This Day On The Street
Continue to site
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

An Activist Investor Gooses a Golden Apple

NEW YORK ( TheStreet) -- Finally, after so long a wait, the crown jewel of the mobile tech tsunami is seeing its stock get some respect.

Apple (AAPL - Get Report) has come a long way up from its 52-week low, when seemingly no one had anything nice to say about it.

Yet, when billionaire activist investor Carl Icahn reveals he's taken a large position in Apple and believes the company's stock is "extremely undervalued," suddenly the Rodney Dangerfield of tech titans turns into a Chris Rock! AAPL closed Tuesday up nearly 5% to $489.57.

Gosh sakes alive, the three-month average daily volume on AAPL is a little more than 12 million shares. Mr. Iconic Icahn steps into the picture and -- swish bang -- the volume skyrockets above 36 million shares.

Perhaps Steve Jobs is channeling himself through Icahn but Tim Cook has awakened to a powerful ally who wants to keep in touch with him. I can't imagine him minding Icahn's revelations.

When Carl Icahn suggests the stock buyback has to be boosted quickly, you can run but you cannot hide. That's one of the reasons Apple spokesman Steve Dowling confirmed Icahn and the CEO communicated on Tuesday, saying that Cook had a "very positive conversation" with Icahn.

Apple said in April that it would expand its stock buyback program to $60 billion, marking the largest buyback authorization in history. The buyback, combined with an increased dividend, is part of the company's plan to return $100 billion in cash to shareholders by the end of 2015.

Let's see how AAPL shares have been performing in just the past three months. Its share value has almost turned suddenly to gold!

AAPL Chart AAPL data by YCharts

Perhaps Icahn has also looked at AAPL's price to tangible book value and shouted, "This stock could go as high as $600 in the blink of an eye or in the same time it takes me to write a check!"

After all, why should a smartly managed company that has over $181 a share in trailing 12-month (TTM) revenue be trading at a forward (one-year) price/earnings ratio of barely more than 11? Any wonder Icahn is tweeting that AAPL is not just undervalued but "extremely undervalued?"
1 of 2

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
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.37 -1.50%
FB $116.41 -0.27%
GOOG $692.60 0.23%
TSLA $238.23 -3.80%
YHOO $36.39 -0.55%


Chart of I:DJI
DOW 17,711.01 -119.75 -0.67%
S&P 500 2,056.42 -19.39 -0.93%
NASDAQ 4,762.94 -42.3510 -0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs