AAPL: Apple - Why We Are Changing Our Stance From Bearish To Bullish

Apple - Why We Are Changing Our Stance From Bearish To Bullish
by Sneha Shah

Introduction
Apple (AAPL) is the world's largest company by market capitalization and is also one of the most followed and traded stocks in the world. The company had run up substantially last year with analysts setting targets of $1000 and greater. We had advocated a short position when the stock was trading near its all- time highs above $700. The stock has gone down substantially since that time and is now trading at ~$450. The sharply bullish sentiment has now turned quite bearish and many of the disadvantages and risks have been discounted in the current stock price. We think that Apple now makes a decent buy at the current levels, given that the company is still a dominant force in the consumer technology markets. Apple is also poised to come out with new products such as an iWatch and a new Apple TV, which can serve as catalysts for the stock price. Currently the market is totally neglecting the possibility that the new products can be a success. Also the valuation has become quite attractive especially since the company has more than ~$137 billion in cash and investments. Investors are pressuring Apple to return some of this cash through dividends or buybacks. read more »

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