This week's Apple trading strategies (3/14-3/18/22)

A place for Apple traders and investors to share their best ideas.

To get things rolling, here's a good one: Daring Fireball's John Gruber with CNBC's Jon Fortt making sense of last week's product-packed Apple event.

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

apple trading strategies 3-14-22
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.

See also last week’s trading strategies.

10 Comments

  1. Michael Goldfeder said:
    @Joseph: When Apple restarted their dividend program, did you use those dividends to purchase more shares? Or did it create enough of an additional cash surplus to obviate you from having to sell more shares to maintain your cash buffer throughout the year?

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    March 13, 2022
    • Robert Paul Leitao said:
      Michael: While Apple’s dividend yield is a low 0.569% at Friday’s closing price, the dividend growth rate is attractive for long-term investors. With rising interest rates, Apple’s ability to increase its dividend at will is a positive for the share price. Apple’s current annual dividend payout of $.88 represents only 15.7% of the company’s FY2021 EPS of $5.61. Understanding buybacks have been the primary focus of the capital return program, delivering a more attractive dividend yield with continued strong compounded annual growth rates will only add to the total return appeal of the shares on a long-term basis.

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      March 13, 2022
      • Bob Goldstein said:
        When the dividends and buybacks started I decided to take my dividends as cash in my taxable account to fund my retirement and I reinvest the dividends in my IRA account for shares. It has worked out well, I have a nice retirement and I am still adding to my shares.
        I see the dividends as money in my pocket and I basically take it on faith that Tim Cook and Luca know what’s best as far as the buybacks go

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        March 13, 2022
  2. Robert Paul Leitao said:
    Keying on the comment of the interviewer, Apple has transitioned (for the moment) the narrative to the company’s advances in silicon. For all of the discussion and debate about Apple’s migration into Services, Apple’s hardware leadership has not and likely won’t be the subject of regulatory or legislative review. Like it or not, Apple is considered first and foremost a hardware maker. This week’s exciting product announcements play to the company’s perceived strengths and are well within the market’s “comfort zone” for the company. Last week’s special event is a positive for the share price.

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    March 13, 2022
  3. Michael Goldfeder said:
    @Joseph: Thank you.

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    March 13, 2022
  4. Michael Goldfeder said:
    @Robert: I’m going to go out on a limb and predict that Apple will now be a bit more bold and up their $.88 yearly dividend to an even $1.00 based on their FCF. Buybacks will be another $90 billion if they raise the dividend to $1.00. If they only raise the dividend to $.96, then I’m expecting a buyback authorization of $100 billion.

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    March 13, 2022
    • Robert Paul Leitao said:
      Michael: I do believe it’s in the interest of Apple and its shareholders to move the dividend to $1 per annum per share or $.25 per quarter. At the December quarter’s fully diluted share count, the capital required would be about $16.5 billion per annum for a $1 dividend versus about $14.5 billion at the current payout of $.88. Using your example, moving the dividend to $1per annum per share versus $.96 per share, would require an additional cash deployment over 12 months of about $650 million. In other words, Apple can move the dividend to $1 per share and continue share repurchases at or near the current pace. Deploying 25% of the prior fiscal year’s net income for dividends would move the dividend to about $1.40 per share per annum or a yield at Friday’s closing price $154.73 of about 0.9% and a cash deployment per annum of about $23.10 billion. I can dream, right?

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      March 13, 2022

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