With US Labor Day on Monday shares might not be quoted and traded but it has given brokers and pundits even more time to step back and assess pet stocks for how well – or badly – they fare.
None come bigger than Wall Street’s Apple Inc (NASDAQ:AAPL), which leads the rank of the largest caps on the US bourse, followed by Google owner Alphabet Inc (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and Warren Buffett’s equities investor vehicle Berkshire Hathaway (NYSE:BRK-A).
Apple shares closed up 0.9% at $107.73 on Friday, but the share price has, all told, been jobbing a range of $110 to $90 since December 2015. That has had some pundits thinking.
The lack of any great price momentum in Apple’s stock suggests expectations for the new iPhone 7 are relatively low compared to previous launches as company CEO Tim Cook prepares to unveil the next-generation product, potentially on Wednesday at the Bill Graham Civic Auditorium in San Francisco.
“Apple’s share price is up by just 6% over the last six months – this compares to the average 23.6% gain in the six-month periods seen ahead of the previous launches of iPhone 1, 3G, 4, 5 and 6,” said Russ Mould, investment director at AJ Bell.
“History also suggests that Apple stock has tended to price in much of the good news regarding a new product release ahead of the fact, looking at how the shares on average ran up strongly going into prior key launches and then trod water afterwards (although there is a wide range of performance from cycle to cycle).
He said that if iPhone 7 shows little more than a series of cosmetic, incremental upgrades that will raise the stakes for iPhone 8, the tenth-anniversary product which is due for release in 2017.
“A flat-lining share price this autumn could just push boss Cook further into the spotlight, as he becomes embroiled in a tax row with the EU and tries to revive the company’s flagging momentum.
“In the quarter to June, net profit fell 27% year-on-year, the steepest drop for more than a decade, although Apple suffered a similar swoon in 2013 and then bounced back quickly:
He accused Cook of buying time with increased dividend payments and a stock buy-back programme.
“But ultimately investors want to buy into Apple for its competitive advantage, leading products and the benefits it reaps from the ecosystem of app developers – and not mere financial engineering,” Mould said.
“Apple Car looks to have stalled, Apple Watch has yet to fire consumers’ or investors’ imaginations and many will have nodded off while waiting for Apple TV to grab their attention, so Cook still faces the unenviable (and some would say impossible) task of proving he can drive forward the company’s product roadmap as effectively as his predecessor, Steve Jobs.”