What If Apple Inc. (AAPL) Traded Like One of These Companies?

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IBM does a better job of pumping its stock price up as the company keeps repurchasing its shares, which brings the EPS up every quarter even when the actual profits might be flat. As PC sales go down significantly year over year, Microsoft will have to gain a significant amount of market share in the smartphone and tablet market in order to make up for the revenue loss in the PC market. So far, Microsoft hasn’t accomplished this task.

Of these companies, Apple has the healthiest balance sheet and the biggest opportunity for  future growth. Furthermore, Apple’s brand name is more valuable than most, if not all of these companies. Moreover, Apple’s lack of debt is very valuable when compared to the high debt levels of some of these companies.

Many people are currently expecting a correction in the market. These people also expect money to flow to gold and bonds if the correction actually materializes. I believe that the money will flow to beaten down stocks like Apple if a correction happens. There is absolutely no reason for Apple to trade for such a low valuation at a time when market is trading near or at all-time high.

If a sell-off starts, it will start with the overvalued stocks towards the undervalued stocks. Apple will play a major defensive role in many people’s portfolios as it is already beaten down badly, and all the bad things that could possibly happen to the company (except for a meteor attack on its headquarters) are already priced in by now.

Apple still generates cash like a bank, it still enjoys tremendous costumer loyalty, and it is still “cool.” Just because investors have punished Apple’s stock doesn’t mean that Apple is performing bad as a company.

Many people think that Apple needs to invent new products out of thin air to stay relevant, but this is not the case. Apple just needs to build products and offer services that are a little better than the competition. Tim Cook is the person to make sure it happens. Besides, Apple still has a lot of tricks it can use to increase its share price, such as hiking up the dividend rate or buying back shares.

In conclusion, Apple is one of the most undervalued companies in the market because it is somewhat decoupled from its stock. Once the fundamentals and technicals get together again, Apple will continue to enjoy the party it enjoyed between 2004 and 2012.

The article What If Apple Traded Like One of These Companies? originally appeared on Fool.com and is written by Jacob Steinberg.

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