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Split decision on Apple stock split

Monday, June 09, 2014 - 02:14

June 9 - Apple's stock ran up ahead of its stock split, but now that its taken effect, there is disagreement on what it will mean for investors. Bobbi Rebell reports.

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Investors can now get Apple for under $100 a share- after a 7-1 stock split over the weekend. But while the stock may be more attainable to retail investors, whether to buy it now is up for debate. JMP Securities' Alex Gauna says it's time to lighten up: SOUNDBITE: ALEX GAUNA, MANAGING DIRECTOR AND SENIOR RESEARCH ANALYST, JMP SECURITIES (ENGLISH) SAYING: "I think this is one of those classic sell the news scenarios. You know, Apple has shown great leadership in becoming increasingly shareholder friendly. They've increased the dividend and the buyback has been increased. And now we've had the split, and I think that now that that's in the stock we have to look forward to the product innovation that's coming and unfortunately lately, Apple has not been inspiring as much confidence as JMP securities would like to see on that front". He blames the current management, saying there have been a number of lackluster product cycles. SOUNDBITE: ALEX GAUNA, MANAGING DIRECTOR AND SENIOR RESEARCH ANALYST, JMP SECURITIES (ENGLISH) SAYING: "What's going on in the competitive front in the Android community is more exciting, and as a result, Apple's market share has continued to erode in smart phones, in tablets, and that's the dangerous scenario for a company that relies on having a dominant market share position so that it can continue to attract the developers that help it sustain its gross margins." But over at BMO Capital Markets, Keith Bachman has an outperform rating: SOUNDBITE: KEITH BACHMAN, ANALYST, BMO CAPITAL MARKETS (ENGLISH ) SAYING: "We think the back half look at the year looks pretty good. Apple has products coming out two product families coming out and we think that creates sustained momentum for investors " Those products include large screen phones, which are expected out this fall. He is also thinks wearable products will be add a few dollars per share to earnings next year, and that could be a catalyst to drive the stock beyond his current $98 target. SOUNDBITE: KEITH BACHMAN, ANALYST, BMO CAPITAL MARKETS (ENGLISH ) SAYING: "On the wearable category, the premium is going to be on industrial design and user interface and the ability to tether all these different products. That's what Apple does really well. And so we think as Apple gets in this market they'll create a meaningful growth opportunity for the next two to three years and we think it can really help the stock." One other thing to watch: Now that Apple's stock price is below $100, it could be a candidate to join the Dow.

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Split decision on Apple stock split

Monday, June 09, 2014 - 02:14

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