Why are Google Inc (GOOG), Baidu.com, Inc. (ADR) (BIDU) and Apple Inc. (AAPL) Good Buys?

Apple Hidden Value Might be Unlocked Soon

Apple is also a technology giant that is famous for its huge cash hoard. With a total market cap of $421.6 billion, $137 billion cash on hand represented as high as 32.5% of Apple’s total market cap. Recently, David Einhorn has proposed a creative preferred stock distribution idea to effectively use Apple’s large amount of cash. He thought that Apple could issue around $500 billion in face value of preferred stock, paying 4% at no cost to existing shareholders. Just by doing that, Apple could unlock its potential value in its huge cash balance. As a result, Apple would be worth around $847 per share, an upside potential of more than 88.6%. Among the three, Apple seems to be the cheapest. At the current trading price of $449 per share, Apple is valued at only 6.34x EV/EBITDA.

My Foolish Take

Google, Apple and Baidu all seem to be good buys at their current prices with their own investment theses. Google is the most innovative company with great management and its global leading search engine. Baidu is a dominant search company in China, the world’s biggest market. Apple, with the lowest EV multiple and a huge cash balance, could be considered a value pick for now.

The article Why are Google, Baidu and Apple Good Buys? originally appeared on Fool.com and is written by Anh Hoang.

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