Apple’s Ultimate Superpower Is Cash Flow

Summary:

  • Over ten years, Apple’s operating and levered free cash flow have increased by over 100%.
  • Over the same period, substantial cash flow has been plowed into share buybacks and debt reduction such that cash flows/shares have increased over 200%.
  • Apple is currently trading near its 52-week high and 18% above its 5Yr average PE within a broader gloomy market and economic outlook.
  • I would not, however, advise any investor to sell a winning position in a company like Apple without first considering managing portfolio risk more broadly.

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Introduction

Investors and consumers alike love Apple Inc. (NASDAQ:AAPL). Consumers can be a strange bunch but most investors are easier to understand; I suspect what most investors love most about Apple are its market-crushing historic returns.

Total Return

Apple Historic Returns

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Apple annual cash flow

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AAPL net debt

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AAPL cash flow/share

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AAPL cash flow

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Apple PE ratio

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of PSQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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