June quarter might not be stellar, any lags in the stock price will only extend the window of opportunity for new buy positions.
Most promising will be the new line of products scheduled to roll out in the second half of the year. This will be the central reason to own the stock. Additionally, there is a growing chance Apple will start giving back more cash to investors, in a move that is long overdue. An announcement in this area is another factor that might come before the second half of the year, but once this is seen, it might be too late to latch on to the upside momentum. Announcements to raise dividends could come as soon as the third week in April (when Apple reports its March quarter results). It's going to be a modest increase (from $10 now to just over $14), and based on largely the cash the company generates from U.S. markets. Low-End Competition From Samsung Fundamentally, what's probably going to be the more important question investors will ask: How is Apple going to be competing with Samsung in the low-end phone market? So, if investors feel a greater confidence in the product release schedule, we will see the next main driver for shares here over the next year.
A good portion of this will likely be based on whether Apple chooses to offer a cheaper iPhone, which is starting to look inevitable. The timing for this announcement and release has been tricky to anticipate, but this is most likely something we will see by the beginning of the December quarter. A move like this would be seen in conjunction with China Mobile (CHL), the largest mobile carrier in the world, so the combination of all this could create a big splash for Apple and its stock price.
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