Apple Loses Weight - Analyst Blog
06 4월 2011 - 7:30PM
Zacks
Apple Inc(AAPL)
was attributed a lower weight in the tech-heavy Nasdaq 100 due to
the rebalancing of the index by the Nasdaq OMX Group that is
responsible for maintaining the Nasdaq index, effective May 2,
2011.
Apple currently represents about
20.49% of the total index weight and post rebalancing, Apple will
carry a weight of approximately 12.33%. This significant reduction
is on account of the Nasdaq OMX Group’s realignment policy, which
is based on respective market capitalizations of companies.
The idea behind the realignment was
to reduce the volatility of the index, which was increasingly being
influenced by Apple. Since the previous realignment in 1998, Apple
as a company has grown manifold and shares of Apple have
appreciated a staggering 3,779%, representing a market
capitalization of $332 billion. In 1998, market capitalization was
just $2.1 billion, according to Bloomberg data.
The companies that saw their
weights increasing as a result of the rebalancing include
bellwethers like Microsoft Corp (MSFT),
Oracle Inc. (ORCL), Cisco Systems
(CSCO), Intel Corp (INTC) and Dell
Inc. (DELL).
In our view, Apple still remains
the favorite stock in the technology sector despite losing weight
simply because of its growth trajectory and the timeliness of
innovative product launches, which have made it a wealth creator
for its investors.
We believe Apple will outperform
its peers on the back of its innovative products, including the
recently launched iPad 2. Though Apple has some supply related
constraints due to the recent Japan quake and is entangled in a
couple of lawsuits, we believe that these factors would not
materially impact the reputation the company has built over the
last decade.
The reduction of weight in the
index might have a short-term negative effect on Apple share prices
(down a couple of dollars since the announcement).
Thus we have a Zacks #3 Rank for
Apple, which translates into a Hold rating in the short term.
APPLE INC (AAPL): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
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