by winston » Thu Aug 17, 2017 2:45 pm
not vested
Cash-Rich Stocks to Buy: Apple (AAPL)
Cash and short-term investments: $262 billion
To be honest, I’m personally still a bit skeptical of Apple Inc. (NASDAQ:AAPL), particularly with it trading near an all-time high.
The company remains heavily reliant on the iPhone, despite efforts to grow the rest of the business. And I worry that reliance will cause profits to decline at some point in the not-too-distant future.
But for investors who value strong balance sheets, it’s tough to find a better stock in the market. Apple has a stunning $262 billion in cash and investments, and net cash and investments of about $165 billion.
And it seems increasingly likely at some point that Apple will use that cash for a large acquisition, most likely in its Services business.
One thing that’s certainly in the offing is a $1 billion push into original content, according to reports out today, that will pit it against the likes of Netflix, Inc. (NASDAQ:NFLX) and Hulu.
Apple has been a speculated buyer of companies ranging from Walt Disney Co (NYSE:DIS) to the aforementioned Netflix, but hasn’t yet pulled the trigger on a big deal. (Its largest acquisition so far was the $3 billion purchase of Beats Music in 2014.)
But a big M&A play likely is coming soon, given CEO Tim Cook’s announced target of doubling services revenue to roughly $50 billion in four years.
Apple isn’t quite capable of creating that growth on its own. It likely will have to spend some of the cash — and very well could wind up spending big.
Source: Investor Place
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