The portfolio manager broke down his bullish Apple Inc. (NASDAQ:AAPL) thesis into multiple phases, which include:
Additionally, Haverty mentions the "financial characteristics," which include stellar margins, high ROI, and "not a lot of capital intensity," at "half the multiple of Coca-Cola."
"One: it's the world's best retailer. If you had the ability to get at their retail profitability, it would be better than anyone else on the planet. The second thing is: it gets recurring revenue from the iPhone and the Apps on the iPad. The third thing is: it makes these devices [...] it's not really a consumer durable, it's a consumer semi-durable."
Perhaps most importantly, Haverty discusses the prospects of Apple Inc. (NASDAQ:AAPL)'s decision not to place more of its cash flow into shareholders' pockets, which he describes as "irresponsible" management. Here are his thoughts:
"The reality is right now, Apple could [...] finance in the bond market at 1% and pay the interest and bring the cash over and give it to the shareholders. They could also finance at 1% and buy the stock and get a 16% return [...] They'd flunk a finance class in any business school."
To conclude, Haverty says that "it's time the directors, I think, changed the playbook in terms of the cash management," adding that "if they ever did that, I think the stock could be very close to a trillion dollars in value very, very quickly."
Let us know your thoughts in the comments section below, and for more Apple Inc. (NASDAQ:AAPL) coverage, continue reading here:
Disclosure: I have no positions in any of the stocks mentioned above