Halfpoint
Summary
- Apple appears to be one of the best companies of all time, and a classic Phil Fisher investment, considering both quantitative and qualitative factors.
- Currently, the company is trading at a premium to our estimated fair value of $2 trillion, though as it is a superior business it may deserve it.
- Apple is unmatched relative to its technology peers, shoveling nearly all of its free cash flow into buybacks and dividends and having a manageable amount of stock-based compensation.
- Conservative investors may want to wait until a better buying opportunity presents itself, though this may never occur.
Introduction and Executive Thesis
At this point, it’s no secret that Apple (NASDAQ:AAPL) is a superior company. Berkshire Hathaway’s (BRK.A)(BRK.B) Warren Buffett is pretty open about his love for the business, saying the following:
If you’re an Apple user and somebody offers you $10,000, with the only provision [that] they’ll take away your iPhone and you’ll never be able to buy another, you’re not going to take it.
As BRK appears to continue to add to their position as Apple approaches the $3 trillion dollar mark, individual investors may wonder if buying AAPL stock is worthwhile for someone who does not have 100s of billions of dollars in assets under management. I wanted to take a closer look to find out.
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