Apple Inc. (AAPL)’s Stock Poised for a Major Breakout: Morgan Stanley

Apple Inc. (NASDAQ:AAPL)’s stock sailed past $100 today, up nearly 1.5% at least partially on the strength of a new investor report released by Morgan Stanley which offers a glowing assessment of the company’s outlook ahead of the release of the next iPhone models. Business Insider examined the Morgan Stanley report and divulged eight of its key reasons as to why Apple Inc. (NASDAQ:AAPL)’s stock won’t suffer the same fate it did after the iPhone 5 release two years ago.

Apple Inc. (AAPL)

In finance-related measures, Morgan Stanley analyst and report author Katy Huberty points to the low institutional ownership rates of Apple Inc. (NASDAQ:AAPL) stock, at just 2.3% of the portfolios of the top 100 institutional holders of shares. That is little more than half its peak of 4.5% in 2012, and well below even the S&P 500’s 3.4% rating.

There’s also the matter of Apple Inc. (NASDAQ:AAPL) greatly increasing their cash dividends to $11 billion from $2 billion in 2012, and repurchasing $31 billion in shares, for a total yield of 8.5% compared to 0.5% when the iPhone 5 was launched, which should result in share prices increasing. The report also touched on the sizable investments Apple Inc. (NASDAQ:AAPL) has made over the past two years, and particularly this year in R&D, M&A, and talent acquisition.

Those factors aside, it still comes down to products, and the report believes Apple has two big winners on their hands with the iPhone 6 and its larger screen, as well as the rumored iWatch, which the report estimates could sell 60 million units of within a year. While 60 million is on the upper end of the estimation spectrum, even lower estimates have Apple Inc. (NASDAQ:AAPL) selling at least 35 million iWatches within a year.

One factor to consider in opposition to the rosy report glow is that the iPhone 6 and its larger screen will likely further erode already waning iPad sales. However, if the iWatch can replace it and provide the high margins that are expected of it, those sales won’t be missed.

Huberty maintains a target price of $110 on Apple Inc. (NASDAQ:AAPL) shares.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies 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!