“The company’s strong—and rising—free cash flow and its operating margin, which has surged over the last 20 years and stayed at historically high levels, indicate that Apple has turned into a cash-producing machine investors should not ignore,” Foster writes. “Ironically, many people don’t see Apple as a cash machine when they buy or sell the stock; instead, they obsess over iPhone and iPad sales. This leads to a panic when these sales are weak and euphoria when they’re strong.”
“But this short-termism is destined to lose because buying and holding Apple will mean collecting a dividend that will grow faster than those of supposedly ‘safer’ and more boring stocks like General Electric, AT&T, Johnson & Johnson, Chevron, Consolidated Edison and Exxon Mobil,” Foster writes. “Yet Apple is the cheapest stock among this group when we look at its price-to-earnings (P/E) ratio.”
Read more in the full article here.
MacDailyNews Take: As Jim Cramer says of AAPL, “Own it, don’t trade it.”