By INVESTMENTU - 5 years ago
This 33-year-old company dominates the consumer market spaces it competes in… has no debt… and is sitting on a cash pile of over $25 billion. In the face of the current recession it continues to do well - unlike many of its competitors.
Back in 1982, you could have purchased 100 shares of this company’s stock for $160. Those same 100 shares would be worth roughly $92,000 dollars at today’s split-adjusted share prices.
That’s a 57,400% return, something most people won’t ever see in a lifetime of investing.
Fortunately for us, this company’s prospects are only looking brighter. In fact, it has plenty of space to grow and do it all over again. And it won’t matter whether you’ve been there from the beginning or jumping into the bandwagon today - the ride looks to be profitable nonetheless.
Let me show you a few reasons why this stock belongs in everyone’s portfolio…
Ignoring Competitors and Analysts
Today, its bewildered competitors plod along, introducing ho-hum, cheap, “me-too” products in a vain attempt to undercut its expensive prices and its ever-increasing market share.
Most of these attempts are pitifully ineffective. Regardless, this company just ignores them. Always executing from a tower of strength, it defines and controls the markets it operates in, rewriting the rules for the other players.
In addition, it creates new markets where none existed before… paradigm-shifting consumers’ lives and thought processes.
The company’s uniquely distinctive advertising and its incredibly thoughtful, aesthetic product designs give it a unique position in the consumer electronics industry. One that it’s not likely to give up anytime soon, if ever.
Numerous analysts have predicted the company’s demise over the years, saying its products are too expensive and won’t sell well in recessionary environments, that it’s a “one man show.”
The company’s response? It ignores the analysts, too. Because they just don’t get it.
You see, it has something that most analysts don’t possess and never seem to be able to put a proper value on:
>> In addition, it creates new markets where none existed before… paradigm-shifting consumers’ lives and thought processes.
I can say with confidence that this justifies 6x sales; 8x book; 44x earnings. AAPL clearly has 100% upside potential.
I just need some help to see why:
BNI sales are worth 65% less than AAPL sales.
HPQ assets are worth 50% less than AAPL assets.
JNJ earnings are worth 50% less than AAPL earnings.
These companies also dominate their businesses. It is not hard to imagine they have a fair chance of doing so in 2015 as well. They may even be able to shift paradigms by then.
I wouldn't be surprised if you find some fool willing to pay $ 200 within a year. That is why I don't short.
A business with excellent products that everyone knows and is willing to pay a premium share price for. Where is the margin of safety?
"Whenever the company sells an iPhone, it only books about 10% of the money it receives as revenue, and defers the rest.
It then books this annually over a period of 10 years."
I'm pretty sure this is not accurate.
And when Apple grows 57,400% from its current $120 share price, what percentage of the US's GDP will it occupy? 99%? How many other companies will continue to trade on stock exchanges at that time?