General presentation of the Apple Company:
The Apple Company’s correct name is actually Apple Inc, originally Apple Computer Inc. It is a multinational business created in 1976 by two American associates, Steve Jobs and Steve Wozniak. The activity sector of Apple is the design and creation of technological products such as personal computers or computer software.
It is this company that created the famous Macintosh a few years ago, then, more recently, mobile terminals such as the iPod, the iPhone and the iPad. It also created the popular application, iTunes.
At the present time Apple employs over 60,000 people throughout the world and achieves a turnover of over 100 billion U.S. Dollars with over 360 Apple stores in a dozen or so major countries.
The major competitors of Apple:
The Apple Group faces numerous competitors spread throughout various product sales sectors. However, it maintains its position as market leader in a number of sectors such as mobile telephones and tablets with the famous iPad. It is nevertheless advantageous to know about its major competitors to be able to take their movements into account when completing your analyses.
In the smartphone sector, the major competitors are as follows:
In the computer sector, the brands that use the Windows system are the major competitors of the Apple Group. Predominantly among them is Microsoft that only uses Windows.
In the sector of connected audio devices Apple still holds 70% of the market but is however facing competition by certain large groups such as:
The major partners of Apple:
During its recent history, the Apple Group has been able to implement certain partnerships with companies quoted on the stock markets in order to develop its activity.
This is notably the case with Cisco as the Apple Group has collaborated with them in order to develop professional level solutions. The objective here is of course to develop the ios network at the heart of large companies by assisting them with the network knowledge and security of Cisco.
Apple has also collaborated with the new technology constructor IBM to create a partnership aimed at transforming the sector of mobile solutions for companies. As with Cisco, the aim of Apple here is to develop its presence in the professional sector as this is currently its major weak point. It should be remembered here that Apple is one of the current market leaders in the personal sector.
It may be possible that Apple shortly creates other partnerships with competitive or complementary companies.
Introduction and ranking of Apple’s shares:
It was in December 1980 that Apple was first listed in the stock market with almost 4.6 million shares sold at 22 dollars the unit. But Apple shares quickly gained value and ended with a 30% increase of its price by the end of its first day listed, at 29 dollars, which allowed the market of this company to reach the 1778 billions dollars.
This introduction in the stock market was the most important since that of the Ford company in 1956. Then came a second wave of stock sales of this company in 1981 with more than 2.6 million shares sold.
Even today, Apple shares are easily exchanged in the stock market and there are numerous investors investing on its sure value of the new technologies market.
Some advice for trading in Apple shares:
There is still time to invest in Apple Company shares as the turnover of this company continues to rise despite the increasingly fierce competition. For this you can opt for a long term investment by buying shares of this company through banking products such as a Stocks & Shares ISA or an Individual Savings Account (ISA). In this way you may also receive dividends that are calculated according to the company’s posted profits and the quantity of shares you hold.
However you may also choose to invest over smaller periods by speculating on the asset price movements over the short term on the stock market. This is made possible through the use of CFDs with the online brokers that enable you to speculate on the rise and fall in the price depending on the market fluctuations.
To anticipate the movements of the Apple company shares, you need to closely monitor the Nasdaq stock market on which these shares are quoted, as well as all information relating to the news and events of the company, its innovations and turnover.
Apple has become the leading company for stock market capital worldwide:
The stock market capital of the Apple Company hasn’t stopped growing since its first fund raising initiative. In August 2011, only a few months after the launch of the iPad2 by the brand, its stock market capital attained $341.5 billion. This capital amount even exceeded that of Exxon, the leading global petroleum company. A year later, the total Apple Company stock market capital was doubled. In August 2012 the American Apple Company beat the world stock market capital record with over 622.10 billion dollars.
Before this it was the Microsoft Company that held the record with a total stock market capital of $620.58 billion achieved in December 1999.
But this is not all! In fact, in November 2014 the stock market capital of Apple again increased and broke through the 700 billion dollar threshold, thereby increasing its record.
The historical growth of the Apple share price on the stock markets:
Since its IPO (Initial Public Offering) in April 2007 on the American stock market, Nasdaq Global Select, the price of Apple shares has experienced numerous movements that we will analyse here in detail.
A historic technical analysis of this asset’s price is particularly interesting as it shows above all a very strong capacity for growth. In fact, the Apple share price hasn’t stopped rising overall since its initial introduction onto the stock markets in 2007. At the beginning of 2017 the asset price was growing increasingly closer to the psychological threshold of $150. It should be remembered that on its introduction onto the stock markets the asset price was quoted at $12.89.
Of course, this overall increase has been achieved through steps, even though the underlying tendency over the last decade has clearly indicated a rising trend. In fact, we note an initial slight rising trend to $28.55 in December 2008 followed by a slight corrective fall to $11.67 in November 2008.
A longer and stronger rising trend then followed that achieved its peak of $100.10 in September 2011. But this psychological threshold resisted which led to a temporary fall to $55.78 in April 2013. Just after this corrective movement the asset price started rising again, reaching a new record of $132.54 in May 2015.
We then observe a new fall towards $92.72 in May 2016. Since this date the asset has again started to rise towards the resistance level of $150. The crossing of this threshold will no doubt lead to a sudden explosive rise in the price. In the case to the contrary it is expected that the price will again drop.
Historical analysis of the Apple share price:
One simply needs to look closely at the historical charts of the Apple share rates to understand the cause of the great interest in this asset. In fact, since 2005, the price of this share hasn’t ceased to increase, with a long and extremely volatile trend. It is actually quite rare to see such a sustained growth on the stock market.
If we study the charts closely we can see that this progression has been marked by numerous micro-movements, both rising and falling. The first rising peak can be observed in December 2007 at $28.55, which was immediately followed by a bearish correction to $17.80 in February 2008. A second peak of $26.96 was achieved in May of the same year, before a further decline in March 2009 to $12.19.
From this date up to September 2012, the accelerating rising trend achieved the $100.10 level. Just after this movement, a strong downwards correction caused a fall to $56.58 in July 2013. Since then, and even now, this share price has followed a strong and stable rising trend.
Economic history of the Apple Company and its different acquisitions:
All the large companies quoted on the stock markets have built their success on economic strategies aimed at acquiring other businesses in order to boost their profits. The Apple Company is no exception. This strategy enabled the company to increase the number of its users and remain innovative through the development of useful cutting edge new technologies.
Among the largest companies that have been absorbed by the Apple Company, we particularly note the following: NeXT, P.A.Semi, Siri and Beats Electronics.
But it was in August 2016 that the group achieved one of its most interesting acquisitions. It acquired the Turi Company for 200 million dollars. This Seattle based company was specialised in fact in artificial intelligence, more precisely a branch related to automatic learning, also called ‘machine learning’. This is achieved through a series of algorithms and tools that enable computers or software to learn through repeated use. This innovation has the objective of analysing the user’s behavioural patterns and using their profile to offer targeted advertising.
To conclude, in February 2017, the Apple Group also purchased the Israeli company, Real Face, which is specialised in facial recognition.
Our projections over the medium and long term for Apple shares:
According to the opinions of most technical analysis experts, the price of Apple shares shows every sign of increasing over the next few years. In fact, we note that historically, this company has managed to sustain a strong growth despite a few momentary regressive episodes.
On the other hand, the Apple Company is among the most innovative of the companies quoted on the stock markets and seems to have a radiant future ahead concerning the continuously growing appetite of consumers for the new technologies sector. It is therefore logical to expect new innovations in the coming years which will undoubtedly cause strong rising trends.
Trading in Apple shares using CFDs online:
CFDs are ideal online trading contracts for speculating on the Apple share price. With these contracts you can figuratively buy or sell Apple shares in real time on the stock markets and thereby make profits through the difference between the opening share price and the closing share price.
By using a leverage effect it is also possible for you to significantly increase your profits compared with what you may make through the buying and selling of shares with your own capital.
To conclude, CFDs offer great flexibility and a simplicity of use that is ideal for investors that are relatively inexperienced in stock market trading. The analytical tools are also supplied free of charge by the trading platforms.
What are the advantages and strengths of Apple shares as a stock market asset?
Do you want to know if it is worth taking a long position to buy Apple's share with CFDs? In this case, you first need to know the advantages and strengths of this value. This is what we propose to discover here with this summary of this American company’s strengths.
Of course, the first advantage of Apple is its position as a leader, especially in the markets of smartphone and tablets. However, there is a fierce battle going on with some major competitors like Samsung which should be closely monitored. We will come back to this when we discuss the weaknesses of this value.
Another great strength of Apple is its ability to generate significant larger margins. More specifically, Apple is one of the companies with the highest margin levels in the market thanks to a type of activity that is known to be very profitable and which has a significant control of its production costs. In a more general way, Apple stands out for its good financial health and counts with a very strong investment capacity, which is promising for its future and its ability to innovate even more in order to maintain its good position. From a historical point of view, Apple has always published results beyond expectations, which tends to strongly reassure investors.
We also note that Apple is supported by analysts who regularly review their rising estimates, which tend to increase buying positions and support rising fundamentals. These estimates relate to both the turnover of the company and its current operating income. But these upward revisions are also directly related to the shareholders since the forecasts of net earnings per share are also regularly raised thanks to the positive outlook on the evolution of the company's activities.
The strategy used by Apple is also very well thought out and strives to make the company competitive. This strategy includes an excellent integration of the different activities on the horizontal level as well as on the vertical.
Thanks to a well-thought-out marketing strategy, Apple has been offering the general public a wide range of successful products for many years. It is therefore likely that this is not just a momentary trend and that the company manages to maintain a high level of demand among consumers.
Finally, let’s remember that Apple has one of the most important growth rates in the world among the international industry, which is undoubtedly one of its major attractions for investors.
What are the disadvantages and weaknesses of Apple shares as a stock market asset?
Of course and as we quickly mentioned above, Apple shares does not only offer advantages for traders. Before determining which strategy, you will adopt on this title, it is essential to know the possible disadvantages of this value. So here are the main weaknesses of the company and its stock market title.
First, it is very important to understand that Apple titles is particularly popular among investors and is therefore a very speculative value. Its responsiveness to graphic configurations is thus very strong and short and medium term reversals are frequently observed, which calls for utmost caution. In particular, it is known that massive profit-taking is often observed as major levels of technical resistance are approached.
On the other hand, even though Apple’s range of products has been a great success among the public for many years, the group has a very strong dependence on its two flagship lines namely the IPhone and the IPad. This is due to a lack of a diversification strategy which could have a significant impact on its long-term results.
Apple also offers little price variation within its product lines. It targets only a specific segment of the market and cannot position itself on the mid-range and even less on the low end. The company is thus highly dependent on the purchasing power of its consumers and very exposed in case of economic crisis.
Finally, it should also be noted that Apple is increasingly weakened by significant competition. Of course, we already know the danger posed by its main competitor, Samsung, but now there is also competition from Asia such as the Korean brand Huawei which, in addition to offering technologically qualitative and innovative products, sells them at much more affordable prices.
Some tips to carry out a fundamental analysis of Apple shares:
To put all the odds on your side, you must be able to perform a complete fundamental analysis of apple’s shares. For that, you should consider the following points:
- The development of the group's offer to professionals.
- Its ability to diversify with more pronounced positioning on mid-range products.
- Its ability to position itself in certain emerging countries that are still difficult to access because of significant price competition.
- Apple could also be confronted to more and more public "scandals" targeting its financial methods and its very aggressive marketing strategy. Its announcement effects may indeed have a direct negative impact on the price of its stock title.
- Finally, and in a general way, Apple will have to overcome the pitfalls of its new competitors by readapting its strategy or innovating even more.
Of course, a good technical analysis is also necessary for your strategy to be successful