Apple stock has seen a massive swing in the last four quarters. In the quarter ending June 2018, the price increased from $166 to $187. In the next quarter, there was a further increase in price to $227. Cumulatively, these two quarters showed a price jump of 37%.
One of the key reasons behind this movement could be the amount dedicated to cash buybacks in these quarters… Investors should consider the impact of buybacks on short-term price movement to find an ideal entry point.
In the past few weeks, Apple stock dipped to less than $175. If the trade war between the U.S. and China escalates further, Apple would face significant headwinds… Despite this threat, Apple stock has surged in the last few days to over $185. Again, one of the main reasons could be a higher buyback pace… Besides trade tensions, Apple stock is significantly dependent on the pace of buybacks in the near term. Investors should closely follow future buyback announcement to find an ideal entry point in Apple stock.
MacDailyNews Take: The sheer size of Apple’s buyback program makes it difficult for some (most?) to get their heads around. Apple buybacks, or lack thereof, can massively impact the company’s share price. When they laid off the buybacks after warning for the holiday quarter, the shares dipped precipitously. When Apple resumed buybacks, the shares recovered nicely.