Apple Case Study: Analyzing Stocks and Buying Others to Invest in
Apple is one of those companies that everyone loves -- they either love to hate it or love to love it.
Of course now that Apple (AAPL) has become one of the largest companies in the world, many investors have it in their portfolio.
Apple's stock performance is especially influenced by the release of killer products like the iPod, iPhone, and most recently, the iPad.
Steve Jobs, the iconic CEO of Apple is also a key component of Apple's success, as demonstrated by the company's meteoric stock price rise ever since he came back to take the helm of Apple.
There are tools available that can help investors decompose the drivers that in the past have moved Apple's stock but which weren't controlled by Apple.
But what else has in the past influenced Apple shares? In fact, there are approximately a dozen drivers contributing to the performance of every stock traded in the market and we will analyze the drivers most influencing Apple's past 5 year performance.
One of the biggest recent drivers of Apple's stock is the "size" component.
Apple's market cap is significantly larger than the size of an average public company.
This means that when investors are seeking quality companies, they tended to buy larger, more established companies like Apple.
in the past, Apple was always considered a high growth stock.
Growth means how fast (or slow) a company's earnings are growing, and Apple's earnings are growing much faster than the average company.
Apple also happens to be one of the more actively traded stocks in the market.
Historic high trading volume means that a company's stock price may be more influenced by short-term trader sentiment than by key fundamental results.
Historically, one way to improve performance was to buy stocks online that have exposure to desirable stock market drivers.
Apple for example used to have low exposure to market sensitivity (beta), earnings, and short term (monthly) performance.
According to an analysis a few years ago, approximately 44% of Apple's stock price correlation was due to exposure to company size, trading activity, value, and other stock market drivers.
It is clear from using an analysis tool that every stock can be analyzed beyond its intrinsic fundamental and price performance to better understand what moves a stock's price.
More importantly, identifying those drivers allows investors to improve their overall portfolio performance by choosing complementary stocks to neutralize exposure to undesirable drivers.
Apple Inc (AAPL) will continue to innovate their products and change industries as we know them.
Even though Steve Jobs has now stepped aside from a day to day role, his DNA with respect to design, marketing, and innovation will continue to influence the company and its progress for years to come.
It will be exciting to see what "i" comes next.
Of course now that Apple (AAPL) has become one of the largest companies in the world, many investors have it in their portfolio.
Apple's stock performance is especially influenced by the release of killer products like the iPod, iPhone, and most recently, the iPad.
Steve Jobs, the iconic CEO of Apple is also a key component of Apple's success, as demonstrated by the company's meteoric stock price rise ever since he came back to take the helm of Apple.
There are tools available that can help investors decompose the drivers that in the past have moved Apple's stock but which weren't controlled by Apple.
But what else has in the past influenced Apple shares? In fact, there are approximately a dozen drivers contributing to the performance of every stock traded in the market and we will analyze the drivers most influencing Apple's past 5 year performance.
One of the biggest recent drivers of Apple's stock is the "size" component.
Apple's market cap is significantly larger than the size of an average public company.
This means that when investors are seeking quality companies, they tended to buy larger, more established companies like Apple.
in the past, Apple was always considered a high growth stock.
Growth means how fast (or slow) a company's earnings are growing, and Apple's earnings are growing much faster than the average company.
Apple also happens to be one of the more actively traded stocks in the market.
Historic high trading volume means that a company's stock price may be more influenced by short-term trader sentiment than by key fundamental results.
Historically, one way to improve performance was to buy stocks online that have exposure to desirable stock market drivers.
Apple for example used to have low exposure to market sensitivity (beta), earnings, and short term (monthly) performance.
According to an analysis a few years ago, approximately 44% of Apple's stock price correlation was due to exposure to company size, trading activity, value, and other stock market drivers.
It is clear from using an analysis tool that every stock can be analyzed beyond its intrinsic fundamental and price performance to better understand what moves a stock's price.
More importantly, identifying those drivers allows investors to improve their overall portfolio performance by choosing complementary stocks to neutralize exposure to undesirable drivers.
Apple Inc (AAPL) will continue to innovate their products and change industries as we know them.
Even though Steve Jobs has now stepped aside from a day to day role, his DNA with respect to design, marketing, and innovation will continue to influence the company and its progress for years to come.
It will be exciting to see what "i" comes next.
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