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Udall: Apple's Cash Flow Undervaluation Is 'F'ing Absurd'

Udall: Apple's Cash Flow Undervaluation Is 'F'ing Absurd'

Apple Inc. (NASDAQ: AAPL)'s stock is undervalued based on its cash position, Sean Udall, a tech stock expert recently argued.

But just how undervalued is Apple's stock? According to Udall, it is "f'ing absurd."

Udall noted the only factor that really matters when evaluating a company from a balance sheet perspective is its net cash position. That is, total cash minus total debt.

Apple's net cash position is approximately $150 billion to $160 billion.

Udall continued that Apple's net cash would be "well north" of $250 billion when factoring in all the money the company spent on stock repurchases and other shareholder friendly initiatives. He added that at a $250 billion net cash position investors are buying the company at a valuation that is just above 2x net cash given Apple's market capitalization of around of $530 billion.

"It's f'ing absurd to say the least," Udall said. "The absurd only becomes more ludicrous if one adds back the cash flow generation."

This raises the natural question: if Apple's stock is so attractive at 2x net cash, why is the stock lower by nearly 12 percent over the past year.

According to Udall, the dip in Apple's stock is due to "machine driven raids," along with "fear and crashes." He added "this is what what happens when there are no humans in charge of trading anymore."

Posted-In: Apple Apple CashAnalyst Color Long Ideas News Movers Tech Trading Ideas Best of Benzinga


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