Apple Stock This Week: Going Parabolic (Video)
When some may have thought that a quick break to catch its breath would be in order, Apple’s stock ripped higher.
In the week that preceded the 4-to-1 split (shareholders of record as of August 24 will receive four shares of Apple for each one that they own now), the stock climbed a whopping 8.3%. This is on top of last week’s 3.4%, which was achieved despite bearish news regarding the Epic Games battle and weak July sales of smartphones in China.
Year-to-date, Apple has been up about 70%. Until late July, the stock had kept up with the rest of the FAAMG group, which had gained about 35% year-to-date up to that point. But following Apple’s fiscal third quarter earnings day, shares of the Cupertino company departed from the peer group and went parabolic.
For the year, Apple has also outperformed the information technology (ticker $VGT) and consumer discretionary (ticker $VCR) sectors by at least 40 percentage points.
Source: Stock Rover
Here are some of the key factors helping to lift the stock this past week:
- Apple’s stock split will apply to shareholders of record as of August 24. These have been the last few days that investors could get shares before the 4-to-1 event. I explained why stock splits do not add much value to the company’s equity, if at all, but that improved sentiment could be pushing the share price higher.
- Apple announced a joint venture-type arrangement with ViacomCBS. The deal involves offering a CBS-Showtime streaming bundle to Apple TV+ users for an extra $9.99 per month. Apple TV+ has not been a success story so far, given stiff competition for streaming video. However, the partnership could move the needle and help support new Apple TV+ subscriptions.
- Last weekend, Warren Buffett’s Berkshire Hathaway disclosed its stock holdings as of June 30. As the company acquired even more shares of Apple recently, its portfolio is now nearly 50% allocated to the Cupertino company’s stock. Talk about serious endorsement by a closely followed (not to say legendary) investor.
Apple’s week could have been even better, if not for:
- The backlash over Apple’s App Store policies picked up steam. After the maker of Fortnite sued the Cupertino company , other companies piled in. Most recently, news publishers that include The New York Times and The Wall Street Journal asked CEO Tim Cook for “better terms on sharing revenue on subscriptions sold through the App Store”.
Below is a chart that compares the performance of Apple stock against the S&P 500 and the industry. Apple’s dashboard continues to look very robust, from a momentum perspective. The greener it is, however, the more value investors fear about overvaluation. Shares continue to trade at a historically high “premium” to 50-day and 150-day moving averages.
Source: Stock Rover
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The data used in this report was provided by Stock Rover. I have been impressed with the breadth and depth of information on markets, stocks and ETFs that this platform provides. Stock Rover also helps to set up detailed filters, track custom portfolios and measure their performance relative to a number of benchmarks.
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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)