This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Apple Doesn't Suck -- but Its Stock Does

BALTIMORE (Stockpickr) -- If you've been following shares of Apple (AAPL) for the last several months, you know the story. This stock has gotten absolutely shellacked lately.

In the last six months alone, AAPL has dropped more than 25%, no small move for a $430 billion company.

>>4 Reasons to Buy Stocks in 2013

Recently, TheStreet's Rocco Pendola wrote an article with the headline "All of a Sudden, Apple 'Sucks.'" Well, he got that half right anyway.

Apple doesn't suck. Its stock does.

I realize that may sound like a ridiculous thing to say. But think about what it means for a second, and there's something to it. In fact, it could fuel some serious gains in your portfolio -- if only you're willing to give Mr. Market's most conspicuous fallen angel a second look.

>>5 Stocks Hedge Funds Love -- and So Should You

What Doesn't 'Suck' About Apple

To do that, we've got to take a look at what doesn't suck with Apple.

In a word, it's fundamentals.

Let's be clear, though. When I'm talking about Apple's fundamentals, I'm not talking about the stuff that the analysts are debating right now. I'm not looking at whether Apple still has "it" after Steve Jobs' departure, whether the firm's suppliers are quietly cutting production or whether the new not-so-super-secret Apple television will be a slam dunk for the firm.

I'm talking about simple, old-school valuation metrics. And the story is so clear it's mind-boggling.

The most obvious thing is cash. Apple has lots of it -- around $137 billion in cash and investments at last count. Just for comparison, that's more or less the GDP of Hungary. That's so much cash that Tim Cook could decide to buy BlackBerry (BBRY) on a whim, burn the company to the ground and destroy less shareholder value than Monday's decline did.

And he'd still have another $128 billion left in the company coffers.

It's probably not surprising that Apple has no debt. None.

>>5 Rocket Stocks to Buy in February

There are a couple of caveats to Apple's cash position. First, only around $43 billion of it is located here in the U.S. That means that the firm would have to hand over a big chunk to Uncle Sam if it wanted to repatriate the balance. Yes, I said "only." Where the rubber hits the road for investors, the bottom line is that Apple can still use its foreign cash for actions that directly add value for anyone who owns the stock (think shareholder yield).

Stock quotes in this article: AAPL 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs