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

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Most Expensive Rum Brands in the World

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!