Apple investors must be tired of winning.
This past week was another strong one for the Cupertino company’s stock: up 5%. That was despite the much less impressive performance of the broad stock market, which finished the week short of 2% higher. By my count, this was the 16th consecutive time that Apple stock ended the week flat at least (once), if not well into positive territory (as much as 13.6%, back in late March).
Apple’s peers did even better. Propelled by an unstoppable Amazon, FAAMG ex-Apple reached about two percentage points higher for the week. With high-beta stocks (think airlines, banks, etc.) ending the week in the red, it seems clear that investors have been favoring caution over speculative behavior lately.
Why Apple stock price increased
So what has fueled Apple’s momentum this week? In my view, investors’ willingness to “stick with what works” amid generally bad news on the COVID-19 front explains most of it. Apple has the strong brand identity, competent management team and rock-solid balance sheet to weather the headwinds in 2020.
But also, the company continued to get even more sell-side love. On Tuesday, Raymond James raised its price target on the stock, despite some concerns over fiscal fourth quarter guidance. Deustche Bank did the same, after citing “prospects of a V-shaped recovery in sales”. Nomura was the one shop to offer a contrarian view, stating that 5G will fall short of a supercycle for the Cupertino company.
Source: Stock Rover
The table below summarizes Apple’s stock returns over different periods, compared to the performance of its sector and the broad market. The story has not changed: Apple remains an outperformer relative to the S&P 500 and the industry across any time frame: from five days to five years.
The question, of course, is how high is too high. Alongside the 5G supercycle and maybe the strength of the services business during this pandemic, valuation is probably the key topic of discussion for Apple investors. Stay tuned, as I will be publishing an article on this subject Monday morning.
All the numbers, tables and graphs in this article have been provided by Stock Rover, my favorite source for data and insights on stocks, ETFs and markets. Check out the platform and sign up for as little as $7.99 per month. The very affordable Premium Plus plan that I currently have will give you access to all the information that went into my analysis, and much more.
(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)