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.

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.