5 Reasons Apple (Nasdaq: AAPL) Stock Hit a New All-Time High

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Just when it looked like the Apple Inc. (Nasdaq: AAPL) success story had taken a detour, Apple stock suddenly hits a new all-time high.

AAPL shot past its previous intraday high record of $644 by reaching $648.19 during Friday's session. The close of $648.11 easily broke the $636.23 record closing price set on April 9.

Today (Monday) Apple stock is up more than 1% in early trading, reaching an intraday high of $656.35.

That's hardly what many investors expected after Apple reported on July 24 that it missed on its June quarter earnings and offered weak guidance for the current quarter.

After that Apple stock dipped into the $570 range several times before quietly starting its climb back to its previous high.

Since those lows of late July, AAPL has soared 12% -- more than twice the rise of the Standard & Poor's 500 index and almost triple the performance of the Dow Jones Industrial Average.

How can this be? Why are investors so high on a company that hasn't really done anything spectacular lately?

Dividends and iPhones and Apple TV - Oh My!

Here are the five most likely reasons why Apple stock hit a new all-time high today:

  • The iPhone 5: With the expected September launch of the next version of the iPhone drawing ever-nearer, investors can almost taste the profits. The iPhone is Apple's most profitable product - it contributes more than half of the company's bottom line - and sales of the iPhone 5 are expected to exceed all previous records. When the iPhone 4s was introduced last year, Apple had a huge blowout quarter.
  • An Apple Dividend: Although announced in March, the revived Apple dividend is a game-changer for Apple stock. For one thing, it makes AAPL more attractive to retail investors looking for income, even with a smallish yield of 1.7%. But the $2.65 quarterly dividend, which was first paid out on Thursday to investors of record as of Aug. 13, is even more important to another, larger group of investors - managers of income funds. Rules governing many types of income funds (such as pensions) naturally require investments provide income. Adding a dividend made it possible for a whole new set of investors to buy Apple stock.
  • Apple TV: While a full-fledged television set may not be in the cards, at least in the short-term, a steady stream of news reports has shown Apple is very much interested in making more out of its Apple TV "hobby." Sales of the small set-top box this fiscal year - about 4 million -- are already twice what they were in all of 2011. Reports in recent weeks have hinted at an upgrade to Apple TV that would seamlessly link live TV broadcasts and Internet video services in one easy-to-use interface. And The Wall Street Journal reported just this week that Apple has been pitching Apple TV to the major cable operators like Time Warner Cable Inc. (NYSE: TWC). Deals with one or more big cable operators would make Apple TV a much bigger profit center.
  • Buying Opportunity: After hitting that $644 intraday high, Apple stock sank as low as $530 in May. But Apple' fundamentals never changed. It still had over $100 billion in cash with no debt. Its P/E stayed in the mid-teens. It has a massive cash flow. Many investors no doubt saw AAPL below $600 not as a red flag but as a second chance to snap up the stock at a relative bargain before it resumed its upward climb.
  • Flight to Safety: As crazy as it sounds, AAPL is a safer bet with a more promising rate of return than most other investments these days. Those solid fundamentals listed above are a relative rarity, as is Apple's ability to expand into - and dominate - new markets. It's no accident that Apple shows up in so many fund managers' portfolios.
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