“I allow only one deviation from my focused deep-value contrarian investment strategy,” Achilles Research writes for Seeking Alpha. “And that deviation is called Apple.”
“Apple remains the one and only ‘true’ growth investment in my portfolio of contrarian equity bets. Inconsistency? Hardly,” Achilles Research writes. “While Apple clearly is the best example of a convincing growth story, the company also displays all the characteristics of an undervalued quality company: Apple drives innovation in the consumer electronics industry, sets new design standards, drives a hugely successful differentiation strategy leading to premium prices for its products, creates significant brand equity value, has a pile of cash on its balance sheet that is higher than the tower of Babel and conducts opportunistic and substantial share repurchases. At the same time, Apple trades at only 11 times forward earnings and approximately 9 times estimated 2014 free cash flow to equity.”
“Given the hype about Apple’s tech products, strong free cash flow growth and a treasure trove full of cash to fund a massive share repurchase program, I think Apple is seriously undervalued,” Achilles Research writes. “I also like to remind readers that Apple traded at $700 just one and a half years ago indicating that the market already identified Apple’s outstanding growth potential.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]