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Introduction

Apple! iPhone, iPod, iPad, MacBook, chances are these items are very familiar, at least in name to anyone reading this report. Of course all of these are products of Apple, one of the largest companies in the world and a major player in the personal computer market. More than likely anyone reading this report either has an IOS based iPhone or Android based phone of many different flavors. Apple has always been a major player and innovator in the tech market and has been breaking records on the stock market ever since it’s Initial Public Offering (IPO) in 1980. The purpose of this report is to highlight the key financial benefits to owning stake in Apple and why any investor would benefit from being involved with Apple.

In the Beginning

Now one of the largest tech companies in the world, Apple had very humble beginnings. The three founders, Steve Jobs, Steve Wozinak and Ron Wayne started building personal computers in 1976 out of a garage. For the first two and a half decades Apple was mainly focused on building personal computers, then in 2001 they introduced the revolutionary iMac, not long after came the iPod, iPhone then iPad. In the last decade and a half Apple has been scooping up software and tech companies to expand its offerings to a much broader range of people and companies than ever before. The iPod radically changed the way people consumed music, the iPhone destroyed all myths of what a mobile phone could be and the iPad shattered all sense of what a laptop or mobile computing was thought capable of being. Apples users are among the most loyal consumers in the world, the author of this paper being one of them, yet most of Apples success can be attributed to its record breaking revenue and net profits. Revenue and net profits so large that Apple is currently ranked by Forbes as the #8 biggest public company in the world, leaving one of its biggest tech competitors (Samsung) far behind at #18, no other personal computer maker comes anywhere close. Apples “bitten” logo is recognized the world, continues to reign over the consumer electronics market (Campos & Gupta, 2011).

Ratios

Market and Profitability ratios are very strong and by far make up for weaker ratios like Liquidity and Debt Management ratios. Even the weaker ratios are much stronger overall than compared to the industry benchmarks, especially in the particular field of consumer electronics and personal computers. Stocks are very, very strong and have maintained this strength over many annual fiscal years. Apple’s stock has gone up tremendously since the advent of the iPhone and has seen sharp jumps during each major release of new tech, like the iPad for example. While it seems as Apples stock could not earn any more profit for end investors it can and will. Apple stock should be a key asset in any investors portfolio. Unlike the companies’ stocks its bonds are not as attractive to investors. (seekingalpha.com, 2015) While the pre-tax effective interest rate for Apple’s bonds is comparable to their shares, Apple’s shares by far have greater potential growth. Another key point is that Apple’s leadership is selling bonds in order to fund share repurchases, the sound investment choice is to follow the lead of upper management.

Conclusion

The consumer tech industry and personal computer industry will never go away at this point and in fact will only continue to grow and evolve. Given that Apple has been a leader in the tech industry and innovator in every way both in consumer electronics, gadgets and personal computers it is very likely that they will continue this trend. As mentioned before Apple’s users and consumers are fiercely loyal and more people convert to the Apple way every day. Apple will continue to be a thought leader and innovation powerhouse so the recommendation is to invest now and continue to invest significantly so prior to the release of any new Apple product.

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