It's Party Time For Apple Shareholders 🕺💃
If you're an Apple shareholder, you have no reason not to be chuffed after the Tech Giants shares have risen 125% over the past year. By comparison, the S&P 500 is up 19% over the past year. Shareholders had more reasons to smile recently as the shares surged to an all-time high after the company announced better than expected second-quarter results. Some of the highlights included:
A 4:1 stock split scheduled for August 28.The last split was a 7:1 split six years agoÂ
Revenue is up 10.9% year-over-year
Gross margin is up 12.1%, operating expenses up 10.4%, operating income up 13.4%, net profit up 12%
This was Apple's best third quarter ever.Â
The good news has helped push Apple’s market capitalisation to over $US 2 Trillion recently. This made Apple only the second company other than the oil giant, Saudi Aramco to hit the milestone and the first company listed in the U.S. to hit a 2 Trillion market cap.
To put that in perspective, the market cap of Apple (2.13T as of today) has surpassed the market cap of the whole S&P500 materials sector (2.02T). To put it another way, Apples market cap is larger than the Australian Stock Exchange (ASX) by market cap, which is home to over 2,300 public companies.Â
There are a few standout reasons for Apple's recent run, IPhones are still the beating heart of the business, but Apple has quietly become a dominant market leader in wearables. The services segment (think i-cloud subscription) is also an unsung hero of the Apple story, and it makes hardware including Macs and iPads stickier. Big tech stocks like Apple, Amazon, and Microsoft have navigated the pandemic virtually unscathed, which has also triggered a boost in the stock price as investors hunt for stability.Â
The company is also in an extremely envious financial position, which bodes well for investors from a security perspective. Based on their most recent report, Apple had cash on hand of over a US $90 Billion dollars. Yes, 90 billion in cold hard cash.Â
Apple is trading on a trailing twelve month (TTM) Price to Earnings Ratio of 38, which is significantly higher than it's 10-year average of roughly 16. The high P/E multiple indicates significant optimism in the future of Apple.Â
What direction Apple goes in from here is not for me to say, but from all accounts, things look to be going swimmingly.