Wall Street Journal Calls Apple A "Safe" Investment

by , 12:00 PM EST, March 29th, 2001

The Wall Street Journal is again talking about Apple in a favorable light. The financial publication has published an article by Pui-Wing Tam that calls Apple a "safe" investment. Earlier this month, the newspaper published a column from Walt Mossberg and a news report that praised Apple and OS X. Today's report cites Apple's cash position, the fact that the company has not warned for the current quarter (unlike other box makers), and the installed user base of 24 million Mac users as reasons for Apple having been transformed into a safe stock. According to the article:

For the time being, at least, the polish on Apple's shares stems -- yes, indeed -- from their relative safeness. "I can sleep at night owning this stock," says Dipak Patel, a portfolio manager at Cumberland Associates LLC in New York, who specializes in "value" investing, the stock-market equivalent of bargain shopping. He says he began buying shares of the personal-computer maker in January, when the stock was at around $18. The stock now forms one of the firm's largest positions.

"We saw the slump earlier than most, and now we seem to be further along" in getting out of it, said Steve Jobs, Apple's co-founder and chief executive, in an interview last week. He noted that the company is in its quiet period ahead of the release of its quarterly financial results, which is scheduled for April 18.

The stock is attracting the likes of Mr. Patel, investors focused more on valuation than the rapid growth in earnings or revenue sought by so-called momentum investors. "The ownership of the stock has completely turned around," says Charlie Wolf, an analyst at New York brokerage house Needham & Co.

Cumberland's Mr. Patel notes that Apple has a loyal base of about 24 million consumers. "As long as the company keeps these customers happy with new products, the stock will work," he says.

There is much more that we did not quote, and we recommend the article as a very good read. Apple's stock is trading higher by one point at 23.17 (+4.51%) as of this writing.

The Mac Observer Spin:

WSJ Article: Value Investors Start to Go Apple (Computer) Picking