Apple stock: A wide moat and limited downside

“For my investing purposes, going long Apple Inc. is not a question of revenue growth, iPhone models, or units shipped, rather it’s a question of margin of safety,” Nathan Hamilton writes for Seeking Alpha.

“We all know the company will grow, but how much reward can I get for the potential risk? Well, the answer to that question is the reward far outweighs the potential downside risk,” Hamilton writes. “Apple is the rare case where it has a wide moat and limited downside in the next years. I am taking a very conservative approach when determining the downside potential, thus factoring in outlier scenarios.”

Hamilton writes, “Look around and I’ll challenge you to find a company that has a similarly wide moat, even after three years of tremendous compounded growth.”

Read more in the full article here.

9 Comments

  1. I’ve never heard of the moat analogy but I do know that AAPL is different than most companies when it comes to investing. It’s like the company of your dreams, making incredible products with fantastic cutting edge software and reaping HUGE profits with broad operating efficiencies because of the talented management group that Steve Jobs put together. AAPL investors will continue to reap the benefits of this synergy.

  2. This may be true, but pursue any stock with caution, since markets are affected not just by the company of interest, but also by external factors (Greece, US Employment rates, Euro, etc. etc.)

  3. Apple’s Market Cap rose about $32billion in the last 5 days of July. Their Revenue for the quarter, 90days, was $35billion. Talk about Nonsense. Their stock price will fall soon. Them giving out dividends is probably proof of that since dividends are paid to each stock that is carried. Make sense? So essentially the stock price can go ANYWHERE. even down.

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