Money Manager Bobby Edgerton of Capital Investment Companies says Apple Inc. (AAPL) is a prime example of investing in a company with free cash flow. Looking for plenty of cash is an important part of Edgerton’s investment strategy.
“I concentrate on the world’s best companies with the world’s best balance sheets. I am a balance-sheet man first and foremost. Before I buy a stock, I will look at the balance sheet…Primarily cash, plenty of cash, as in a lot of liquidity, with little or no debt. I look at free cash flow. Apple would be the number-one example of great free cash flow,” Edgerton says.
Bobby Edgerton, Money Manager
Edgerton says Apple’s stock is the cheapest now, and the company has $206 billion in cash.
“There is probably no stock that I wouldn’t at least look at, but if somebody gave me $1 million to manage right now, the first thing I’d ask them is how much Apple you could stand in that portfolio and sleep at night,” Edgerton says. “They could easily have free cash flow of $85 billion to $90 billion this year. I am not talking about earnings; rather, I am talking about free cash flow.”
Edgerton likes investing in tech stocks because they’ve changed the world and have more money, and make more money, than anyone else.
“I love companies like Apple that are changing the world and making the world a better place for people. That’s what separates a great company from a good company. Good companies make money and run their businesses well, but great companies make things better for people like Apple has done.”
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