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What If Apple Inc. (AAPL) Followed Warren Buffett’s Advice?

But a quick overview of Apple Inc. (NASDAQ:AAPL), Intel, and IBM’s respective markets reveals far greater growth opportunities for Apple Inc. (NASDAQ:AAPL) than for both Intel and IBM. Intel and IBM have three-year revenue growth rate averages of 12.8% and 1.6%, respectively. Compare this to Apple Inc. (NASDAQ:AAPL)’s three-year average revenue growth rate of 51.9%.

Even more telling, analysts estimate Intel’s and IBM’s revenues to increase by a paltry 1.4% and 1.7%, respectively, during the fiscal year ending December 2013. Meanwhile, they forecast Apple Inc. (NASDAQ:AAPL)’s revenue to increase 16.7% during the company’s fiscal year ending September 2013.

Last but not least, the bulk of Apple Inc. (NASDAQ:AAPL)’s profits is positioned squarely in the center of an anticipated smartphone and tablet explosion. A report from ABI Research predicts smartphone sales to grow by 44% — and tablet sales to grow by 125%! — in 2013.

Apple Inc. (NASDAQ:AAPL)’s a prime candidate for a share buyback
No wonder Buffett encouraged Apple Inc. (NASDAQ:AAPL) to scoop up its own shares. A purchase near Apple Inc. (NASDAQ:AAPL)’s super-conservative 52-week low would meet both of Buffett’s requirements for a well-executed buyback.

Could a more aggressive share repurchase program result from the “active discussions about returning additional cash to shareholders” Apple Inc. (NASDAQ:AAPL) referred to in its Feb. 7 statement? Maybe.

But no matter what Apple Inc. (NASDAQ:AAPL) does with its cash, the company trades at such a conservative valuation that almost any method of returning cash to shareholders would likely impact shares positively.

The article What If Apple Followed Warren Buffett’s Advice? originally appeared on Fool.com.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Apple, Berkshire Hathaway, and Intel. The Motley Fool owns shares of Apple, Berkshire Hathaway, Intel, and International Business Machines (NYSE:IBM)..

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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