Apple's Health. The Health of Apple.

            Last week Apple announced their health apps.  From the looks of it, it will allow individuals to have more control over their own health.  By knowing certain key metrics like BMI, how many calories were burned in a run, and being able to constantly track this information, perhaps the burden of chronic conditions may go down.  Currently, 5% of the US population accounts for 50% of the healthcare expenditures.  This is mostly due to chronic conditions such as diabetes and heart disease, which are behavioral health issues.  Also, the current healthcare system is set up for diagnosis and treatment and not for prevention.  There is no money for prevention in the fee-for-service (FFS) reimbursement model.  Although reimbursement is gradually changing to a more capitated/global payment scheme, the importance of each person to be able to monitor his or her own health cannot be understated.   

            Today is June 8^th, 2014.  Apple splits 7 for 1 tomorrow.  Apple has almost doubled from some time ago when it traded around $360 a share.  The health of Apple seems to be more intact than ever.  iPhone 6 will be coming out sometime soon, the health apps will be a completely new source of revenue, and perhaps the phantom iTV is on its way.  Apple also just splurged $3 billion to buy Beats.  Personally, I think the Beats headphones are just average, however, from marketing standpoint, it’s a strong buy.  Apple has had a tough time figuring out the ear buds for the iPhone. Well that problem is now squashed.  Furthermore, the Beats hardware will show up in all Apple devices from the iPad speakers to the laptop speakers as well. 

            A few years ago Apple hit about $707 a share before getting naturally cut in half.  The stock was stagnant.  Negativity surrounding their growth was mounting. 

            However, their EPS was outstanding, the profit generated on a quarterly basis even if missing estimates was extremely strong, and they kept building up their free cash flow (FCF).  Set split tomorrow (6/9/2014), I think people have been dying to get some Apple stock.  I see the $1,000 a share target being hit on a split-adjusted basis.

$142.858 split adjusted would be approximately $1,000 a share pre split.

            Doesn’t $142 a share look much more attainable than $1,000 a share?  Why do you think they split it 7 for 1.  Psychology is strong when it comes to stock price barriers and thresholds.