The recent 7-for-1 stock split of Apple Inc. (NASDAQ:AAPL) has got mixed opinions and few analysts even felt that the stock is avoidable for the next couple of months. However Timothy Arcuri of Cowen and Company feels that the stock is still very exciting even after the split and people will still buy it.
Arcuri was on CNBC’s Squawk box last evening and he had an interesting analysis of the stock split. Here is what he stated:
“Probably the reason why they split the stock is, people keep talking about this $700 peak and you know I go around talking to investors and everybody asks whether you can break through the prior $700 peak. So, I think also by splitting they took that mental sealing off the table.”
However, he also considers that there is a lot to be interested about the second half of the year as Apple Inc. (NASDAQ:AAPL) is expected to launch an iPhone 6 and probably a wearable product, which might be major releases in the mobile and wearable sectors in the second half of 2014. These products are expected to be launched in September this year.
Arcuri said that though people argued after the launch of iPhone 5 that the company lacked innovation, Apple Inc. (NASDAQ:AAPL) still managed to hold the high end smartphone share without bringing in a larger display smartphone. There are about 120 – 130 million users that are still on pre iPhone5 and hence don’t have LTE capable phones. So they all would be potential customers to upgrade to a phone with a larger display and LTE capability.
When asked if the stock split was primarily done to join the Dow, Arcuri refrained from getting into that discussion. He said:
“I can speculate on way or the other on that. I think that certainly it makes its (Apple’s) inclusion much more likely at this price. Other people have said that as well. “
Arcuri was asked if he would still buy Apple Inc. (NASDAQ:AAPL)’s stock and he gave a big yes and he also supported the stock pretty well. He also said that the announcements made at the recent WWDC such as health kit, home kit and many more such exciting and wonderful innovations would make iPhone the hub of anyone’s life. Before ending he also stressed on the 120 million users Apple Inc. (NASDAQ:AAPL) can easily target for the all new and differently styled iPhone 6.
The investors in Apple might be happy after the first day trade post 7-for-1 split and hence the prices might go up.