When Apple Inc announced a 7-to-1 stock split in April, investors knew it will bring the company's price per share down. After Apple's stock price dropped 85 per cent after the split, the stock has become a more attractive investment.
Before Apple made the announcement, shares fell 6.5 per cent compared to the previous year. After April 23, the stock has rallied to and even surpassed the $600 mark, which is a price not seen since 2012.
According to Forbes, part of the reason why Apple shares continue to rally is the stock split since potential investors are more attracted to buy with a less than $100 price per share. It also opened up an opportunity for smaller investors to buy Apple shares at a lower price.
After the stock split, Apple has the chance to be added to the Dow Jones Industrial Average which was previously impossible because of the company's pre-stock split price of more than $600.
Analysts agree that Apple has many going on in its favour, including an increase in share buybacks and dividends. Software developers around the world seem to love the new tools the company has unveiled in the recently concluded Worldwide Developer's Conference (WWDC) despite the lack of new hardware announcements.
Apple has also acquired Beats Electronics for $3 billion and gained the expertise of founders Jimmy Iovine and Dr Dre to the company.
Since the stock split was announced, Apple stock soared to more than 23 per cent. The stock split would have reduced the stock price to $75, but the stock was sold for about $92 per share. Forbes said Apple investors should wait for the price to be $100. Reports said Apple had reached its stock price peak in September 2012.
Apple's biggest growth driver may rely on the next generation iPhone, the iPhone 6 with its rumoured big screen, to finally go head to head with popular Android phones. The company is expected to release a 4.7-inch and a 5.5-inch version of the next iPhone in September.