July has reached its end, and Apple stock (AAPL) - Get Free Report climbed for the fourth time in the past five months: up 7% this time. Shares are now solidly in positive territory for the year, after rising an impressive 80%-plus in 2019 and again in 2020.
However, investors may be feeling a bit uneasy about a slow-to-react share price, following outstanding fiscal Q3 results. Could AAPL continue to move higher in August?
(Read more from the Apple Maven: Chat With Wedbush’s Dan Ives: How To Think Of Apple’s Valuation)
It was interesting to see how little Apple moved after delivering one of the best quarters in the company’s history. It seems increasingly obvious that the gains in this stock were front-loaded in June and July, to an extent. This could be a bit concerning for the performance of AAPL in August.
As the chart below suggests, the current month has historically been one of the best for the stock in the past ten years. This is consistent with the idea that investor sentiment improves 3-6 months ahead of the iPhone launch and holiday season. The harder question to answer, however, is whether the typical optimism in August may have already been priced into shares.
AAPL: thinking longer term
But as I have argued in the past, Apple is probably a better stock to own for the long term, not one to trade. The Cupertino company has managed to shine across all product and geographic segments, both during the pandemic and the early recovery stages. It is hard to build a convincing bear case against the stock that is based on business fundamentals alone.
The expectations for Apple’s revenues and earnings in 2021 have improved noticeably in the past few weeks, prior to and after fiscal Q3 earnings. What has not is the share price. Better results coupled with stagnant price means that valuations have pulled back. This is good news for those looking for an entry.
For this reason, I remain on the fence about Apple stock’s performance in August. But regardless of near-term performance, I continue to believe that now is a good time to own shares for the long haul.
(Read more from the Apple Maven: Apple Stock Is Cheap, Here Is Why)
Take your best guess: how do you believe Apple stock price will move in August?
Is the price right?
Looking at a company’s business fundamentals is only half the work needed to find a good stock. How much one pays to own the shares is a key factor in the success of any investment. This is why valuation analysis is so important.
Alpha Spread’s user-friendly platform allows you to estimate a stock’s fair value –through valuation multiples, discounted cash flow, and more. I believe that the service is a must for anyone looking to own the right stock at the right price. Check out alphaspread.com and get started with a 7-day free trial.
(Disclaimers: this is not investment advice. 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)