Stock Pick of the Week with Momentum Securities: 23 June - Apple

Momentum’s leading stockbroking division – Momentum Securities – will be bringing you their Stock Pick of the Week, each week on a Wednesday or Thursday.

The stock pick motivation is available as written content and a downloadable video and audio clip.

This week’s pick: Apple
About: Apple Inc. is an international American technology corporation, and the largest technology corporation in terms of revenue, globally. Apple has expertise in consumer technology, computer software, and online services. Since January 2021 Apple was ranked, the world's most valuable company.

Portfolio Manager for Momentum Securities, Wiehan van Zyl shares his insight on Apple.

Click here to download:
• the audio clip
• the video clip.

“This weeks’ stock pick needs no introduction as it's tech giant, Apple. You might be wondering, what will be the next big growth driver for Apple with its iPhone business maturing? The answer to that question lies in the two segments of Apple that saw the most growth in the March quarter, namely Apple Services and Apple Wearables.

In summary, Apple Services include the App Store, Apple Music, Apple TV and much more. This sector saw a 27% increase in revenue in the March quarter. Apple Wearables, which include products like Apple Watches and AirPods, saw a 25% increase in the March quarter.

For the longer term investor, it would be of great interest to note that Apple is planning to enter the electric vehicle market with their project, Titan. The Business Insider recently reported that Apple has hired former BMW executive Ulrich Kranz to help on this project.

Apple also has a fact set forecasted return of 25% for the next year. It is, however, important to note that the weakness we've seen in Apple’s share price is a result of a lawsuit Apple is facing with Epic-Games, relating to a 30% Commission fee Apple is charging for new developers on the App Store.

The result of the lawsuit will only be made clear in the next month or so. So, we therefore advocate to allocate 2% at current levels and a further 2% exposure to Apple stock once the lawsuits result has been made public.”