jerryguru69 (93.22)

why I finally bought AAPL (for my real portfolio)

January 18, 2013 – Comments (3) | RELATED TICKERS: AAPL , BRK-B

I had always avoided AAPL like the plague, since it is a glamor stock: the price is determined by headlines, rumor, gossip, and cocktail party chit-chat. It is randomly in and out of fashion depending on the whim of the jet set or analysts.

Then, something interesting happened: I was using the very Foolish Stock Screener, and suddenly a miracle: Steve Job's lifework kept popping up. Judged by traditional measures, it stands up rather well: P/E, PEG, market cap, even a modest dividend yield.

From my perspective, most of what I read about AAPL (and, sadly, this includes multiple daily TMF articles) is simply noise: this or that idevice gaining/losing market share, ecosystems and various apps, refresh cycles, screen sizes/OLED/Retina, supply chains, multi-core CPU chips, Samsung/Android, patent wars, and so forth.

From a traditional perspective, this company stands up rather well:

--well run by a top notch management team

--quality products that people like and command a premium price

--loyal customers

--very rich profit margins

--forward outlook unlikely to be caught flat-footed

--robust financials

--a pile of money bigger than many central banks with little debt

In the end, I expect this to be a permanent core holding in my portfolio, not unlike BRK-B that I do not have to constantly fret over. Note carefully that nowhere does my analysis mention stock price or 52 week high/lows.