I normally don’t recommend tech stocks to investors. I have found them to be too volatile for a value investor like me. However in the case of Apple (AAPL) and its recent fall from grace I am making a big exception. I think the analysts who monitor Apple are dead wrong in giving it a sell rating. The stock price has dropped from $700 a share to (as I write this article) $444.76 a share. Why has this happened? Because the analysts feel without Steve Jobs (Apple’s creative genius) the company has nowhere to go but down as more and more i-phone knockoffs hit the marketplace thereby shrinking Apple’s margins.
I disagree, I’m pretty sure the current management team at Apple knows they must maintain the innovative edge they have had over the past decade. I’m also pretty sure that with the $137 billion in cash and marketable securities Apple has at its disposal they will be able to maintain their innovation advantage.
Here are some key statistics to help support my opinion:
PE Ratio 10.07
Return on Assets 20.58%
Return on Equity 38.41%
Profit Margin 25.35%
Free Cash Flow 34.38 Billion
Dividend Yield 2.30%