Best way to buy and invest in Apple (AAPL) shares from India
April 14 2022 - Team Stockal
Best way to buy and invest in Apple (AAPL) shares from India – Stockal
International Investments – Moving the money fish from the sea to the ocean
Investors always seek to put their money in firms and industries that promise the highest returns and stable growth in the future. An important key feature coupled with this approach to investments is diversification. Diversifying investments in different and distinct assets – a combination of possibly both the best debt and the equity funds – makes investments even more profitable.
Investors, therefore, often eye for foreign companies as investment options. This intent for international investments has been facilitated by a variety of measures taken by governments and private players. International investments allow you to participate in a larger ocean of stocks and shares, thus making more from your money. This article discusses the investment prospects in Apple Inc., a leading technology firm in the United States.
FAANG – The business of the big techs
When it comes to international investments, initially, one seeks to bet on the safer and more stable investment options. In finance, therefore, FAANG is an acronym given to the stocks of the Big Five, in other words, that of the prominent American technology companies – which include Facebook (FB) (now Meta), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Google (GOOG) (now Alphabet).
For more information about the FAANG stocks, read the following blog article explaining these big tech shares.
Apple – The silver fruit of money
The company that has been valued the highest globally, the company that generates the highest revenue in the tech industry, has attained global eminence for its imminent contribution to the technological space. Apple Inc., formerly Apple Computers Inc., has taken the field of innovation and invention by storm. This American firm founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne, has revolutionized the way electronics are perceived today. It was only in 2017 when Apple began to be included in the FANG, making it FAANG, the time when it had taken the markets by storm.
Apple’s supremacy in the sphere of luxury and utility has made it omnipresent and near-unbeatable today. This is why changes in Apple stock prices are relayed to the US NASDAQ and global stock exchanges.
For starters, it is crucial to understand the business of Apple. Apple is a technology and electronics firm that manufactures mobile phones, laptops, computers, wearables, home accessories and services, in short, everything in the tech space. The major products of the company include its iPhone series (the recent addition to the series is the iPhone 13 and iPhone 13 Pro), the Mac series of laptops and computers, the operating system (iOS) and cloud storage services (iCloud). It has even entered the accessories and smart wearables space – smartwatches (Series 7 is the newest product launched), wireless chargers, and Bluetooth earphones (popularly AirPods). Apple has expanded its services business – it has video streaming and music streaming platforms such as Apple TV+ and Apple Music (iTunes).
Apple is not just a utility-driven brand, it has become a fashion statement. Apple innovations are subjected to not just worldwide applause but criticism as well. The recent move to eliminate the headphone jack was globally rebuked so much so that it was reintroduced later by the company. This points toward the company’s active redressal to public grievances, opinions and criticisms.
Apple’s concern for its customer’s needs and demands has turned it into a global platform and made it an investable brand.
How profitable are Apple stocks?
It is equally essential for us to underline the financials of this global brand to be able to make an informed investment decision.
Just after four years of its establishment, Apple went public through Initial Public Offering (IPO) at $22.00 per share on 12th December 1980. The stock has been split five times (the most recent split happened in August 2020), taking the IPO share price (on a split-adjusted basis) to $0.10.
The company was the first to have touched the $1 trillion mark and the $2 trillion mark in 2018 and 2020, respectively, in market capitalization. It also briefly tipped the $3 trillion mark on 3rd January 2022, becoming the world’s most valuable company.
Apple Inc. has been listed on the NASDAQ Global Select Market (NasdaqGS) in the USA under the ticker symbol of AAPL. As of 7 March 2022, the stocks of the multinational technology company closed at $163.17. This is equivalent to INR 12470.35.
Apple gains maximum sales from its mobile phone range – iPhones – followed by its cloud and streaming services – iCloud and iTunes etc. The least contribution is made by the tablet series of Apple – iPad. The company spends enormously and generously on research and development. This is why it is believed to enjoy a monopoly in product development and innovation.
The results of the first quarter of the fiscal year 2022, which ended on December 25th, 2021, were announced on January 27th, 2022. The financial report shows Apple recorded an all-time high revenue of $123.9 billion – an 11% hike in revenue year-over-year. The CEO of the company, Tim Cook, claimed Apple products’ innovative line-up as the key reason for such a laudable performance. The company became the first to touch the $3 trillion market capitalisation mark as its shares shot up to $182.85 in January 2022. However, this has been followed by a subtle decline in the share prices
Source: Yahoo Finance
Why invest in Apple shares?
The following are some of the many reasons one must invest in Apple if looking for international investments –
1. Research and Development – As mentioned earlier, Apple’s expenses in product research and development are generous enough to make it a monopoly firm in the innovations space. This is proven by the worldwide excitement observed every time Apple reveals its product launches.
2. Business and Finance – Apple’s CFO recently announced that the financial results of the first fiscal quarter will enable them “to return nearly $27 billion to…shareholders…as we maintain…target of reaching a net cash neutral position over time.” The company’s board of directors have also announced a cash dividend of $0.22 per share of the Company’s common stock. These measures benefit the stock investors and will reap promised returns in the future.
3. Future Prospects – Analysts and global investors believe that there might be significant announcements about the company’s development of Virtual and augmented reality headsets development. Rumors have also been about Apple’s entry into the segment of automobiles. Thus, the company’s forward-looking approach makes it a profitable brand not just for innovators but also for the shareholders despite the short-term and medium-term losses that the company might face in the near future.
Does Apple’s stock price vary after a product launch?
Economists and analysts have used Apple stocks to underline several economic and market impacts. The most significant of these is the need for companies like Apple to beat the collective market expectations to influence the stock prices positively. Another distinct feature noted is that the product launches have not had much impact on the brand’s performance in the stock market.
This can be corroborated by a brief analysis of its product launches in the past.
iPods released in October 2001 had a slight immediate impact on stock prices, moving them from $18.14 to $18.95. Today iPods as part of the wearables category account for only 11% of sales, becoming slightly insignificant (in comparison to 51% of iPhones) for the company’s global revenue.
Released in May of 1998, the month when share prices fell to $26.69, the release did not have an immediate impact despite extensive sales. Eventually, after three months, the stock price rose to $43.
It was January 2007 when the first iPhone was announced. Over 2,70,000 units were sold within 1.25 days. Yet the stock price gained only 7 cents the following day. Again after a month, the prices bloomed by a 15.9% increase.
Similar has been the case with iPads. This suggests that new product launches have never contributed to the immediate rise in stock prices. Only after a certain amount of time do the markets react to Apple’s innovations. Yet this can give investors a deep insight as to when might be the right time to trade away the Apple shares and when might be the right time to buy them all.
How to invest in Apple stocks from India
Investors, even the ones from the US, cannot directly buy Apple stocks. As a result, trading happens with the mediation of brokerage firms such as Stockal. For investors from India wishing to invest in this big tech company, the central bank (Reserve Bank of India (RBI)) had announced a Liberalized Remittance Scheme for trading U.S. stocks from India. On March 3rd, 2022 however, significant development has further facilitated this process. Below is a list of ways one can invest in AAPL stocks and other U.S. Stocks –
- Via Mutual Funds and Exchange-traded Funds (ETFs)
The common mode of international investment is this way of Mutual and Exchange-Traded Fund investment. These funds invest in the top companies of the foreign markets including Apple. Some of the popular funds are Nippon India ETF Nifty BeES and Motilal Oswal NASDAQ 100.
- Via Brokerage Firms such as Stockal
This method involves opening a U.S. trading account through a company like Stockal that has tied up with a U.S. brokerage partner DriveWealth. You will be required to complete KYC and LRS formalities in coherence with the RBI’s guidelines for international investing. RBI permits investments of $2,50,000 per financial year in foreign investments. Stockal is one such platform that offers these services for facilitated trading. With over $600mn worth of transactions and over 220,000 users, Stockal is a one-stop solution catering to all your investment needs.
- Via NSE IFSC
In the month of March, a subsidiary of NSE for international exchange operating in Gujarat International Finance Tech City (GIFT City) received approval from the market regulator for the trade of 8 U.S. stocks, including Apple. NSE IFSC will ease the process of international trading even more and will be sustained by the Liberalised Remittance Scheme of the Reserve Bank of India. The depository receipts will be called the NSEIFSC receipts in ratios.
To sum it upInvesting in a company like Apple is considered prudent as it is a fundamentally strong company that can offer stable returns in the long run. For someone in India looking to invest abroad and in stocks like Apple, it is a good way to diversify the portfolio and minimize loss. And to ensure that you can invest without any hassle, Stockal offers a great platform where you have the option to invest in Apple stocks in fractions if you can’t afford to buy one full share.
To learn more, you can visit Stockal’s website here.