Sources on Wall Street have revealed that that Cupertino-based Apple has ambitions to replace its CEO, Tim Cook, because since September the stock price of the company has witnessed a decline of about 45 percent. Back in September 2012 the price of Apple’s stock was $705 and now it is just below $400. This indicates that both mutual funds and investors have shifted their investment from Apple’s stock to other area. Apple is going to announce its first quarter earnings on Tuesday and numbers in the report will most probably give us an idea what the Board of Directors of the company are thinking about Cook and his future with the company.
On the other hand, even though the price of Apple’s stock has seen a big decline, 37 of the major tech analysts from the top brokerage houses still have confidence in the company’s share, as they still have not recommended their clients to sell the stock. Moreover, out of these 37 analysts, 25 still rates Apple’s stocks as a solid buy, whereas six other lists the shares of the company as a moderate buy. Also another six recommends their clients to hold their Apple stock.
That’s how fundamental analysis works on Wall Street, but some are of the view that the good time to buy Apple’s stock is when the analysts will rate its shares as a sell. For the reason that stock prices rarely move in-line with their growth or earnings, but analysts do not recognize this fact. For instance consider S&P IQ’s analyst Scott Kessler case, who still recommends Apple’s stock as a strong buy. He says, “We expect Apple’s growth to exceed that of many of its peers, we see the stock as a compelling value.”
Additionally Kessler also expects to see decent demand for both iPad and iPhone of Apple till 2015 in spite of the slow economy and heavy competition. Kessler also believes that the cash Apple has accumulated will also shrink in the future, as the California-based company could utilize the money either to buy back its shares or give higher dividend to its shareholders.
However, the S&P IQ’s analyst does foresee a sharp decline in the revenue of Apple from 45 percent to 14 percent during this year. This sharp decline could be indicate a decrease in main line growth. Kessler anticipates that per share profits of the company will grow from last year’s $44.15 to just $44.29 this year, as big funds like Invesco and Fidelity sell Apple’s stock.
Source: PhoneArena
Photo: SparkBoutiq
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