“Apple seems headed for a second-half sales bonanza,” Jack Hough reports for Barron’s. “Its forthcoming iPhone 6, expected in late summer or fall, will no doubt feature a handful of new gee-whiz capabilities. But its biggest selling point is likely to fix an Apple shortcoming. The current iPhone is popular, but its four-inch display can cause feelings of inadequacy when viewed next to a five-incher from Samsung Electronics. The iPhone 6 is sure to come in a bigger size, whether it’s 4.7 or 5.5 inches, or somewhere between the two. It will give the iPhone faithful their biggest reason to upgrade in years—and perhaps even lure back some defectors.”
“That’s good news for shareholders. One recent analysis suggests the new iPhone launch could add 10%-15% of earnings upside later this year,” Hough reports. “That should rekindle interest in Apple shares (ticker: AAPL), which now trade at a deep discount to the market. Look for a gain of 20% over the next year, not counting dividends.”
Hough reports, “The company holds $159 billion in cash and investments, equal to a third of its stock market value. Subtract that, and shares go for just eight times earnings. It’s unclear what Apple has planned for all that money. ‘I think there’s a good chance of a special payout,’ says Barbara Marcin, who manages the Gabelli Dividend Growth fund. On March 4, Apple announced the coming retirement of its chief financial officer and the appointment of a new one, Luca Maestri, who has a reputation for shareholder friendliness, according to Cantor Fitzgerald analyst Brian White. ‘We would not be surprised if a larger buyback and higher cash dividend are announced around the company’s… earnings report in April,” he wrote in a March 5 note to investors.'”
