APPLE STOCK - LONG TERM ANALYSIS - WHY IS BUFFETT BUYING?
Channel: Value Investing with Sven Carlin, Ph.D.
Date: 2018-02-27

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Apple (NASDAQ: AAPL) is one of the most discussed stocks out there so there is no point in going into a detailed analysis. Where I think I can add value is by discussing AAPL from a long term perspective, one many fail to see, and which could be the reason Buffett has made AAPL his largest portfolio holding. 

If you go through AAPL's conference call you will see how almost all of the analysts covering the stock focus on short term issues like the iPhone cycle, the capital structure etc. The consequently insert what they see has changed into their models and estimate AAPL's target price. 

However, I don't think Buffett is concerned whether the new HomePod will show stellar sales or not. He is more concerned about things like moats, return on invested capital, cash available to shareholders, the efficiency of buybacks and the capacity AAPL has to generate strong cash flows in the future. Of course, the strong current earnings and cash flows help but there is so much more to AAPL. I finish my video with an ecosystem comparison where I compare AAPL to Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), Alphabet (NASDAQ: GOOG) and Netflix (NASDAQ: NFLX) which shows how undervalued AAPL actually is which may be the main reason why Buffett is buying. Enjoy the video and I am looking forward to your comments!