Company / Analytics

Analytics, 17 May 2023

Apple stock as a Mother’s Day gift

In this simple case study, we look at buying Apple stock (AAPL: XNAS) as a gift for Mother’s Day in the US, and whether it would have been a sound investment between 2022-2023. We flesh out simply the capital and dividend return.

Furthermore, we look at the latest news events concerning AAPL: XNAS and undertake a technical analysis on the stock.

Unrealised Capital gain

In 2022, in the US, Mother’s Day was celebrated on Sunday May 8th, and Apple’s adjusted close on the 6th of May 2022 was USD 156.35. This year, Mother’s Day was last Sunday (14th May), and the adjusted close then was USD 172.57.

Thus, holding Apple stock between the aforementioned period would have resulted in an unrealised capital gain of 10.37%.

Dividend History

Based on the below table, a dividend yield of 0.78% would have resulted from this ‘gift’.

2023-05-17 15-38-13

Recent News Events

First Apple Store in Mumbai India

Apple has recently launched its inaugural retail outlet in Mumbai, India, under the name Apple BKC. Situated in the bustling city, this marks Apple’s entry into the Indian retail market. Additionally, the company has plans to inaugurate another store in the capital city of Delhi. This move signifies Apple’s expanding presence in India, a significant market for technology products and services.

According to analysts, the recent opening of Apple’s inaugural retail store in India has the potential to boost iPhone sales for the year. Additionally, Apple is actively exploring opportunities in India to diversify its supply chain and reduce its reliance on China. The company’s primary manufacturing partner, Foxconn Technology Group, is also reportedly contemplating a significant expansion into India, as reported by The Wall Street Journal.

Introduction of an innovative and unconventional headset

Apple is reportedly preparing to introduce a highly innovative and unconventional product in the near future. According to sources familiar with the matter, this new offering is a mixed-reality headset resembling a pair of ski goggles, accompanied by a battery pack.

This ground-breaking Apple headset aims to merge augmented reality and virtual reality technologies into a single device, known as mixed reality. Users, such as gamers, who wear the headset will have the ability to immerse themselves in virtual environments displayed on the goggles’ screen. However, they will also have the unique capability to simultaneously perceive the physical world surrounding them, thanks to outward-facing cameras integrated into the headset.

Better than expected fiscal results

Apple’s recent announcement of its fiscal second-quarter financial results has surpassed analysts’ expectations. The primary driver behind this positive outcome was the higher-than-anticipated sales of iPhones, which contributed to a revenue of $51.3 billion for the quarter. This figure represents a 1.5% growth compared to the same period last year. In contrast, Wall Street had projected iPhone sales of $48.7 billion for the quarter.

Furthermore, Apple revealed that its quarterly sales amounted to $94.80 billion, exceeding the analyst consensus estimate of $92.96 billion by 1.98 percent. However, it is important to note that these sales figures represent a 2.55 percent decrease compared to the sales of $97.28 billion generated in the same quarter last year.

Tim Cook, the CEO of Apple, expressed satisfaction with the company’s latest achievements despite the challenging economic conditions. He highlighted that Apple attained a new record in Services, as well as a March quarter record for iPhone sales. Additionally, Cook mentioned that the number of active devices within Apple’s ecosystem reached an all-time high, which signifies a growing user base. He emphasized Apple’s commitment to long-term investments and their dedication to environmental sustainability by striving to achieve carbon neutrality in product manufacturing and supply chains by 2030.

Apple’s resilience in emerging markets

During an interview, Apple’s Chief Financial Officer, Luca Maestri, acknowledged that the company faced challenges in consumer demand, leading to a decline in sales for Mac and iPad products. However, Maestri highlighted that the iPhone performed exceptionally well in developing markets. Despite the overall difficult environment, Apple experienced notable success with its flagship smartphone in these emerging regions.

Technical Analysis Weekly Chart

Based on the weekly timeframe of Apple, we observe a clear upward trend with higher highs and lower lows since the beginning of 2023. Moreover, the stock price has bounced off the simple moving average, which was used as the baseline, which typically indicators a strong upward trend.

2023-05-17 15-42-40

On the other hand, switching to the daily timeframe, it is observed that the price is relatively close to a supply zone:

2023-05-17 15-44-32

This is important because a supply zone conventionally also acts as a resistance zone for price to break through. Thus, an action point might be to sell one’s apple stock at the anticipation that the upward trend has reached its peak.

However, a break and retest of the zone at the peak of the supply zone at USD 179.61 would suggest an additional confluence for taking a bullish position on Apple. Conversely, the limitation of technical analysis is that we cannot predict the price movement of a stock with precision. Nonetheless, we may submit that due to the positive fundamental performance of Apple and the strong trend, a ‘Buy and Hold’ might be more appropriate.

Ending Note

Based on the positive capital and dividend gain, we can submit that buying apple as a Mother’s Day gift would have been a sound investment. Similarly, even if the stock did not perform as well as one anticipated, indulging one’s mother to the world of the stock markets can be quite a valuable gift.

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