The Simple Tool to Boost AAPL Stock
Stocks don’t go up forever. Even some of the most successful stories take extended breaks. Take Apple Inc. (NASDAQ:AAPL) stock, for example.
AAPL stock is a Dow component that’s not expensively priced and basically trades with its own specific set of catalysts regarding sentiment.
Apple remains a great business, but not unlike many other brand-name, large-cap technology companies, the growth story changes as product proliferation scales.
Currency translation remains one of the top problems facing multinational corporations and investors. It’s becoming more of a problem as many countries are seeing their currencies fall significantly relative to the U.S. dollar. A big reason for this is the sagging price of oil.
The Greater China region remains a growth story for Apple, but the company’s domestic sales in the Americas fell about four percent in its most recent quarter and the Street sold the position on the news.
The near-term stock chart for AAPL stock is featured below:
Chart courtesy of www.StockCharts.com
What Tim Cook really needs to do is boost Apple stock’s dividend markedly higher. I really feel that institutional investors want to buy this stock, but they need a bigger reason to do so.
Apple stock is investment-grade. It’s still a medium- to long-term growth story. Accordingly, a three-percent dividend yield (instead of the approximately two percent, currently) would be a big deal for the “buy side” of the Street.
In many ways, this Dow component is similar to the market’s previous tech darlings (like Microsoft stock). Apple seems to have reached a plateau in its near-term growth prospects. Therefore, boosting its dividend and share repurchases in a significant manner would help make the position much more attractive for new buyers.
I think investment-grade investors should definitely have Apple stock on their radar right now.
The position is well off its recent high on the stock market, but equally important, Apple stock seemingly did deserve a major price consolidation after its recent run-up. A natural sell-off in the position (after recently hitting a new all-time record-high) was enhanced by the correction in the broader market.
What to Do with Apple Stock Now?
Very near-term, I see Apple shares trading with the broader market, which is still trying to digest conflicting economic data, oil prices, and fourth-quarter sales results hit by currency woes.
Apple’s growth story isn’t over. And this is why it’s a solid position to put on your radar now. If management were to signal a new, higher dividend-paying policy, I think this position would turn higher on a dime.
All businesses experience their own particular growth cycles. The global economy has been slowing the last few quarters.
The broader market is well aware that currency translation is going to be wreaking havoc with top-line sales growth among multinationals.
More dividends from Apple would go a long way to making the position much more attractive to new buyers.