Apple regaining momentum after stock split

Even though the value of the tech giant's shares is the same, the price may finally be right for some investors.

By TheStreet.com Staff Jun 12, 2014 11:55AM

The exterior of the downtown Apple Store in Central Hong Kong is viewed on May 27, 2014, in Hong Kong, China © George Rose/Getty ImagesBy Shazir Mucklai, TheStreet


Apple's (AAPL) investors are jumping for joy these days because the company, which seemed to have lost its way in innovation, is back on track.

There are many reasons to believe that Apple has started to recover its momentum.The Street on MSN Money


First, on Monday Apple shares began trading at a new price following a 7-for-1 stock split. Apple executed the split in order to bring in more investors and create an attractive price. The company said, "We want Apple stock to be more accessible to a larger number of investors."


In an interview with the "Christian Science Monitor," Peter Cohan, adjunct professor at Babson College, stated, "There is a thought process that if the stock is trading below $100 a share it is inexpensive, which is why going "from three figures to two figures breaks a mental barrier." 
 
The stock has flourished since Apple announced the split in April. Shares closed Wednesday at $93.86, up about 25 percent on a split-adjusted basis from before Apple announced the split, and up more than 18 percent for the year to date. At the same time, the company has been pleasing investors with its share repurchase plan, its acquisition of Beats Electronics and an increase in its quarterly dividend.


Apple-authorized stock will increase from 1.8 billion to a staggering 12.6 billion and Apple's outstanding stock from about 861 million shares to about 6 billion shares.


Then there's the Beats Electronics acquisition, in which Apple will pay a total of $3 billion for the headphone maker and music streaming service. This service is much like those offered by Pandora (P) and Spotify. Another reason why Apple bought Beats is investors and analysts were screaming for Apple to do something innovative again. This acquisition has enabled Apple to get back on track.

What's next? Possibly "wearable technology."


At the time of publication the author had no position in any of the stocks mentioned.


More from TheStreet

2Comments
Jun 12, 2014 2:32PM
avatar
That's right boy's & girls. Come and get in while you can. This stock will be surging within 6 months. 
And if you don't, don't come here crying about it. Don't let Icahn get all the profits, because you can too.
Jun 13, 2014 12:45AM
avatar
momentum?  yes, but to the downside .... the stock is down 2.6% the last two days ...

over-rated ...

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
267
267 rated 2
467
467 rated 3
605
605 rated 4
645
645 rated 5
691
691 rated 6
617
617 rated 7
459
459 rated 8
313
313 rated 9
130
130 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BXTHE BLACKSTONE GROUP L.P10
CELGCELGENE CORP10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.