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Analysis of Apple

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TABLE OF CONTENTS 3 Apple – An Introduction 3 Macroeconomic Trends 4 Technical Analysis 5 Fundamental Analysis 8 Analysis of Financing Activities 8 Investments and Capital Budgeting Decisions 10 Industry Analysis 11 Performance Analysis APPLE INTRODUCTION Established in 1976, Apple ignited the personal computer revolution with the Apple II and the Macintosh. Today, Apple designs, manufactures and markets personal computers, portable digital music players and mobile communication devices as well as related software, services, peripherals and network solutions. Apple sells its products worldwide through its online stores, retail stores, direct sales forces and third party distributors to its core customers—consumers, …show more content…

These erratic movements suggest that Apple stock will remain volatile in the short run, while posting a slight upward trend towards the end of 2008. We recommend a short term sell option to cut losses. Alternatively, we can also hold the stocks to take advantage of the possibility that the stock prices will rise as predicted by the above diagram from Chartnexus.com. LONG TERM ANALYSIS Analyzing Apple’s stock price movement for the past three years, there has been a steady upward trend in the past one and a half years, from August 2007 to December 2008. The MACD began to move erratically from April 2008 onwards which suggests that the trading environment is growing more unpredictable with investors’ confidence changing momentum more drastically. This could be due to the looming global economic crisis. From the graphs below, one positive note is that Apple’s stock price consistently outperforms the market indices—the Dow Jones Industrial Average, S&P 500 and NASDAQ. In the long run, Apple’s stock is expected to rise tentatively in this volatile trading environment. Should this trend hold strong, we would recommend a buy option as the prices are on an upward sloping trend. FUNDAMENTAL ANALYSIS THE INDUSTRY LIFE CYCLE Apple’s main industries, personal computer, portable music player and mobile phone industries, are generally in the Shakeout Phase. These industries reflect Investopedia’s traits of a Shakeout Phase : 1. The presence of one dominant design, the

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