Adobe

Trade Adobe Stock

Headquartered in San Jose, California, Adobe Inc. was founded by John Warnock and Charles Geschke in 1982. The name ‘Adobe’ was a reference to Adobe Creek; a 14.2 mile-long stream that ran behind the house of Warnock in Los Altos, California.

Adobe was originally incorporated in October 1983 in California, and later, on May 1997, it was reincorporated in Delaware as Adobe Systems Inc. Adobe held its IPO on the 20th of August 1986, listing on NASDAQ and trading under the ticker ADBE. The stock is part of the Technology sector, in the Software industry, under the Application Software sub-industry.

Open an account and start trading Adobe stock CFDs Today!

Adobe started out as a mere technology supplier but has grown to be one of the most recognisable names in the software developing industry, still in 2019. It operates through 3 main business segments: Digital Media, Digital Experience and Publishing.

The Digital Media segment provides creative design tools and resources for individuals and businesses to use when creating, publishing or promoting different forms of digital content. The Digital Experience segment provides various solutions that enable efficient creation, management, execution, as well as optimisation of digital advertising and marketing strategies. The publishing segment provides niche solutions and legacy products in areas, such as high-end printing, technical printing and eLearning services.

Mergers and Acquisitions

Adobe revolutionised the print and design industry and arguably dominated it over the years. The company has always sought to lead, or at the very least, follow the industry; and it has managed to do this by maintaining an active portfolio by making strategic direct and indirect acquisitions. Adobe has made over 54 acquisitions in its history, with recent notable deals such as: Omniture ($1.8 billion), an online marketing and web analytics company; Neolane ($600 million), a conversational marketing technology provider; TubeMogul ($540 million), an enterprise company for digital branding; Magento Commerce ($1.7 billion), an open-source modern cloud commerce platform; and Marketo ($4.8 billion), a provider of marketing automation software.

Adobe Stock History

Since going public, Adobe has had stock splits as follows: 2-for-1 on the 23rd of November 1988; 2-for-1 on the 11th of August 1993; 2-for-1 on the 27th of October 1999; 2-for-1 on the 25th of October 2000; and finally, 2-for-1 on the 24th of May 2005.

Adobe stock has had an overall positive trajectory in its entire history. It initially trended sideways in its early trading days, suppressed below the split-adjusted price of $10 per share. The tech boom at the turn of the millennium provided tailwinds that pushed the stock to a high of circa $40 by March 2000. The subsequent tech bubble burst drove the stock to lows of circa $8 by August 2002.

The stock then turned higher and managed to peak at circa $45 by November 2007, before the 2008 Great Recession triggered a tumble to circa $16 by March 2009. The stock has trended higher since then, and it managed to print its all-time high of $313 in July 2019, before retracing lower to trade at circa $265 in October 2019, with a market capitalisation of $130 billion.

Adobe Dividends

Adobe started paying quarterly dividends in 1989 when it paid out $0.04 per share. The dividend amount rose to a high of $0.1 per share by 1993, before shrinking to a mere $0.0125 by 2005, when Adobe stopped paying cash dividends altogether.

Part of the reason the giant software developer did away with dividend payouts was the associated administrative cost and effort of the process, as well as the need to explore growth opportunities using any available free cash flow. While dividends account for part of the overall capital gains for an investor, the lack of it does not imply a bad stock.

Non-dividend paying companies typically utilise the free cash flow to fund aggressive growth opportunities and reduce debt. This leads to significant growth in stock valuations over time, compared to dividend-paying companies. In Adobe’s case, the stock was trading at circa $30 when the company stopped paying dividends, and the company printed its all-time stock high at a price that was almost tenfold by October 2019.

Trading Adobe Stock

Adobe has been a Wall Street favourite for years now because of its seemingly eternal growth. Still, you should consider the following when trading the stock:

Competitor’s Performance

Adobe faces different types of competition in its various operating segments. It has dominated the graphic and creative design scene, but in all its different operating business segments, it faces different types of competitors such as Corel, Foxit, Google, Microsoft, Oracle and CyberLink, among others. It is important to track the performance of these companies in the specific niche markets that Adobe operates in.

New Product/Services Rollout

Adobe’s ascendancy to the top is courtesy to important new product launches in its history, such as PostScript, PDF and Photoshop. With the company now operating in more niche areas, it is important to watch out for new products or service rollouts. New Adobe ground-breaking products are capable of triggering huge price advances on the stock. But if investors perceive the product negatively or a competitor beats the company on such a launch, the stock may receive massive headwinds.

Periodical Earnings Reports

The Adobe fiscal year runs from December to November, and the company releases quarterly earnings reports for investors to assess the health of the business. The most important figures to look out for are sales growth, operating margin and cash flow. In February 2019, the company made a transition from offering one-time licenses to charging periodic subscription fees. This has predictably had a positive impact on its revenues, but it also increased some associated costs of managing a high subscriber base.

Lawsuits and Public Protests

Although primarily a software company, Adobe serves the global market, and it is poised to encounter some legal or public protests that may have an impact on its stock price. Recent incidents that Adobe has had to deal with include an ‘unfair pricing’ petition that was published and signed by 10,000 European customers in 2013, who were paying more than $1,000 more for services compared to their US counterparts, and a 2011 anti-trust lawsuit by a group of 5,000 Freehand graphic designers.

Disclaimer: This is a general analysis and not to be viewed or construed as actual trading advice or a recommendation of any kind and just an example of how a particular instrument could, potentially, be traded.

Why Trade Adobe on the Friedberg Direct MT5 Platform

Adobe stock is available for trading on the advanced Friedberg Direct MT5 trading platform. Here is why you should consider trading Adobe and other financial assets on MetaTrader 5:

• Wide Choice of Assets
  MetaTrader 5 was specifically designed to accommodate multiple financial asset types. On the Friedberg Direct MT5 platform, you can trade a wide choice of assets, including forex pairs such as the USDJPY; stocks such as Adobe; commodities such as gold and crude oil; Indices such as the Dow Jones, and bonds.

• Multiple Order Types Available
  There are multiple assets available to trade on Friedberg Direct’s MT5, but there are also flexible order types that ensure you speculate on the prices of your favourite assets in innovative ways to limit your trading costs and protect your profits. Apart from buy/sell market orders, you can trade in the following 6 pending order types: buy stop, sell stop, buy limit, sell limit, buy stop limit and sell stop limit.

• Comprehensive and Effective Analysis Tools
  Performing price analysis of your selected assets is the basis of identifying lucrative trade opportunities in the market. There are numerous trading tools and resources available directly from the Friedberg Direct trading platform, which help traders to significantly enhance their technical and fundamental analyses. Technical analysts can add unlimited charts on their trading areas, and take advantage of 21 timeframes, 38 technical indicators as well as 44 graphical objects. On their part, fundamental analysts will enjoy the integration of a Financial News widget that streams relevant economic news from top sites as well as the Economic Calendar that aids in tracking major economic and political events that are likely to impact the price movements of various financial assets.

• Trading Strategies – Hedging and Netting Permitted
  Both hedging and netting are allowed on the Friedberg Direct MT5 platform. Hedging allows traders to control their risks by opening multiple opposite trade positions on the same asset, such as opening both buy and sell trades on Adobe. Netting allows only one trade position on an individual asset, with subsequent trades allowed only when increasing the trade, decreasing it, exiting it or closing it out. With such versatility, MT5 traders can stay on top of their risks at any given time during their trading activities.

• The Benefits of Leveraged Trading
  Adobe can be traded on the Friedberg Direct MT5 platform with a leverage of up to . On other asset classes, such as forex pairs, Friedberg Direct offers leverage of up to .
• Advanced Trading Solutions Available
  MT5 harmonised its algorithmic components, which can be accessed on its integrated development environment MQL5 IDE. MQL5 IDE features the MQL5 programming language supported on MT5. There are also other effective trading tools available on MT5; MetaEditor is available for editing trading strategies, scripts and other resources; a multithreaded Strategy Tester; as well as the MQL5 community where you can access a comprehensive knowledge base as well as freelance MT5 programmers and other handy resources.

Open an Friedberg Direct account and start trading Adobe stock CFDs Today!