Apple shares crash in August: is it time to buy or sell?

So far in August, shares of Manzana accumulate a drop around the 10%until the $177. According to experts, the value has now entered a technical correctionfrom its maximum of last July 31, $196.45so the question that arises among investors is what to expect for the company papers for the remainder of the second semester.

A correction is usually defined as a decrease of at least the 10% on the price of a stock or market. According to experts, the meager performance of Manzana is due to several factors. On this aspect, Fernando Dirázarinvestment advisor at Del Sur Capital Markets, explains to Ambit that, after an excellent first semester, the shares of Manzana experienced a notable increase. However, during the month of August, there has been “a small downward correction in its value”. This correction is attributed to two main factors:

• The financial balance that was known a few weeks ago was not “as positive” as expected.
• The downtrend that has affected to the United States stock market in recent weeks contributed to the situation: the S&P 500 has fallen 4.8% and the Dow Jones Industrial 3%.

Apple: why its poor performance is due

The first and most important cause of its monthly decline is the increasing economic pressure in China, which broke out in August. Fears about the health of over-leveraged property developers, the slowness of the Chinese government to act on the crisis and the fall of the stock market in those latitudes have clouded the outlook for demand for Manzana.

Do not underestimate the importance of China in the results of Manzana. The sales of the manzanita company in the Asian giant increased 8% in the most recent quarter, up to US$15.760 million. sales of iPhones in that country they expanded by a double-digit percentage as consumers upgrade their smartphones.

Experts project that Apple’s sales in China will amount to $67.2 billion in the fiscal year ending September 24, 2023which represents the 18% of the company’s total sales.

The analysts of Wall Street currently expect sales in China to increase almost 16% in the new fiscal year of Manzana Thanks to strong demand from iPhone 15.

But the CEO Tim Cookdoes not seem so optimistic in lowering expectations about China by delivering some prudent financial projections for the September quarter, when it presented its results earlier this month.

However, Apple is a company with solid fundamentals and sustained growth, so Elena Alonsograduated in Economics, considers that despite the performance of August, the shares of Manzana they are “an asset to have in the portfolios” of investment.

Apple: what to consider when investing

Manzana stands out not only as one of the most innovative companies, but also for its unmatched brand strength, which constitutes a relevant competitive advantage. Its powerful presence in the daily life of consumers has been cemented through its ecosystem of applications. This presence unquestionably consolidates its position in the market.

For this reason, Alonso maintains that Apple’s role is an asset for “buy and leave long term“, because with the capitalization that the company presents, it is “an opportunity to generate an increase in the return of the overall portfolio.

A fundamental principle that supports the investment thesis in Apple is its solid strength in terms of dividends. Its considerable net cash stands as a major asset, conferred for its mammoth net cash position. It is crucial to highlight that the massive generation of free cash flow by the company acts as the engine behind the growth of this financial position, without this compromising its ability to pay ever-increasing dividends.

Dirazar He also expresses himself in the same vein and adds as advice for the investor, not to be alarmed by the August that Apple’s shares present, since “it is a normal market correction, and it seems to me that it is time to buy”, highlights the analyst which adds: “This is not the time to sell or maintain, but to accumulate and buy“.

Apple: the possible disadvantages

It is somewhat difficult to identify major drawbacks in investing in Apple. However, it is essential to consider competing capital allocation options, which could influence the speed of dividend expansion in the future. These options encompass strategic acquisitions of differentiated technologies and share buybacks, the latter having been notable in recent fiscal years. In fact, in fiscal year 2022, buybacks reached a staggering US$89.400 million.

In summary, despite some considerations about the allocation of capital and acquisition trends and share buybacks, the temporary challenges in the supply chain they should not significantly erode Apple’s dividend growth potential.

Gaston Lentinifinancial advisor and suitable in the market, maintains in dialogue with Ambit that, “for the past few months, I’ve been suggesting that you don’t buy Apple stock.” This, because according to his analysis, the stock had already “reached maximum levels in terms of price”, and after presentation of the balance sheet, “it looked like it was in need of a correction“.

Nevertheless, Lentini slides that it is a good time “to take a position” and indicates: “Currently, Apple stock is trading around the u$s177. From my perspective, the area around $170 presents an interesting point to consider taking a position. Although the maximum price reached almost $200, with an exact value of $198.23, the recent fall suggests the possibility of taking advantage of an attractive entry momentespecially if the price is closer to $170 or even $165.”

This strategy could result “particularly valuable“, comments Lentini, considering the upcoming release iPhone 15 and other factors. Furthermore, it is essential to recognize that Apple enjoys a strong position in the minds of consumers, which contributes to its stability in the market. Although the financial adviser had previously suggested refraining from buying, the current price correction could create a window of opportunity to invest in Manzana.