As we endure the COVID-19 pandemic, investors looking for stay-at-home plays are looking at Apple.
The Nasdaq composite started out well this morning, rising as much as 2.8% in the early going, but stocks across the board retreated on news that New York is following California’s lead in ordering most residents to stay at home in an attempt to slow the acceleration in confirmed COVID-19 cases nationwide.
Apple, a stay-at-home play thanks to its dominance in digital music and its innovations in the consumer electronics and streaming video space, is still 24% below its all-time peak. But the megacap tech is trying to build institutional support at the critical 200-day moving average…
Apple scored big gains — 48%, in fact — when it staged a picture-perfect breakout past 221.47 in a flat base on Sept. 11.
Volume on that breakout day rushed nearly 70% higher than the stock’s 50-day moving average in turnover.
The solid gain on Sept. 11 in heavy turnover bespoke huge buying by mutual funds, hedge funds, insurers, pensions and the like.
MacDailyNews Take: Apple shares are currently trading at $246.70. One year ago today, Apple shares closed at $185.73 (adjusted close price adjusted for both dividends and splits).
There looks to be plenty of tech stocks that are recovering faster than Apple is. This is nothing new. I’m grateful that Apple is still a trillion-dollar company as the naysayers lower Apple’s price targets in bunches. I suppose it’s because Apple is far too exposed to China while other tech companies didn’t have such a beautiful but dangerous love affair with China. Apple had to go all in and it’s just unfortunate China and Apple both got bit by the Coronavirus.
I have full confidence Apple’s value will be recovered over time yet slower than every other major tech company because production and sales are quite China-based. I don’t care as long as Apple continues to raise dividends. I’m a patient man. Sure, I don’t particularly like to see Microsoft being worth more than Apple, but Microsoft made all the right moves with a cloud business and Apple didn’t, so I suppose the smarter company should be at the top. Second place is also good to me although Wall Street may consider Apple an also-ran company. Anyway, the year still has a long way to go, so I’m not giving up on Apple by a long-shot.
What is the “Apple value” you expect to be “recovered?”
APPL was below $195 in August 2019. A month later the Fed injected the market with “emergency $$” (repo markets) that always has a positive effect on equities. Coincidentally, AAPL rose from that point onward to record highs in Feb ‘20…then, the V hit. The V was the pin that poked the bubble, but there were underlying weaknesses in the market as a whole and APPL specific curiosities. One HUGE curiosity was that AAPL’s rise had no material link to earnings, so, it begs the question; what price are we to determine as real, or based on the true value? As painful as it is to consider, because I’m one foolishly long AAPL, maybe <$200 is true to value?
Apple should quadruple the next two dividends so we can inject some more money into the economy / market.
Whether “quadrupled” (seems high to me), or not, a divi increase as a result of halting stock buybacks would be both responsible and expected.
Buybacks need to stop. This belief has nothing to do with wanting a bigger divi, but because they can disguise a company’s health/earnings and b/c they disproportionately favor company execs.