Capital Advisors: 'Competition' Is The Biggest Risk To Apple And Its Stock Today, Don't See Apple Watch As A 'Game Changer'

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Apple Inc. AAPL has been a top pick for most of the analysts and experts on Street for quite some time now with most having a Buy or Overweight rating on the stock. However, according to Channing Smith, Capital Advisors managing director, even though the stock has potential to go up further, it is ‘prudent’ to reduce some exposure here.


Smith was on CNBC recently to discuss his outlook on Apple’s stock, the biggest risk that the company faces and why Apple Watch won’t be a game changer.


Still Positive


“We still have a very large weighting on Apple,” Smith began. “It’s one of our top positions and we were over 5 percent and we thought it was just prudent to pull that back, but we are still very positive on Apple.”


Biggest Risk: Competition


Smith was asked about the biggest risk to Apple and its stock today. He replied, “Well, I think competition, if you look at Samsung, if you look at Google, they are right on trail of them. Apple Pay, not unique very much anymore, we think that you have to have that service. We think that if you look at the radio, we think, that’ll be somewhat of a competitive advantage, but really it’s a competition and there is not a lot of differentiation when it comes to smartphones anymore.”


Apple Watch: Not A Game Changer


On why he thinks Apple Watch is not going to be a game changer, Smith said, “We really don’t. If you look at lot of the estimates, a lot of analysts have 10 percent penetration rate, we just don’t see that. We are excited today to see that you are going to see native apps available on iWatch hopefully, but we just don’t really see that being a game changer. We expect maybe one out of 20 to use that to use that functionality. So, we don’t see [it as] penetrating and really being a big revenue driver going forward.”

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Posted In: CNBCMedia
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