When To Sell Apple Stock: Apple (AAPL) has been in a freefall since reaching historic highs at the start of the year. The subsequent two months began massive declines, fueled by the novel coronavirus’s effect on the tech company’s global supply chain and market.
Although headquartered in Cupertino, California, a large portion of Apple’s manufacturing occurs in Shenzhen, China. This means the company has been weathering the effects of this pandemic much longer than the average American, and you can see it in the stock reports.
Despite the massive hits, Apple isn’t simply taking the beating lying down. It jumped into PR mode, taking the lead in sending employees home, partnering with the Center for Disease Control on a coronavirus screening app, and sourcing and donating 10 million masks to the medical community. The company even aired a rare Oprah Winfrey special on its Apple TV special during the coronavirus lockdown.
It’s staying productive in the face of global shutdowns, but that doesn’t make the tech giant immune to the devastating effects this viral pandemic is having on the global markets. Questions swirl around how it’ll recover from the factory shutdowns in China and position its products toward an economy with far less disposable income to spend.
The question on Apple shareholders’ minds is when to sell apple stock?
Will Apple Stock Keep Going Down?
Although it got hit hard by coronavirus, Apple’s Chinese factories were back up and running by the end of March 2020.
Of course, the real question is whether there will be demand for an expensive iPhone 5G in an era where people’s retirement funds are being annihilated by the market and toilet paper is a premium.
Even worse – global municipality shutdowns of “non-essential” businesses leave many without options to get their iPhone fixed in the event of a breakage.
The branded Apple stores were closed in early March indefinitely, and it could be summer by the time they’re reopened.
Jewelry, watch, and electronics repair shops were also closed, along with Best Buy, whose Geek Squad is one of few authorized Apple repair shops.
iPhones are notoriously difficult to perform even simple repairs like a screen or battery replacement. Apple products are also infamously priced much higher when compared to similar Android or Windows devices.
Apple worked over the 2010s to transform itself into a luxury brand, releasing high-end smartphones and wearables, often costing over $1000.
This upscale image could hurt the company in the wake of the coronavirus, but it’s too soon to understand exactly how this is impacting the economy. A record-shattering 3.3 million unemployment claims were filed around the country in the first week of the nationwide shutdown.
Regardless of the work Apple is doing to help, it could continue sliding downhill through the 2020 holiday season. Much of its profitability hinges on the sales of the 5G iPhone 12, which will inevitably be delayed. The company is still heavily focused on its Mac line of laptops and iPad tablets, but its cool factor relies heavily on a successful iPhone release.
Is AAPL Stock a Buy or a Sell?
While the outlook for the entire economy is cloudy, Apple isn’t viewed as a company in any real danger of going bankrupt.
It dipped below the trillion dollar company mark (only Microsoft held onto that distinction through the pandemic), and that could mean it’s a great time to buy stock. It’s deeply discounted from previous market highs, giving it plenty of room to grow.
High-end or not, iPhones represent over 50% of the global smartphone market, and they’re just one piece of a larger Apple-based ecosystem.
From Beats by Dre headphones to Apple Music, Apple TV+, Siri, and more – Apple is heavily focused on integrating necessary technologies. It creates both hardware and software, and it’s been spending heavily in the content creation arena too.
Because it was integrated with an existing Apple audience, Apple TV Plus already has more subscribers than Disney Plus and Hulu. It’s on its way to 40 million subscribers by the end of 2020, according to Variety.
The company’s financial reports show its wearables, home, and accessories division grew from $5.1 billion in the second quarter of 2019 to $10 billion in the first quarter of 2020. These revenues should give it the liquidity to survive any coronavirus-related problems.
Although Microsoft may be the only trillion-dollar tech company to survive the pandemic quarantine, Apple will always be competitive with its longtime frenemy rival.
As a long-term investment, Apple continues to impress analysts and lead every industry it’s involved in. From wearables to smart home, streaming, and smartphones, the company is on the cutting edge of consumer technology.
That leaves one last question – if Apple is a long-term investment, when is a good time to sell stock?
When to Sell Apple Stock?
The answer of when to sell Apple stock is a hard one to answer, because it depends on when you bought it. When Apple went public in December 1980, its shares sold for $22 each. If you invested that $22 back then, you would have experienced four splits and now own 56 shares, each worth over $200, for a total of over $11,200. Selling Apple stock is always worthwhile for those early investors.
Anybody who invested in Apple under $200 can still sell during the recession and come out on top. If the price drops below $200, you may want to consider selling. So long as you bought before 2017, you’ll about break even. There’s a long way to go down, but Apple is well positioned to survive the outbreak.
If you want to sell Apple stock, there’s always a buyer. It’s one of the most valuable brands in the world, even in 2020.
For long-term investors, the answer may well be to never sell Apple stock. Few other companies have the fortress balance sheet Apple enjoys. Few companies enjoy the trusted brand reputation Apple does. And let’s be honest a blip in revenues is unlikely to translate to consumers giving up their iPhones.
With that said, if a mass adoption of Samsung / Android phones took place, or Apple failed in its bid to dislodge Netflix when it comes to streaming, it may be time to examine the value of selling Apple stock based on fundamental reasons.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.