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Trading Apple Stock
Global technology giant, Apple, Inc. formerly Apple Computers, was founded on the 1st of April 1976 by Steve Jobs and Steve Wozniak and became world famous for their personal computers.
Today, the company is headquartered in Cupertino, California, and specialises in the designing, manufacturing, marketing and selling of consumer electronics, computer software, and online services. Its flagship products come from their iOS range of devices including the iPhone, iPod touch and iPad.
Apple held its IPO on the 12th of December 1980 and had since risen to become the most valuable company in the world. Apple stock trades on the Nasdaq exchange under the Global Select Market category with the ticker symbol AAPL.
Apple has been renowned as one of the most innovative companies in the world and its dedicated research and development department helps it remain an industry leader, despite the competition. In recent years, Apple has made various acquisitions which points to the tech giant’s desire of expanding its product line in tandem with advancements in the industry.
Its most notable acquisitions have been companies such as Shazam, a music and image recognition company; Buddybuild, which is a feedback platform for development teams; Vrvana, an augmented reality company; PowerbyProxi, which develops wireless charging tools; and InVisage Technologies, a semiconductor firm producing quantum dot-based image sensors.
When Apple went public, its stock started at $22.00 per share. Since then, the company has had 4 share splits: 2-for-1 in June 1987; 2-for-1 in June 2000: 2-for-1 in February 2005; and finally, 7-for-1 in June 2014. When adjusted for the splits, the Apple IPO price was $0.39.
Currently, the Apple stock price is trading at approximately $220 per share, which if split-adjusted, is at an all-time high. Before the latest 7:1 split, Apple stock posted price highs that were just short of $700 per share. At the beginning of August 2018, Apple’s market capitalisation surpassed the $1 trillion mark, which makes it the world’s first trillion-dollar company.
Apple started paying out quarterly dividends in May 1987 but suspended payouts around November 1995, after the company hit a financial crisis. After a 17-year hiatus, Apple resumed quarterly dividend payouts in August 2012 when its cash reserves had reached $100 billion. In its latest payout in May 2018, it announced a 16% increase in dividend payouts to $0.73 per share, making it the biggest-paying dividend stock.
Apple stock remains a clear favourite for dividend investors who are interested in not only a significant dividend payout, but a history of consistent increases. Apple still holds cash reserves of about $145 billion and a free annual cash flow of approximately $54 billion, which means investors who value income, will have it first on their ‘wish list’.
How to Trade Apple Stock?
Apple’s stature in the world, interesting dynamics and exceptional value, have resulted in Apple stocks being one of the most traded in the world. Here are some factors investors should always consider when trading Apple shares:
- Tariffs and Trade agreements
Apple has a particularly great exposure to China, and the tariffs and trade agreements between the Asian nation and the US can have a significant impact on its stock price. China is responsible for about 20% of Apple’s revenues, while the Asian nation is also host to Apple’s major manufacturing partners. Any change in tariffs and trade agreements between the two nations, directly impacts Apple costs, revenues and gross margins.
- Competitor’s Performance
Operating in the dynamic technology industry means Apple faces tough competition from a pool of equally strong competitors. The technology industry is characterised by frequent product introductions and repeated feature improvements and design innovations. Apple’s biggest competitors are Samsung in consumer electronics hardware arena; PayPal for online payments; Amazon Prime in online streaming and entertainment as well as Google’s Android in the mobile sector.No company would want to have such a formidable line of competitors, but Apple’s sticky ecosystem has helped it hold its own. Still, investors should pay attention to how the competitors are performing in their respective sectors to determine if they are gaining ground and posing a threat.
- Periodical Earnings Reports
Apple’s fiscal year runs from October to September, and the company releases quarterly financial reports to update its shareholders on its business health. Due to Apple’s exceptional past performance and value, they are on somewhat of a pedestal and scrutinised by analysts.Investors should always track and analyse earnings and not just rely on market chatter. During reporting, Apple also announces any possible dividend payouts as well as the release of future growth estimates. All these factors should always be looked at in the short and medium term, rather than just in the long term. This is because the stock moves with sentiment and prices react swiftly to current market conditions.For instance, if Apple announces the release of a new generation of iPhones with improved features compared to the competition, its stock usually reacts positively and within a short time. On the flip side, for example, when component manufacturers are falling behind demand, or there are quality issues that impact Apple’s production, this affects their stock price too.
Why Trade Apple with AvaTrade Australia?
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- Low cost and direct access to global equity markets – Alongside Apple stock, there are numerous other cfd stocks trading available from all the major world exchanges. At AvaTrade, you get direct and instant access to the global markets.
- The AvaTrade trading platform suits both short and long term trading styles – This means investors can potentially profit from short term price moves, such as earnings releases, or potential long term moves that can be triggered by factors such as future project announcements.
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Apple Stocks Trading Main FAQs
- What should I know about Apple?
Apple is well known for its iconic Mac computers and iOS mobile operating system. With a market capitalization over $1.5 trillion (as of June 2020) it is the largest U.S. publically traded company. It is also well known as one of the five FAANG stocks that have been leading the technology rally in the 21st century. With an almost fanatical following, Apple has continued to grow its user base steadily, and as a result it also continues to grow its revenues and profits.
- Is Apple a good stock to trade?
As one of the largest U.S. corporations Apple shares have some of the best liquidity and have always been a popular stock for traders of all types. The stock maintains is attraction for short term traders, swing traders, and long-term investors. By using CFDs traders make it easy to go both long and short Apple shares, increasing the tradeability of the stock dramatically. Plus, the popularity of the stock means there will always be plenty of research and opinions to help you make your own trading decisions.
- What is the best strategy for trading Apple?
The best strategy for trading any stock is going to be the one that suits the trader’s personality. You also need to take into account where the stock is regarding its price action. A trending stock needs a different strategy than a stock that’s consolidating, for example. One way around all that is to use the two day up/down strategy. Basically you go long if the price goes above the high of the past two sessions, and go short if the price drops below the low of the past two sessions. It’s an easy strategy that can even be used with other stocks.
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