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Here's Why Apple Shares May Soon Soar

NEW YORK ( TheStreet) --There's a lot of talk about Apple (AAPL - Get Report) starting with news that Chief Financial Officer Peter Oppenheimer will retire after 10 years with the company.

Oppenheimer's successor will be Luca Maestri, who joined Apple about a year ago as vice president of finance and corporate controller after a two-year stint as the CFO of Xerox (XRX). Maestri's reputation as someone who knows the international markets offers an important insight into his selection as CFO.

One question surrounding the new CFO appointment is whether there will be a new approach in what Apple does with its enormous cache of cash. The company's cash position, as stated in its first quarter 2014 financial report, had grown by $12 billion to nearly $159 billion. No wonder Carl Icahn stated earlier this year that Apple is "...perhaps the most overcapitalized company in corporate history."

According to Bloomberg, Apple may announce by year's end a plan to use its abundant free cash flow and total cash to satisfy the demands of investors who want Apple to stop acting like a bank and start becoming more of a growth machine. Shares are down over 5% for the year to date as of the Wednesday close of $532.

With a large percentage of its cash parked off-shore, according to the Wall Street Journal, the company has started hiring critical employees in areas of the world where the prospects for lucrative growth are greatest.

The company has boosted hiring in countries like China and Taiwan, head-hunting for more engineers and supply-chain managers who can speed the development of components needed for new versions of its iPhone and iPad. Faster development and production leads to more timely and frequent releases of its best-selling, high-end products. This could lead to quarterly earnings surprises and more optimistic future guidance.

Now that Apple's North American division accounts for only about 37% of revenue, and 40% of its retail stores are international, it makes perfect sense for the company to use some of its offshore wealth on expanding globally, especially in the massive Chinese market.

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AAPL $118.48 0.57%
FB $104.25 -1.10%
GOOG $743.96 -0.84%
TSLA $230.35 -0.54%
YHOO $33.81 2.60%


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