Much of the time, we at TMO finds ourselves in the position of bringing you the latest comments from analysts, both in the numbers game and on Wall Street, or some other pundit, who just doesnit get Apple. At other times, we are privileged to bring word of someone who does understand the company. Today is once such day.
A Reuters report about an investment fund, the Al Frank Fund, that is taking a contrarian position includes some comments about Appleis stock that are not from deep left field. The fundis manager, John Buckingham, likes to buy stocks that people are selling, and sell stocks that others are buying. From the report:
"Generally speaking our experience is that the herd is often wrong," Buckingham said in a recent interview. He believes that buying when everyone else is selling and selling when others are buying is a good way to make money in the stock market.
"Apple Computer is an example of a company with a great balance sheet," Buckingham said. "It has $12 a share in cash and no debt." Buying the stock in the mid-teens where it has been trading recently offers the potential to double or triple your money, Buckingham argued.
"This is an example of a company that has been counted out numerous times and they always seem to bounce back," he said.
In contrast, Charles Schwab recently gave Appleis stock a "F," on a scale of A-F, citing such things as the stock trading at an above-average multiple, management issuing shares, and what it says is the "difference between operating cash flow and reported net income." The Al Frank Fund, however, appears to be including such relevant issues as cash on hand, which makes moot many issues involved in the stockis multiple, and the companyis lack of debt.
Similarly, Robert Enderle of the Giga Information Group recently said that Appleis product line was heading towards obsolescence (see the Apple Death Knell Counter project for similar pronouncements from analysts through the years). Mr. Buckingham notes that despite such constant pronouncements, Apple always bounces back.