Thursday, May 15, 2014

Buy Apple As It Gets Serious About Inorganic Growth

This article was originally published by  Seeking Alpha on May 9, 2014

By Sarfaraz A. Khan. Research Asst.: Gohar Yousuf. 


Apple is gearing up for one of its biggest acquisitions ever as it targets inorganic growth.

This comes after the company conducted a major bond sale, which will be used to fund its growth and buyback expenditure.

Analysts are eying double-digit top and bottom line growth.

Just a few weeks ago, Apple's (AAPL) chief Tim Cook said that the company made 24 acquisitions in the last 18 months and was actively looking for more opportunities. That opportunity might just have arrived. According to a recent report by Financial Times, the company could acquire a premium phone and music accessories maker for $3.2 billion.

This deal comes after the company announced its $17 billion bond sale. Through the additional funds, the company can easily continue with its buyback program as well as invest in its inorganic growth.

As for its flagship product iPhone which drives its organic growth, the business has reported strong growth numbers in the emerging markets, particularly the BRIC nations. In China, the company's three key products are gaining market share.

Major Acquisition
Apple is reportedly trying to acquire the headphone maker Beats Electronic in a $3.2 billion deal, which could be announced as early as next week. The deal could significantly enhance Apple's footprint in the music accessories market and would support its online music business.

Beats is the biggest player in the premium headphone market. The tech giant, could be, however, overpaying as last year, Beats was valued at $1 billion. The headphone maker also … read full article at Seeking Alpha