Tags: Ross | Apple | stock | spring

Evercore ISI's Ross: Apple Stock Headed to $143

By    |   Monday, 13 April 2015 09:15 AM

Apple product users are excited about the company's new watch, and Apple investors appear to be excited about the company's stock.

It closed at $127.10 Friday and has returned about 15 percent so far this year, compared with 2.1 percent for the S&P 500 index.

"While the watch itself doesn't have a spring, I'm told, the chart of Apple is wound tight for a big move higher," Richard Ross, head of technical analysis for Evercore ISI, told CNBC.

A coil, or triangle, pattern has formed on the chart for Apple shares during the past few months, he explained. "I think this could unlock the door to that upside. You see this big move up into the recent pattern, but then volatility is contracting within this triangle."

Apple shares have returned 69.5 percent in the last year, compared with 14 percent for the S&P 500.

"The good book of technical analysis tells us that as Apple consolidates and you see a series of lower highs and higher lows, that's the spring being wound tight. And all that energy that is being stored is ultimately released higher," Ross said. "That brings Apple shares to $143."

Meanwhile, many analysts point to Apple's nearly $180 billion cash hoard as a major strength for the company. But that's not necessarily the case, some experts say.

Of course, plentiful cash is helpful. "A company having lots of cash is like a person having lots of savings," Thomas McConville, co-portfolio manager of the Becker Value Equity fund, which holds Apple stock, told Money magazine.

"If a person loses a job, savings help to weather the storm. Cash helps a company protect itself from shocks and keep investing in value-creating activities."

But the issue is how Apple puts its pile of cash to work. And McConville is concerned the rumored Apple car wouldn't fit into the company's sweet spot of elegant, simple, sophisticated consumer technology products.

"As an investor, I want to see that any product extension they announce fits under their umbrella," McConville says. "If they get into vehicles, creating onboard technology and displays is a good fit, since visual appeal and functionality are top concerns. But if they were going to try to design seat brackets? Well, that’s probably not the perfect fit."

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Apple product users are excited about the company's new watch, and Apple investors appear to be excited about the company's stock.
Ross, Apple, stock, spring
Monday, 13 April 2015 09:15 AM
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