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Apple is renowned for its strong stock performance and profit postings, but over the past 18 months it too has been buffeted by weaker-than-predicted growth and revenue challenges in certain markets.
However, it appears the tide may be turning. Most recently, the company posted its first financial results of 2024 and it was better than expected with revenue at $119.58 billion, compared to market expectations of $117.91 billion for the December quarter. Earnings per share were $2.18 (vs. $2.10 expected) and sales growth was up 2%.
“Today Apple is reporting revenue growth for the December quarter fuelled by iPhone sales and an all-time revenue record in Services,” said Tim Cook, Apple’s CEO, in a press release.
“We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments. And as customers begin to experience the incredible Apple Vision Pro tomorrow, we are committed as ever to the pursuit of groundbreaking innovation—in line with our values and on behalf of our customers.”
iPhone and Mac revenue were higher than expected at $69.70 billion and $7.78 billion respectively, but iPad sales were $7.02 billion for the quarter—down from an expected $7.33 billion. Sales growth in Greater China, Apple’s third largest market, fell nearly 13% from the same time last year, as the country grapples with weakening consumer demand.
The most recent results came after Apple posted its fourth quarter revenue loss for September late last year, recording a 1% decrease from the previous quarter to come in at $89.5 billion in revenue. This was slightly higher than analyst predictions at $89.28 billion.
In the company’s June update, it was a similarly mixed bag. While the company posted quarterly revenue of $US81.8 billion, down 1% annually, it was the record sales in services—driven by one billion paid in subscriptions—that defied estimates. Nevertheless, Apple still posted some lukewarm figures: with revenue from iPhone, Mac, and iPad sales all lower than a year ago.
The good news is that Apple shares have tracked solidly over the long term and tend to fare better than tech peers. As of March 4, 2024, they are worth $US175.10.
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Here’s what you need to know about buying and selling Apple shares in Australia.
Why Own Stocks?
It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares or more defensive companies with a reliable dividend stream.
Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.
That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.
How to Buy Stock
Once you’ve decided which company to invest in, there are several steps to buying shares.
1) Open an account
Whether you’re a seasoned share trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in Apple.
Stockbroking is a competitive market place and services for DIY investors come in a range of guises— from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.
Before opening an account, bear in mind the following:
- Keep your ultimate financial goals in mind
- Be prepared to ride out stock market ups and downs
- Aim to keep trading costs to a minimum
- Remember that share investing can prompt tax charges, for example, when selling part of your portfolio, unless you use a tax-efficient wrapper such as an ISA
And before buying any shares, it’s worth asking yourself these questions:
- Should I take financial advice?
- Am I comfortable with the level of risk in question?
- What’s my investing budget?
- Can I afford to lose money?
- Do I understand the company in which I’m looking to invest?
- Am I protected if my platform provider/adviser goes out of business?
2) Where is Apple traded?
The ticker symbol for Apple Inc is AAPL. It is listed on the technology-focused Nasdaq exchange in the US, which is open for trading from 9.30am to 4pm (US Eastern Time).
You should be able to buy US shares through most brokerage accounts, but watch for foreign exchange fees.
You will be asked to complete a US W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk. If the Australian dollar strengthens against the US dollar, your shares will be worth less in dollars (and vice versa).
3) Do your research
To find out more about Apple, visit the company’s online investor relations page.
It’s also worth comparing Apple’s valuation to other comparable US technology companies. One way of doing this is to look at the relative price-earnings ratios: shares trading on a high price-earnings ratio have high expectations of substantial future growth.
Another useful research tool is brokers’ 12-month share price forecasts, which are available on financial websites. There are currently nearly 40 brokers following Apple shares, and their price forecasts give an indication of the upside and downside potential of the Apple share price over the next year.
4) What’s your investing strategy?
People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.
The latter method is often referred to as a means of ‘dollar cost averaging’, a stock market hack which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it means an investor’s money can be put to use in the market straightaway. However, drip-feeding your investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.
5) Place an order
Once you’re ready to buy shares in Apple, log in to your investing account or trading app. Type in Apple’s ticker symbol (AAPL) and the number of shares you want to buy or the amount of money you’re prepared to invest.
Many brokerages also allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses if the share price falls. For example, if you buy shares at $10, and set a stop loss of $9, your shares would be sold if the share price falls below $9, limiting your potential loss to 10%.
6) Review Apple’s performance
Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required—to maintain the status quo, buy more stock, or sell existing shares.
How to Sell Stock
At some point, you will want to sell your holdings. To do so, log in to your investing platform, type in the ticker symbol (AAPL) and select the number of shares you want to sell.
Note that if you’ve made a substantial profit, you may be liable to pay Capital Gains Tax (CGT) when you come to sell your holdings.
If you have owned the sharers for less than 12 months, you will have to pay 100% of the value of your capital gain at your applicable income tax rate—talk to your accountant about this.
However, if you have owned the shares for longer than 12 months, you will likely only need to pay 50% of the capital gain under Australia’s CGT discount rules.
Note: When investing, it’s possible to lose some, and very occasionally all, of your money. Past performance is no prediction of future performance and this article is not intended as a recommendation of any particular asset class, investment strategy or product.
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Frequently Asked Questions (FAQs)
How can I invest in Apple via a fund?
Investing directly in individual companies can leave you vulnerable to stock market volatility and unforeseen swings in share prices. That’s why financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of fifty different company shares. Being a major component of the Nasdaq index, Apple is found in many global and specialist technology funds and investment trusts, as well as tracker-style Exchange Traded Funds or ETFs.
Has Apple done a stock split?
Yes, numerous times. Apple has split its stock in 1987, 2000, 2005, 2014 and, most recently in 2020. These stock splits have had no impact on the share price, which performs well over the long term. There is no immediate plans for another stock split.
Should I buy Apple stock?
That depends on your investment goals, the make-up of your portfolio and your risk appetite. Before you buy, research the views of leading stock analysts who issue guidance on shares so you can make up your own mind.
Does Apple shares pay dividends?
Yes, Apple pays dividends on a quarterly basis. For example, in the Q1 report for 2023, a cash dividend of $0.23 per share was payable to shareholders of record. For its fiscal third quarter results, released in August of 2023, Apple declared a slightly higher cash dividend of $0.24 per share, which was paid on August 17 to shareholders. In its most recent results, Apple announced a cash dividend of $0.24 per share of the company’s common stock, which was payable on February 15, 2024.
