I Know First system positive AAPL forecast: published on July 29 (before market opening) based on
"I Know First" stock algorithm.
Apple Stock actual performance: up 5.8% Gain In 1 Week
Another step that appears necessary before Apple could join the DJIA is for it to split its $600-plus stock in a way that would appropriately size it for the index. Being in an index usually means keeping share prices reasonably low, and splitting them when they get too high. Just a few years back, when Berkshire Hathaway (BRK.B) was included in the S&P 500, it followed the company splitting its B-shares 50 to 1. In Apple's case, it appears a split of between 5 and 15 to 1 may be proper for its initial entry into the index.
A teetering Knight Capital Group announced a $400 million deal on Monday with a group of investors that keeps the company in business, but comes at a huge cost to investors.
Knight once accounted for 20 percent of the market-making activity in shares of Apple, by midday Friday it was the market maker for just 2 percent of the share volume, according to data from Thomson Reuters Autex.
Apple's last 10-Q doesn't suggest increase in R&D. The company stated the following: "To remain competitive, the Company believes that continual investment in research and development and marketing and advertising is critical to the development and sale of innovative products and technologies."
Google and Apple are both trading at paltry P/E multiples considering their growth rates, operating margins, and balance sheets. Based on Bank of America's recent S&P 500 earnings estimate for 2013, the S&P 500 is currently trading at 12.76 times next year's earnings.
Apple price target to $950 per share. This price target represents an expected share price appreciation of 52.8% from Apple's closing price of $621.70 on August 10th, 2012. I expect share price appreciation, on average, to trail behind the rate of earnings per share growth over the next 12 months as Apple's massive market cap influences the share price performance and as the company's price-earnings multiple continues to contract.
The current macro trade hinges on the move of central bank stimulation. Markets have become exuberant at the thought of accommodative monetary policy that should support risk assets. The current economic factors that have sustained this belief come in the area of weak inflation data, followed by weak inflation expectations. With Germany also showing weakness in recent economic releases, there could be more proof that a catalyst is in order.
J.P. Morgan Asset Management recommendation on ”high-beta” stocks is in a good agreement with: "I Know First algorithmic system" , I am using with good results so far.