Apple (NASDAQ: AAPL) broke records on January 27th after the company posted an $18 billion profit made in its fourth quarter of 2014. The main driver of Apple’s income was cash made from iPhone 6 sales, with 74.47 million iPhone units sold in the fourth quarter.
In addition, just last week the tech giant sold $6.5 billion worth of bonds. With that said, Apple is now considering an offer of bonds denominated in Swiss francs. The reason for this is that Swiss government yields are on track to stay negative until 2027. With Apple’s strong brand and high credit ratings, this would make an attractive proposition for yield investors who have Swiss currency, with very inexpensive funding.
This is the third year that Apple plans to raise money through bonds in order to fund its capital-return program, which includes both dividends and share buybacks.
On February 9th, Canaccord Genuity analyst Michael Walkley weighed in on Apple, maintaining a Buy rating on the stock and raising his price target from $135 to $145. Walkley’s price target increase stems from the strong iPhone sales Apple had during its fourth quarter of 2014. He stated, “We believe Apple’s strong December quarter results and guidance are consistent with our surveys and analysis indicating a strong iPhone 6 upgrade cycle should continue through C’15 driven by two primary reasons.” These reasons include “First, given our estimate only 15% of the iPhone installed base has upgraded to the iPhone 6 devices, we anticipate continued very strong replacement sales to existing iPhone consumers. Second, we anticipate further high-end smartphone market share gains for the larger screen iPhone 6 devices as our surveys indicate a greater mix of Android smartphone consumers are switching to the iPhone 6 smartphones than in the iPhone 5 series launches.” Walkley concluded, “We believe these trends should grow Apple’s iPhone installed base and bodes well for future strong iPhone replacement sales, earnings, and cash flow generation.”
Michael Walkley has rated Apple 72 times since 2010, earning a 77% success rate recommending the stock and a +29.0% average return per recommendation.
In fact, Walkley has a lot of experience recommending stocks in the technology sector, such as Skyworks Solutions (NASDAQ: SWKS) and Blackberry (NASDAQ: BBRY), helping him earn an overall success rate of 70% recommending stocks and a +23.6% average return per recommendation. The analyst has rated Skyworks 13 times since March 2013, earning a 100% success rate recommending the company and a +76.2% average return per recommendation. Likewise, Walkley has rated Blackberry 36 times since May 2009 with an 89% success rate recommending the stock and a +23.9% average return per recommendation.
However, Walkley has not always been so accurate with his recommendations, having rated Calamp (NASDAQ: CAMP) 7 times since October 2013 with only a 29% success rate recommending the company and a -13.2% average loss per recommendation.
There is no question that Apple is the biggest technology company in the world, and Michael Walkley is confident the company will be able to keep up the momentum. Do you trust his latest recommendation based on his financial advice history?