This Day On The Street
Continue to site
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

Apple Doesn't Suck -- but Its Stock Does

BALTIMORE ( Stockpickr) -- If you've been following shares of Apple (AAPL - Get Report) 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).
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs