NEW YORK (TheStreet) -- For several years, investors bought Apple (AAPL) shares for the growth prospect while I liked the numbers from a value point of view. Many rightly justified the purchases with explanations of removing the cash to calculate the true price to earnings ratio (rarely a smart idea without discounting the cash.)
During the last six months, I witnessed a shift from a growth thesis to a more investment thesis. I found it fascinating, because the more I read that Apple was a great value play, the more I started to think of it as a growth stock. It's almost as if many of the long bias followers and I are 180 degrees out of phase. On the other hand, you have the short thesis. According to the shorts, Apple is done, and the only thing left to do is sell out of Apple and buy Research In Motion ( BBBY) or Nokia ( NOK). Often the gurus in the short bias group will point out that they think Apple faces shrinking margins and that Google's ( GOOG) Android based phones are gaining market share. To be fair, Apple may actually come under margin pressure, although last quarter is not a good example of it. Last quarter, Apple introduced several new products, and as someone who spent years manufacturing and importing products, I know the first quarter or two are the toughest ones from a profit perspective. If Apple launched as many products as they did without a margin hit, they unquestionably would be able to walk on water. Apple can't walk on water, but then again, they don't need to. Apple doesn't have a margin problem and if margins do shrink they still don't probably have a margin problem. Where else are you going to get a large tech company with Apple's margins? I will save you the trouble; you're not going to find another company with the wide margins Apple enjoys.
AAPL Profit Margin TTM data by YCharts
I don't believe it's a fair comparison to include Dell but I wanted to demonstrate how far one must reach to find another tech company with a P/E less cash metric cheaper than Apple. It's not fair because Apple's total size is more than 10 times greater than Dell. What do I believe is in store for Apple? I believe Apple, one of the most talked about companies in the world, is about to become "discovered again" before the end of 2013. Apple will use its war chest of cash and buy shares, and buy a lot. That will just get the engine running.