In this video, Austin Smith explains three reasons to own Apple:
The iPhone is a cash cow. While consumers may pay $200 for an iPhone, Apple receives far more than that through subsidies paid by carriers such as AT&T,Verizon, and Sprint Nextel.
The company sells at a substantial discount and is growing faster than most S & P 500 companies. The stock sells at 10 times earnings, but Apple still sits on almost $137 billion in cash and recently announced a $16 billion share buyback program.
Apple continues to expand the integration of its products, which makes its moat broader and deeper. People who buy an iPhone are more likely to buy an iPad and sync the devices than buy a Surface and have the two operate separately.
Apple stock took its lumps this past year, but Austin argues that for the long haul, it looks like a great buy at these prices.
For more details, check out the video.
There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article 3 Reasons to Buy Apple originally appeared on Fool.com.
Austin Smith owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.