Apple (AAPL) currently sells for about 11 times trailing 12-month earnings, changing its investor base from growth to a value investors despite being a well-run, innovative technology company. Jonathan S. Vyorst, Senior Vice President at Paradigm Capital Management, currently holds the company in his investment portfolio.
“We believe in finding good companies, high-quality businesses that can grow and increase their intrinsic value over time. We also recognize that the market often overpays for investments, and that that has caused a lot of grief over the past 10 years. And so we are very conscious of the price that we pay for a security,” Vyorst said.
Vyorst does not expect AAPL‘s competitive innovation edge to decrease to the extent many investors do. He also says his investment strategy focuses on buying high-quality businesses selling at steep discounts, a strategy he says provides better upside return and hopefully better downside protection in volatile markets.
“I recognize that the growth rate that Apple had in the past is unlikely to continue into the future just because of the law of large numbers. However, I think people are underestimating the innovation that exists in the company. There’s a certain intellectual asset that the company has from having hired the best people in Silicon Valley and that R&D capability is a tremendous competitive advantage,” Vyorst said.
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