Would Warren Buffett Ever Buy Apple Inc. (AAPL)?

Page 1 of 2

In the following video, Fool senior technology analyst Eric Bleeker looks at a question that could seem ludicrous given Berkshire Hathaway‘s traditional aversion to technology: Would Warren Buffett ever buy Apple Inc. (NASDAQ:AAPL)?

In spite of Buffett’s long stance that technology is either too complicated or lacks the right long-term competitive advantages for his investing style, recent evidence points to his having more interest in the space than he lets on.

Apple Inc. (NASDAQ:AAPL)For example, Berkshire took a position in Intel Corporation (NASDAQ:INTC) back in 2011. The deal was small enough that it was almost assuredly from potential Buffett successor Todd Combs. Also, in a surprising move that eschewed its traditional long-term focus, Berkshire sold the position within a year’s time for healthy gains. Yet the fact that Berkshire would invest in something that competes on the most cutting edge of technology — the non-stop march of semiconductor technologies — was intriguing.

Much larger than Intel was Buffett’s buy of International Business Machines Corp (NYSE:IBM). It’s a company that’s as blue-chip as they come in technology and has a tremendous model that increasingly layers software and services on top its hardware portfolio, yet there’s no denying it competes in some very fast-moving and advanced markets. IBM isn’t a small bet, either. It’s Buffett’s third largest public holding. The $14 billion Berkshire owns in IBM is only slightly smaller than its fabled The Coca-Cola Company (NYSE:KO) holding.

Finally we come to Buffett and right-hand man Charlie Munger’s description of Google Inc. (NASDAQ:GOOG) back in March 2009:

“Google has a huge new moat. In fact I’ve probably never seen such a wide moat,” said Munger. “I don’t know how to take [the moat] away from them,” said Buffett.” “Their moat is filled with sharks!” Munger added.

Google Inc. (NASDAQ:GOOG) does have a fabulous competitive position, yet even with Buffett’s willingness to invest in great companies at fair prices, its current P/E of 26 is probably a bit too steep to see the Oracle sniffing around Google Inc. (NASDAQ:GOOG)’s shares.

So we have ample evidence that Buffett could very well be overly modest and cagey in his deference to technology investing. With Apple Inc. (NASDAQ:AAPL) now within a modest one-day drop away from being in the 5% cheapest companies in the S&P 500, could Apple Inc. (NASDAQ:AAPL) possibly be a stock on Buffett’s radar?

As Eric notes, it has some qualities Buffett likes. Its $137 billion in cash is beyond a fortress-like balance sheet, the company has a tremendous global brand, and its cash flow continues to outpace earnings growth. Buffett’s statements on CNBC last week also showed he doesn’t find the company terribly expensive, suggesting Tim Cook use the company’s cash to rebuy shares.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!