Applying the investment criteria to Apple

There is much said about Apple’s products and their competitors, but regardless of the speculation, our investment criteria are the key factors we consider before buying their shares.

“Always buying the business never buying the stock”

Warren Buffett



At AXIAM our criteria are as follows:

  1. 1. Companies that have Brands within the Top 100 Brands in the world.
  2. 2. Key Performance Indicators we can understand.
  3. 3. Free cash flow that allows us to determine the value of the company.
  4. 4. Low debt-to-equity.


Measuring Apple against those criteria is easy.


Top 100 Brands

Apple is one of the most sought-after brands in the world. It has been ranked in the top 3 most valued brands in the world since 2010 by the Global Top 100 BrandZ Report. Spending four of those eight years as the number 1 most valued brand.


Key Performance Indicators

“We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30 percent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.”

Apple CEO Tim Cook in February 2018


Free Cash Flow

Apple produced USD64 billion of Free Cash Flow for the year ending September 2018. They gave back USD85 billion to shareholders through Dividends and Share Repurchases. That is more than 10% of the current value of the company.


Low Debt to Equity Ratio

Apple’s debt-to-equity ratio at the end of September 2018 was at 1.07. Consider that banks have debt-to-equity ratios of 9. After returning all the above cash to shareholders, they still have USD235 billion available in liquid assets. They could settle all their debt.


At AXIAM, we have spent many years understanding the investment skills needed to successfully invest in value at a fair price. We do this by buying companies that pay regular, increasing dividends, because they own great brands that are known, loved and used around the world daily and are attractively priced relative to their free cash flow. Sign up for our newsletter or contact our fund management team to learn more about value investment skills and how to invest like the super investors.

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