In this video, Fool tech/telecom analyst Andrew Tonner talks about whether Warren Buffett would ever buy Apple.
While Buffett can arguably be called the greatest investor of all time, he hasn't made his money by investing in technology companies. In fact, the only tech company that Buffett's Berkshire Hathaway owns is IBM. His IBM purchase fit Buffett's strategy of buying great companies he understands and holding on to them, Andrew says.
But now there's another great tech company selling at a low valuation: Apple. Does this company fit Buffett's style? Since its pullback, Apple is trading at around 10 times earnings, and 6.5 times enterprise value to EBITDA -- a classic value stock, Andrew says. And over the past year, Apple has made the return of money to shareholders a priority, both through a dividend and stock buybacks -- something Buffett also looks for.
And although it's a tech company, Apple's business model is relatively simple. The company makes great products that make consumers' lives easier.
Although it may not fit into Buffett's understanding, it should for more tech-savvy investors. So while Buffett isn't a buyer, Apple has many of the characteristics he looks for in a company, Andrew says.
Whether Buffett's a buyer or not, 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 more than 1,000% gains. However, after the company's major backslide recently, 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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