Unbeaten Horse of Race : Apple Inc

Apple Inc
When we compare industry giants in terms of raw cash numbers ( including cash equivalents and short term marketable securities ), Apple was lying at No 6. but when we look at closely, it reveal Apple Inc as an unbeaten horse in a long term race.

Apple Inc has raw cash only $29 billion and above it General Electric with $127 billion, Microsoft with $50 billion,Cisco, $40 billion; Berkshire Hathaway, $38.8 billion; and Google, $36.6 billion.but once you include debt, General Electric and Berkshire is out and reduce cash numbers of Microsoft and Cisco.  After all Google and Apple left in the race.

Now when you add $35.6 billion long term marketable securities in debt free Apple Inc which is almost equivalent to Google's cash numbers, it makes Apple Inc with $65 billion of cash numbers easily topping the Google Inc.

According to analyst Jon Fortt, Apple Inc is on its way to generate $100 billion in cash by the end of the next fiscal year.

And don’t stumble over the “long-term” part of the equation. According to Apple’s 10-Q, long-term has maturities one to five years. While this isn’t the normal definition of “liquid” cash, it’s still cash, especially based on the components: US Treasurys, U.S. agency securities, non-US government securities, CDs, munis and the biggest component — corporate securities.

The company doesn’t disclose further detail, but no matter how it is counted and invested, Apple’s cash is growing fast, up more than $6 billion alone in the last quarter, sequentially. Most of that growth is on the long-term side, which over the past year has roughly doubled.

Asymco recently had a piece that suggested Apple’s cash could keep operations going until 2018 if revenue streams stopped completely.

Based on the total cash, some analysts believe Apple is woefully undervalued.

But others believe that the valuation argument, at this point in the company’s cycle, is futile and somewhat meaningless. All that matters is that sales and earnings keep going higher.

Longtime Apple bull Gene Munster of Piper Jaffray recently told clients in a note: “We believe investors have grown tired of the valuation argument, given the monster numbers Apple reports only creates a higher bar for the out year growth rates. Even if the multiple remains depressed, we expect shares of AAPL to move higher driven by earnings growth.”

He added in a note to me: “The reason why most analysts don’t factor the cash into Apple’s valuation is the company has not done anything with the cash, and the theme I keep hearing is ‘don’t give them credit for the cash because we will never see it’.”

At least they haven’t yet gone out and blown it on something stupid. Restraint, especially for a company that is firing on all cylinders, is sometimes a good thing.

(Source: CNBC )
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