This week's Apple trading strategies (6/7-6/11)

A place for Apple traders and investors to share their best ideas — WWDC 21 edition.

To get things rolling, here's Boston Private's Shannon Saccocia on CNBC Saturday arguing that money invested in Apple is not, as Gilman Hilll's Jenny Harrington apparently put it, "dead money."

Below: Apple vs. the S&P 500 last week, normalized…

Disclosure: Although I am now an Apple shareholder (see Why I bought a share of Apple, my first), I am in no position to give trading advice. Don’t blame me if you drain your IRA doing something you read about here.

10 Comments

Rodney Avilla said:

I am hereby offering a formal proposal (disclosure: I am not an employee), that Apple increase its dividends. Dramatically. Not before you trip over yourself rushing to the keyboard to politely explain why buy backs are better for the investor, save your breath. I am fully aware of that (from both tax and growth perspectives). And personally, I benefit MUCH less from dividends. So why the proposal? Because Apple is such a cash cow, they can afford to do both. Easily. They are, if not the only company, that can do it. People who are living off their dividends mo to mo, would love it. Trying to sell aapl every 1-3 mos by timing the ups and downs of the market is a headache at best.

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June 6, 2021
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- Robert Paul Leitao said:
  
  Rodney: I agree. Dividends offset the opportunity cost of investing in equities. The company is in the enviable position of being able to support a higher dividend payout and dividend yield while also continuing to essentially buy itself. As the company continues what can only be described as a massive share repurchase program, Apple can increase the dividend per share and the dividend yield without a commensurate increase in the cash distributions for dividends due to the declining fully diluted share count. Interest rates will gradually move higher and there are concerns about rising inflation. A rising share price addresses the inflation risk. A higher dividend yield reduces the risk of investing in Apple (the opportunity cost) versus the return on stable-value, money market instruments and some classes of bonds.
  
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  June 6, 2021
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- Fred Stein said:
  
  Hi Rodney, While personally, I’d love a bigger dividend, let’s consider what Tim and Luca might weigh. 1) Stock price growth is a major long-term employee benefit. For top talent in Silicon Valley it is essential, existential. 2) A large one-time increase sets up expectations in Wall Street. First, if they double the dividend, that rate would be not be attractive if interest rates go up more than a bit. Second, yield seeking investors would focus on dividend policy each year, creating more volatility which is not good for employee morale. 3) Just my guess: Tim and Luca support investors who focus on 5 year (or more) total return, and long-term predictable dividend growth.
  
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  June 6, 2021
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- Bob Goldstein said:
  
  I also agree with Rodney. I am long for 21 years. I don’t want to sell shares until the RMD kicks in for me. We have a lot of expenses with my son in a Masters program and my daughter will be in college soon. My wife would like the option of retiring. I know I could start selling so my wife can retire if she wants, but I would prefer to hold the shares and get higher dividends. I had expected that dividends would be raised at a higher rate as more shares have been bought by Apple
  
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  June 6, 2021
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- Joseph Bland said:
  
  @ Rodney:
  
  I’d FAR rather see the price of AAPL go up than draw a tiny dividend increase. And whether folks want to acknowledge it or not, for Apple, reducing the float pushes up the stock price more than increasing the dividend. As for people who “are living off their dividends mo to mo”, do you have any conception of how much AAPL folks would have to own to live comfortably off the dividends? You’re talking about being a multi-millionaire! Somehow my heart doesn’t bleed for the poor multi-millionaires who are having a hard time living off their AAPL dividends….
  
  Do the math: At less than $1/year per share, to earn $50,000/year you’d need to own more than 50,000 shares. At $125/share, you’d have to own $6.25 MILLION dollar’s worth of AAPL.
  
  Sheesh.
  
  1
  
  June 7, 2021
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Gregg Thurman said:

For the past several weeks $124 seems to be AAPL’s support line. This last week I bought $123/$124 Call Spreads on Tuesday, then strapped in for the ride. Thursday I cinched my belt up a little tighter and was rewarded on Friday.

Traditionally, WWDC has been a buy the rumor, sell the news event. That hasn’t been the story the last two years as AAPL continued to go up through the week.

This leaves me wondering if this year will be a continuation of the last two years, or a resumption of historical WWDC action. I think all eyes will be on any news regarding the M series of chips. An M-2 with improved performance over the M-1, will impress Mac buyers, but what about about deaf, dumb and blind WS?

Since the start of FY2021 this has been the worst (39% loss rate) for my weekly trade strategy I started 5 years ago. That said I think the emergence from the pandemic is going to make people (including the sub-species known as the “Market”) to generally feel better and not quite so skittish.

With trepidation I’m going to try my strategy again this week. I’ll be looking to buy June 11 $123/$124 Call Spreads at $0.66. My forecaster says AAPL’s low tomorrow will be $0.67. Dreams are made of pennies.

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June 6, 2021
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Jerry Doyle said:

The future of Apple never has been brighter. The company also never has been as optimized as it is now, hitting on all cylinders & poised for new growth. It is not in Apple’s DNA to reward investors the company’s largess, but to use those proceeds instead to sustain the company on a viable long term trajectory for continued growth through production of the world’s greatest tech products & services. Apple’s focus is continuing to create unique & innovative products that will enhance people’s lives. Apple’s focus today remains Steve Job’s focus when alive. That focus is not to just make money, but to create a company to last for generations. Steve used to say this focus of Apple as he referred to other companies as examples, such as Disney. I see shareholders’ percentage of dividends continue increasing the same going forward. I do see, though, ever increasing innovation targeted to creating some of the world’s greatest products that will change & enhance personal lives. Apple’s best day’s lie ahead.

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June 6, 2021
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Fred Stein said:

The current sideways movement makes AAPL a great buy right now, regardless of what happens over the next few months.

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June 6, 2021
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- Jeff F said:
  
  My conspiratorial, tin foil hat lets me think the big call writers are just fine with collecting premium on the option rot. It’s an annuity for them during the flatline pattern.
  
  I thought (and hoped) the last two blockbuster quarters would have snapped AAPL out of its slumber, but the MMs have shown more discipline than I expected – again, a thin foil theory.
  
  When the June quarter is in (or just ahead of the report), Apple’s compressed P/E is going to look ridiculously cheap and possibly spur the buying that should have occurred w/FQ1 and FQ2 quarter results
  
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  June 6, 2021
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Jonny T said:

AAPL has been flatlining for so long now that the breakout when it comes will probably be spectacular…

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June 7, 2021
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