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APPLE 2017 Still a growth stock?

Market Analysis

APPLE, Daily

There has been a lot written about the world’s largest company recently and everyone has a view about APPLE (a bit like Marmite*, you either love ‘em or hate ‘em). September is the month of the new product announcement and tomorrow its 2017’s turn and the much heralded (and awaited) iPhone 8 with its  OLED screen and $1,000+ price tag (apparently).

During the summer of 2016 the Apple share price triple bottomed and traded as low as $90.20 a share, following the disappointment of the iPhone 6s, Apple TV and iPad Pro which had all been launched the previous September. However, things  have turned around significantly from that low following the success of the iPhone 7 (along with Samsung’s woes last year) and 2017 has proved another boom year, so far for Apple investors.  Apple shares reached an all time high of $164.05 during August 2107.  August is always an interesting month for APPLE stock. In August 2013 it traded around $66 before the announcement in September of the iPhone 5 – it closed the year at $79 (a near 20% gain).  August 2014 the stock was trading around $95 before the announcement in September of the iPhone 6, Watch and Apple Pay – it closed the year at  $110 (a near 16% gain). 2015 and the iPhone 6s disappointed with the shares ending the year a dollar down at $105.00.  Last year we had the iPhone 7 launch and shares were trading at $114 on announcement day only to finish the year at also flat at $115.

There is of course more to Apple than the iPhone, but as it accounts for over  65% of revenue its success, or otherwise is closely aligned to the company’s fortunes. What APPLE do well is design, market and produce premium products that fit with their eco-system. In the medium term they are looking to disrupt not only TV (particularly in the US) but also cars, personal mobility and battery technology. So, even if this market corrects and turns into a Bear market and we do not see the share price appreciate in the final quarter, like it has in the last few years, the future still looks very promising. Do not forget the mountain of cash reserves they are sitting on. Calling APPLE a mature stock and no longer a growth stock seems strange, but that’s where we may be now.  

*https://en.wikipedia.org/wiki/Marmite

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Stuart Cowell

Senior Market Analyst

HotForex

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