Apple analysis

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The Best Investement Security Analysis
Small Guide to Investing
Investment Analysis
6530 Kissena blvd Flushing NY 11367
1-(718)-570 0396
http://numeraxial.com/
NUMERAXIAL
How do I evaluate Apple Stock as
an Investment
This question comes up for most of us at some point. Am I missing one of the
best tech companies of the twenty first century?
We want to help guide undecided and fearful investors mitigate the
uncertainty and gain confidence in the process. Most of us do not have time to
keep track of stock movements, but we would like to put our hard-
worked money into some trust worthy companies like Apple for a better
saving rate, protect it and grow it.
To do so we would like to use simple but effective minimal tools and
techniques from the fundamental to the technical, to grasp the character of a
stock , in this case Apple stock.
We limit our analysis to the minimum number of attributes (indicators)
necessary to enter the trade, seize the opportunity according to the market
environment based on the investor risk appetite and goals, and increase the
profit expectation. Following this guide will give the retail investor a way to
generate income and invest with confidence.
This analysis uses standard indicators estimates as decision making principle to
take an appropriate action either to buy or sell your stock accordingly to your
predefined strategy

The Products
Product analysis looks at the qualitative aspect of the company including the company management team
and the latest products and services in order to assess the company’ future growth prospect.
Apple’ products line revenue is composed as follow:
IPhone: 48.75%
IPad: 9.42%
Mac: 9.98%
Wearable: 10.36%
Services:21.49%
Revenue by Region
Net Sales by Products
Americas,
46.56%
Europe,
22.16%
Greater
China,
17.02%
Japan,
7.59%
Rest of Asia
Pacific,
6.67%
iPhone Mac iPad
Wearables,
Home and
Accessories
Services
Sales $ 25,986 5,820 5,023 5,525 11,455
$ 0
$ 5,000
$ 10,000
$ 15,000
$ 20,000
$ 25,000
$ 30,000
Q2 2019 Net Sales by Products
Corporate Profile
Apple Inc. an information technology
company operating in the computer
equipment sector it designs, develops
consumer electronics, computer
software and online services.
The Management
CEO Tim Cook
Market Cap: $991.68 B
Shares Outstanding: 4.5 B
Q3 Revenue: $53.8B
Q3 Dividend: $2.18
Q4 Project Revenue: $61B-64 B
Number of Employees: 132K
Sector: Communication Technology
Strengths:
iPhone XI Pro/
Weakness
Data security
Foreign Exchange

The Technical
Technical analysis studies the patterns in market data to
identify the trends and make decisions accordingly.
Stocks charts are used for visual representation to locate
patterns and clusters; you can supplement your action
with few technical indicators to support your view on the
market direction.
Moving Averages-MA
A moving average is the average price calculated over the
given period.5-day, 20-day and so forth. The MA helps
smooth out price by removing noise. It also signals a trends.
When two moving average lines cross
 A potential uptrend signal is when short term MA (5-
day) crosses above a long term MA (20-day)
 A potential downtrend signal occurs when the short
term MA (5) crosses bellow the long term MA (20)
Moving Averages Convergence Divergence- MACD
The moving average convergence divergence is the difference
between two moving average 12-day, 26-day MA The
MACD helps signals a trends.
 MACD positive indicates an uptrend
 MACD negative indicate a downtrend
Relative Strength Index-RSI
The relative strength index is a measure of momentum it
indicates the strength of uptrend days against the downtrend
days RSI helps signals a trends. RSI varies between 0 and
100
 RSI overbought above 70 an uptrend
 RSI oversold below 30 downtrend
For beginners these three technical indicators will serve as a
starting point to understand what turn the market is taking,
sometimes the indicators will not be able to tell you what
the market is up to, in that case you might have to dig
deeper
Date Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19
MA(10) 195.81 194.58 188.35 202.27 204.79 214.86
MA(26) 190.16 197.78 187.07 198.38 204.50 210.41
MACD 190.16 197.78 187.07 198.38 204.50 210.41
RSI 195.81 194.58 188.35 202.27 204.79 214.86
Statistics Q4.18 Q1.19 Q2.19 Q3.19
Total Return (%) -30.35 20.80 3.89 11.85
Std. Dev (%) 33.56 24.92 23.68 22.64
Skewness -0.38 0.59 0.34 0.73
Kurtosis 0.21 3.43 0.33 2.91
13 Week High 233.47 193.61 215.31 228.22
13 Week Low 151.55 140.51 170.27 192.58

CHARTS
173.7
197.2
212.2
207.9
224.0
194.58
188.35
202.27
204.79
214.86
197.78
187.07
198.38
204.50
210.41
MAY-19 JUN-19 JUL-19 AUG-19 SEP-19
RSI
pRICE MA(12) MA(26)

The Fundamental
Fundamental analysis studies the company financial
statements estimate the company valuation. The
calculation of stock intrinsic value, strategy used by
investor’ like Warren Buffet. The different ratios which
will help you get a diagnostic of the financial health of the
company. in this do it yourself guide will focus on three
or five ratios that statistically have significant drive in the
company stock price. Including Price Earnings ratio PE,
Earnings, Price to Book ratio P/B, Debt equity ratio,
Earnings per share
Earnings
 Revenue: $53.8 Billion
 EPS: $2.18
 Dividend Yield:1.27%
P/E: 18.38
The price earnings is a measure of valuation relates a
company's share price to its earnings per share.
P/B: 11.01
The price book ratio is a relative measure that compares
the current stock price to its book value.
ROA: 15%
The return on asset is a measure of how profitable a
company is relative to its total assets. ROA gives an idea
as to how efficient a company's management is at using
its assets to generate earnings.
ROE: 52%
The return on equity is a measure of the profitability of a company
in relation to the equity
Growth (1Yr): EPS 6.5%
The company growth of fundamental metrics is another
way to look at the consistency and sustainability of future
prospective depending on your investment horizon we can
look at 1, 3 or 5 year growth of revenue, EPS, dividend
yield etc…
The Economy
The Trade War & Politics
Since 2017 the US-China trade war has been one of main
political factor driving the stock market. Here is the impact of
the trade talk on the SP 500, Nasdaq and Apple stock
The Fed and the Interest rate
The yield curve slope gives us a view of the future of the
economy
1
1.5
2
2.5
3
3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
Yield Curve
Economic Indicators
The leading economic indicators driving apple stocks
includes:
Consumer Price Index CPI
Consumer Confidence
Non Farm Payroll
Industrial Production

Investment Objective
The growth of investing $10,000 in apple stock from 9/2018 to 9/30/2019 compared to the S&P 500.
$6,000
$6,500
$7,000
$7,500
$8,000
$8,500
$9,000
$9,500
$10,000
$10,500
$11,000
Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19
Growth of APPL Growth of S&P500
Apple, Inc. Bench: SP500 Sector: IT
Enter Date Current Price Ticker # Shares Market Value Target
09/30/2019 $ 223.97 AAPL 100 $2239.7 $3135.58
Pos. Long Update: 1M Horizon: 1 Year Update Freq: 1 M
Your goal is to make 40% of your principal over 1 year horizon by investing in Apple stock to do so we
do a comprehensive analysis to have a clear view of the security based on various technical methods.
The investment strategy dollar cost averaging, possibly add $20 each month with monthly re-assesses of
the holdings.

More Analysis
Impact of IPhones on Apple Stock Price
Regression analysis is a statistical method which study the relationship between two variables in this guide we look
the way sales of IPhones impact the movement of apple stock price .The independent variable is the number of
IPhone sold and (X) and apple stock price is the dependent variable (Y).Using quarterly historical data we found that,
the impact the number of IPhones units sold on the stock price is relatively strong consistent with the percent
revenue generated by IPhones. The regression analysis between the two variable shows that There is a 60%
explanatory power of this product on the movement of the Apple stock price (R-Square=61.12%).
Statistics Value
R-Square 61.12%
Adjusted R-Square 59.19%
Std Error (Alpha) 9.398
Std Error (Coef) 0.0002
t-Test 2.302
P-Value 0.022
Nbr of Obs 45
Intercept 22.995
Slope 0.0019
Historical Probability of making money measure the odd of making money if you had invested in apple stock over the past
4 quarters. Which is different from the risk neutral probability
ADVANCED MODEL
Some advanced model predict the apple stock can up to $294.52 over the next six month
y = 0.0019x + 22.993
0
50
100
150
200
250
0 20000 40000 60000 80000 100000
Stock Price vs Nbr of IPhone Units
40.98%
65.57%
47.54%
54.10%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Q4.18 Q1.19 Q2.19 Q3.19
Prob(making money) (%)

Risk-Reward Analysis
The risk-reward analysis is a method of assessing the reward relative to the risk on the investment. The figure bellow
shows the monthly total return against the value at risk of apple stock over the past 12 months. We can see that apple
suffered six down turns the worst lost in the month of March 2019 ,with the best month being June with 14.20 %
Risk & Performance (APPLE
 Sharpe ratio of -0.00113 which is the average return earned in excess of the risk free rate per unit of volatility or
total risk.
 Information ratio of -0.01 above the returns of a benchmark usually an index to the volatility of those returns.
 A Treynor Ratio of -0.0024 which measure the returns that exceed those that might have gained on a risk-less
investment per each unit of market risk.
 Beta :of 1.34
 Value-at-risk: $45.26 potential loss based on investment of $2239.7
 Tracking Error: 1.38% relatively to the broad market S&P 500
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Return VaR
Performance Risk Measures
Sharpe -0.00113 Price Volatility $ 45.26
Information -0.01 Value at Risk(%) 5.52
Treynor -0.0024 Beta 1.54
Tracking Error (%) 1.38

Future Stock Volatility
The implied volatility is the volatility calculated from the strike prices, it tells us about the future market volatility of
the stock against different strike price over time
Implied Volatility Scatter 3D Plot
Maturity Strike Implied
Volatility
11-Oct-19 190 68.16%
18-Oct-19 230 25.95%
25-Oct-19 210 40.39%
1-Nov-19 230 31.89%
8-Nov-19 230 27.94%
15-Nov-19 220 29.27%
22-Nov-19 225 27.85%
20-Dec-19 230 26.59%
The Take Away
This security analysis presents a multi-dimensional view of apple stock including: corporate, financial, technical and
economic. The profile analyzed key metrics in each dimension, it does not provide buy and sell recommendations
but acts more like a decision-support tool to make the optimal decision for your investment
Investing in a stock can be simple, do your due diligence screen the company profile and financial, look at the
earnings growth including revenue, EPS, P/B to get started. From the technical analysis prospective these three
indicators MA, MACD and RSI for market direction. During this long bull market cycle on average Apple stock has
been consecutively down 3 months in the row and on the upside 4 months. As you prepare for the looming recession
adjust your positions and strategy accordingly.
The decision table regarding to buy or sell
MACD > 0 Buy, <0 Sell
RSI <30 Buy >70 Sell
CCI <-100 Buy >100 Sell
%D <20 Buy >80 Sell

“The best independent
investment analysis
team for your money”
Jean G. Ndoutoumou
Mr. Ndoutoumou
manages the products and
research analysts team at
Numeraxial, Jean was former
Associate Portfolio Manager and
Quantitative Analyst for several
Hedge Funds, is a member of The
Society of Quantitative Analyst
and Investment Management
Professionals he holds a MA of
Artificial Intelligence from ENS
Cachan
For more Information Call
1-718-570-0396
Contact us at : info@numeraxial.com

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