Apple Inc. (AAPL) May Become a $60 Stock by 2013: Analyst

OK, so the buzz surrounding Apple, Inc. (NASDAQ:AAPL) splitting its stock is pretty old news. The discussion has gone on for a while that with Kraft Foods Inc. (NASDAQ:KFT) likely to leave the Dow Jones Industrial Average (DJIA) as one of 30 component companies, Apple would be a candidate to fill that void. But in order to be a reasonable candidate, Apple would have to split its stock to lower the price to a number that doesn’t skew the index too heavily. If Apple did not split its stock, its price would make up more than one-fourth of the index.

Should this Concern Apple Inc. (AAPL) and Google Inc (GOOG)?

Well, all of that was just talk, rumor and innuendo. Until Wednesday, when a top market analyst commented on CNBC about the concept of stock splits at Apple, Inc. (NASDAQ:AAPL). Then, the talk seemed take on an air of legitimacy. Tony Sacconaghi, a top analyst at Bernstein Research, said in a live interview, “Our belief is that there’s a reasonable likelihood that Apple will split the stock. We’re confident that the company is looking at that topic and that they’ve started soliciting input on that topic. That last time they solicited input from investors was on the dividend and in short order we had one.”

He added that the stock split decision could be made in the next six months – by early 2013. A stock split would lower the price of the stock by a ratio equal to the split. For example, with Apple, Inc. (NASDAQ:AAPL) stock trading at $600 a share, a 2-1 split would lower the price of a single share by half, or $300. A 4-1 split would drop it to $150, and so on. How far would the split go?

There is talk floating that the split could be as much as 10-1, which drops the price to $60 a share. That not only would make Apple, Inc. (NASDAQ:AAPL) attractive to individual investors (widening the market of potential buyers), it also would make Apple a near-perfect addition to the Dow Jones index, as a 10-1 split would give Apple stock about a 2.5 percent weight on the DJIA, which is very close to the weight that Kraft Foods Inc. (NASDAQ:KFT) had- about 2.3 percent weight.

However, with that many new shares in the market, and Apple, Inc. (NASDAQ:AAPL) being such a powerful brand worldwide, and the increased number of potential investors growing by an exponential number, if Apple stock were to be $60 at some point, it would be short-lived. But at the same time, it would be good news for all investors who get in – because you already know what levels the stock can get to – and it likely won’t take long to get back to its original price. Apple is the most popular stock among hedge fund. Billionaire hedge fund managers David Einhorn, Dan Loeb, David Tepper, Leon Cooperman, and Steven Cohen are among hedge fund managers with bullish positions.

Related Article: 9 Cheap Stocks Taking Off Right Now: Apple is One of Them

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!