But with the spotlight on its cash pile, Apple said last week that it would look at ways to return cash to shareholders. The shares promptly rose by 3%. The bottom line is that there is value in Apple’s balance sheet that the market is currently discounting.
Value or growth?
Greenhill Capital is a value-driven hedge fund with $6 billion under management. That’s a different league from Warren Buffett‘s $75 billion, but there’s one similarity: Greenlight’s performance has been impressive, with a nearly 20% per annum return to investors since its foundation in 1996. It’s one of Apple’s top 100 shareholders, and Apple is its biggest single holding.
That this pressure is coming from a value investor speaks volumes about how Apple’s business has matured. To such investors, the core value in the company lies in the “ecosystem” of integrated technology that has a loyal fan base.
But other investors put more weight on Apple’s ability to innovate and disrupt existing technologies. That’s what powered its share price up from $3.28 to $700 between 2003 and 2012. It won’t repeat that achievement, but concepts such as Apple TV, or wearable technology — the Apple smart watch — could see the company enjoy another growth spurt.
Innovation and the ability to adapt to disruption are common characteristics of growth companies. The Motley Fool has picked out one such company as its top growth share for 2013. The industry that this company operates in has been turned upside down by the Internet, but it has adapted to the digital age so well that it’s thriving and paying increasing dividends.
The article Cash Windfall for Apple Shareholders? originally appeared on Fool.com and is written by Tony Reading.
Fool contributor Tony Reading has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple.
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