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Apple: An Undervalued Cash Cow

One of the simplest, most straightforward ways to quickly value a stock is by the free cash flow yield. Similar to the dividend yield, the higher this metric, the better. Turns out that Apple's (NASDAQ: AAPL  ) yield is considerably and almost irrationally high, especially compared to other stocks in its sector like Intel (NASDAQ: INTC  ) and Microsoft (NASDAQ: MSFT  ) -- two companies plagued by declining PC sales.

In the video below, Fool contributor Daniel Sparks discusses with's Erin Miller exactly why he thinks Apple's high free cash flow yield could mean that Apple is irrationally cheap.

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 over 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 both 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.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 07, 2013, at 2:20 PM, myeerah wrote:

    Yes! Apple is cheap.I am being greedy and buying shares.

  • Report this Comment On April 07, 2013, at 3:33 PM, garysund wrote:

    Apple stock was cheap even when it was above $700 a share. At the level it is right now it is a give-away. If you want to be a long term investor in apple then you have to have the faith that they know what they doing and go along for the ride. Not too many investors these days want to do that. But in few years forward when apple is a $2000 a share stock, investors who did not believe in apple will have their regrets.

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9/28/2016 11:26 AM
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