What Will Make Apple's Shares Reach $155? NationsShares CIO Has The Answers

Ever since Apple Inc. AAPL came out with its fourth-quarter earnings, the company’s shares are on a roll, making lifetime highs.

Scott Nations, chief investment officer and president at NationsShares, was on CNBC to discuss his outlook for the stock and how investors who missed the bus earlier can get into the stock.

Target: $155

In discussing the target price for Apple, Nations said, “Actually, my target is $155 based on not only accommodation of free cash-flow, but also the fact that we now expect even more buybacks.”

Nations continued, “We expect the company to return more money to shareholders and largely that’s going to be a functional effect. If the company can essentially borrow money for free by issuing Swiss bonds, and they are going to do so to return money to shareholders.

Why is Apple Issuing Swiss Bonds?

“You might ask why a company that has about $175 billion in the balance sheet needs to borrow money so they can return it to shareholders.

He explained, “Unfortunately, about 85 percent of their cash is sequestered offshore – that is offshore from the United States.

“So, they are not able to return it without paying a big tax penalty. Their solution is to borrow money in Switzerland, where they can do it [at] very low rates. That’s how they are going to return money. That combination of buybacks and cash flow, we see the shares at $155.”

Related Link: Why Merger Is Not A Solution For The Growing Apple/Tesla Rivalry

Will Apple Shares Retreat, Providing An Entrance?

Nations responded to the question by stating, “If you look at the chart, you really have to be brave to step up and buy some shares. But what it takes is not bravery, it just takes a little bit of a different trading strategy.

“So, if you might want to have a position of 500 shares in the stock, if you are an individual investor, instead of waiting for price you would be willing to buy 500 shares at, buy 100 shares today,” Nations replied.